how do auto repos work?
How is the balance of the car loan paid off after the car has been auctioned off?
- 1 decade agoFavorite Answer
Usually what the car is auctioned for does not satisfy the loan.
because of interest and fees. The person who had the car loan will still be responsible for any balance.
- 1 decade ago
Let's say you owe $12k on a car, and it's auctioned off for $6k. They come after you for the $6k difference plus maybe $2k in attorneys and repossession fees. Since you broke the contract, this also is a black mark on your credit. So, as you can see, it's almost better to keep the car!
So what can you do? Definitely sell it and take a loss as opposed to having it repossessed. If all else fails, try to trade it in and take a loss, at least your payment might go down. If all else fails, try to talk to the company and have them move one of your payments to the end of the loan..that may give you some time.
- Anonymous1 decade ago
You pay the diff in what you owe minus what the car was sold for.