What happens if you stop making car payments?
Once a car is repossessed, it is usually sold through an auction.
It is common for cars to sell at auctions for a fraction of their resale value.
If your car sells for less than your loan balance, you will owe the lender the difference, called the “deficiency balance”.
Can you go to jail for not paying your auto loan?
While it is true that even if the car was repossessed, stolen, or otherwise destroyed that you still owe the balance of the loan, it is not true that a collection agency has the authority to put you in jail. If you can’t pay off the balance of the debt, then it’s time to consider a debt consolidation loan.
Can my car be repossessed if I have paid more than half?
If you have paid more than one-third of the hire purchase price, a lender cannot repossess the car without taking legal action against you. The car cannot be repossessed from your home, regardless of how much money you have paid back.
Photo in the article by “Flickr”