Auto loans represent the third-largest consumer credit category in the U.S.
If you do not make your auto loan on time, your lender has the right to repossess your SUV. However, illegal repos are increasing today. Does this issue affect you?
About vehicle repossessions
In order to obtain an auto loan, a borrower may have to give a creditor a security interest in the vehicle. If the borrower fails to make payments on time, the creditor can repossess the car or truck and sell it. The Consumer Financial Protection Bureau (CFPB) recognizes that the hot auto market that exists today fuels Illegal vehicle repossession activity. There is a heavy demand for pre-owned cars and trucks, creating an opportunity for creditors to seize vehicles that can be resold for higher prices.
In addition to emotional turmoil, if you experience the repossession of your SUV, you might miss work, have to pay for alternative transportation and face a negative credit report. The repossession may be illegal if you made a payment to stop this action or entered an agreed-upon payment plan with the lender.
The CFPB is keeping a close watch on the auto lending industry. In some repossession cases, records were not properly coded. In other instances, vehicles were taken because orders canceling repossession carelessly went astray harming consumers, which violates federal law. Your SUV could also suffer repossession simply because of the way a servicer processes your loan payment. Remember that you have options. With legal guidance, you can find a solution to the matter before the sale of your vehicle takes place.