The best way to deal with repossession is to avoid it altogether if you can. Your options are much better when you remain in control of your finances.
Your options for avoiding repossession will depend on a number of factors. They include your credit rating, your savings, your income and the amount of equity or negative equity in your car. You also may be subject to the policies and whims of the lender.
Refinance the Loan
Loan market fluctuations can impact your refinance choices. Tighter credit means fewer lenders are willing to lend money. They also may charge higher interest rates if they are less tolerant of the risk that you might default on the loan.
When your income is stable, you can generally refinance the loan with another lender as long as you are not upside down on the loan. If you do have negative equity, you may have to come up with a down payment to reduce this gap. Of course, if you had extra cash, you probably would not be trying to refinance the loan in the first place!
Negotiate with the Lender
Perhaps you can negotiate an alternative to repossession. The lender might allow for a special repayment plan to help you catch up on back payments over an extended period of time. They may even agree to modify the loan by extending the term so that you can make a lower monthly payment.
Get Outside Help
If you are struggling with many bills, then you might seek help from a trusted organization that deals with financial troubles. A financial counseling organization may be able to consolidate your high interest unsecured debt payments so that you can open up some room in your budget. That might give you enough breathing room to afford your car payments.
If you are falling behind on everything and unable to hang on, then you might need protection from creditors. Sometimes your bigger financial troubles may dictate that an attorney work to resolve your situation while helping you retain your major assets.
If you fail to act and are unable to avoid repossession of your car, then you may have few options remaining. It may be nearly impossible to get your car back at this point. You may also have the added stress of future legal action as well as transportation challenges.