Having your car repossessed can be stressful and financially devastating. Your instinct may be to do whatever it takes to get the vehicle back as quickly as possible. But how much will it actually cost you to reclaim a repossessed car? Depending on various repayment fees and penalties, expect to pay $500-$5000+ to get a repossessed vehicle out of impound and current on payments again.
Repossession Fees
Once your car is repossessed, the finance company adds on a variety of fees you must pay:
- Towing fee – $100-$250 to the repossession agency for towing your vehicle to the impound lot.
- Impound fee – Storage fees of around $30-$100 per day the car sits in the impound lot before you reclaim it.
- Repossession fee – A one-time fee of $200-$400 charged by the lender to cover the cost of coordinating the repo.
- Late fees – Any late payment fees specified in your loan contract, often $30-$50 for each missed payment.
- Penalty interest – Additional interest, usually at a very high rate, applied for paying late.
These fees can quickly add up the longer the car is left unclaimed in the impound lot. Act fast to minimize what you owe.
Getting Your Car Out of Repo
In order to get the repossessed vehicle back from the impound lot, you will need to:
- Pay off the full repo fee balance – This includes all outstanding payments, late fees, interest, penalties and repossession costs.
- Show proof of valid auto insurance – Lenders require current insurance to release the vehicle back to you.
- Provide updated personal documentation – Current driver’s license, proof of address, payroll info, etc.
- Sign a new loan agreement – You may need to agree to new loan terms with higher payments or interest rate.
- Pay reinstatement fee – An additional fee of $100-$500 to process and release the vehicle back to you.
- Pay in certified funds – Repossession balances must be paid via certified check, money order or cash.
Expect this to be a lengthy process taking several hours at minimum before you can pick up your car.
Alternatives to Reclaiming from Repo
Before paying the high fees to get a car out of repo, also consider:
- Voluntarily surrendering the vehicle – You can hand over ownership to satisfy the loan balance instead of paying impound fees. This is reported differently than a repo on your credit.
- Reinstating the loan terms – For first time offenses, some lenders may allow you to resume your original payments if you immediately pay the amount past due.
- Refinancing the loan – Take out a new loan with better terms through a lender willing to work with your financial situation. Use this loan to pay your balance in full.
- Paying settlement amount – Offer the lender a lump sum payment that is less than the full balance. They may accept this as marked as “settled for less”.
Impact on Your Finances
Expect getting your car out of repo to impact your budget:
- Have at least $1000 – $2000 available in the days after the repo to get your car back quickly.
- Budget for higher loan payments, deposits, or interest rates when reclaiming the vehicle.
- Factor in alternate transportation costs like rental cars if you are without the vehicle for a period of time.
- Account for increased auto insurance premiums for your policy due to the lapse in coverage during repo.
With some signification financial sacrifices, you may be able to get your car out of repo. Weigh the costs carefully against other options that could be better for your long-term financial health.