What Does Repossessing a Car Mean?

Repossession happens when your lender or leasing company takes your car away because you've missed payments on your loan—and it can occur without warning if you've defaulted on your auto loan.

What does repossessing a car do to your credit?

A repossession can stay on your credit report for up to seven years, making it harder for you to qualify for other loans. Repossessions have a severely negative impact on your credit and can show lenders that you may not be able to make payments on the property you purchase.

What does it mean when a car is repossessed?

Repossession is when an auto lender takes possession of your vehicle, sometimes without warning you in advance or having permission from the court. Vehicle repossession laws vary by state; your vehicle purchase contract should include details about how and when your auto lender can repossess your vehicle.