Having a car repossessed is a fear many struggling drivers have. Not only does it hurt people’s day-to-day lives, but it can have future financial consequences. Sadly, the rate of car repossessions is up as monthly car notes continue to rise for many of the best new cars. Because of this, many drivers are wondering how to save a car that’s at risk of being taken back by the lien holder. Of course, these steps include voluntary repossession.

Having a car repossessed is becoming more common

According to CarScoops, the phenomenon of having a car repossessed has become much more common for owners. Sadly, this rate has climbed to 23 percent, which marks a return to prepandemic levels of people having their cars taken away due to non-payment. Readers should note that the number of people experiencing car repossession fell in 2021 and 2022. Experts think that about 1.6 million vehicles will be taken back by the lien holder by the end of the year. 

People have always had their cars repossessed due to high monthly payments. However, the amount car owners now pay has reached unbelievable levels. The high prices are both due to higher costs for the best new cars and increased interest rates. Currently, the average payment for some of the best new cars is well over $700. 

Of course, car prices are growing as everything has become more expensive. Car owners must find ways to afford increasing car insurance prices, more expensive groceries, and higher rent and mortgage amounts. Naturally, this also means more drivers are keeping their vehicles for longer. 

Avoid having a car repossessed by refinancing

One way some drivers avoid having their car repossessed is by refinancing their loan. Of course, this means that the owner must be proactive in starting the refinancing process. Refinancing a loan means that a new lender pays off the debt with the old lender and starts a new contract with the car owner. Many drivers see this as a way to start fresh with a new loan for the vehicle. 

Of course, there are downsides to refinancing a car. First, if the process isn’t complete before the lien holder decides to repossess the car, you could still lose it, which is why being proactive is essential. Additionally, once the process is complete, there is a high chance of being upside down in the car loan. 

Consider bankruptcy

Many people at risk of having a car repossessed consider bankruptcy. This is because the bankruptcy court will issue a stay after filing, which means creditors have to stop their collection activities. Still, owners should know that creditors can ask the courts to lift the stay. Additionally, bankruptcy can have several consequences, including losing the vehicle if it’s worth more than a certain amount. 

Talk to your creditor

It’s also possible to avoid having your car repossessed by talking to your creditor. This is especially the case if you have yet to make special arrangements. In some cases, the lien holder may have options that will give owners more time to pay. For example, some car loan companies will offer to extend missed payments to the end of the loan, which means they are no longer past due. 

However, this will cause owners to pay more in interest. If there is truly nothing that can be done, others look into voluntary repossession. It has the same impact on your credit score as a regular car repossession, but it’s better than the stress of waiting for the repo person and their truck to take your vehicle. Voluntary repossession is also far less embarrassing.