Your lender will contact you, usually within 30 days, and you'll owe a late fee
When you miss a car payment, your lender doesn't immediately repossess the car or report you to credit bureaus. Instead, they send you a notice—by mail, phone, email, or all three—asking you to pay what you owe plus a late fee. That fee is typically $25 to $75, depending on your loan agreement. You have a grace period, usually 10 to 15 days after the due date, before the payment officially counts as late.
If you pay during this window, you avoid the late fee and the credit damage. If you don't, the lender reports the missed payment to the three credit bureaus (Equifax, Experian, TransUnion), and it stays on your credit report for seven years. A single 30-day late payment can drop your credit score by 100 points or more, depending on your starting score and credit history.
The lender will keep trying to reach you. Most send multiple notices and make repeated phone calls. Some offer a one-time courtesy extension or a modified payment plan if you contact them first. The key is that you have options during this phase—but only if you act.
Key Takeaways
- A late fee ($25 to $75) is added to your next payment if you miss the due date, and the missed payment is reported to credit bureaus after 30 days.
- Repossession typically doesn't happen until you are 90 to 120 days behind, though some lenders move faster; check your loan agreement for the exact trigger.
- Calling your lender before you miss a payment is your strongest move—many offer payment deferrals, loan modifications, or temporary forbearance.
- If your car is repossessed, you still owe the remaining loan balance after the lender sells it, plus repossession and storage fees.
- Bankruptcy can stop repossession temporarily, but it damages your credit for 7 to 10 years and should only be considered with legal advice.
What happens at 60 and 90 days behind
If you miss a second payment or don't catch up after 30 days, your account moves to 60 days past due. The lender sends another notice, often more urgent, and may increase the pressure through phone calls. Your credit score drops further. Some lenders begin preparing for repossession at this stage, though most wait until you hit 90 days behind.
At 90 days past due, your lender has the legal right to repossess the car without warning. They don't need a court order in most states. A repossession company can show up at your home, workplace, or anywhere the car is parked and tow it away. You'll receive a notice afterward, usually within a few days, telling you where the car is being held and how much you owe to get it back (typically the full loan balance plus repossession fees, which range from $300 to $1,000).
Some lenders are more aggressive and repossess at 60 days; others wait longer. Your loan agreement specifies when they can act. If you're approaching 60 days behind, call the lender immediately—this is the window where they're most willing to work with you before repossession becomes their next step.
Calling your lender before you miss a payment
This is the single most important action you can take. If you know you can't make the next payment, contact your lender before the due date. Explain your situation honestly: job loss, medical emergency, reduced hours, unexpected expense. Lenders have hardship programs specifically for this.
Common options include a payment deferral, where one or more payments are postponed and added to the end of the loan; a loan modification, where the terms are rewritten to lower the monthly payment; or forbearance, a temporary pause on payments (usually 3 to 6 months) while you stabilize. Some lenders will skip one payment if you're current on the rest of your account.
The lender has no obligation to offer these, but most do because repossession is expensive for them too. They'd rather keep you in the car and getting paid. Be specific about what you need: "I need to skip March's payment" is clearer than "I'm having trouble." Have your account number ready and be prepared to discuss your income and expenses.
Get any agreement in writing. If the lender says they'll defer a payment, ask them to email or mail you confirmation. Without documentation, you have no proof if the lender later claims you never asked or they never agreed.
What repossession actually costs you
Repossession doesn't end your debt. After the lender takes the car, they sell it at auction—usually for less than what you owe. You're responsible for the difference, called a deficiency. If you owe $15,000 and the car sells for $9,000, you still owe $6,000 plus repossession fees ($300 to $1,000), storage fees ($25 to $50 per day), and auction costs.
The lender can sue you for the deficiency in small claims or civil court. If they win, they can garnish your wages, seize your bank account, or place a lien on other property. Some states have deficiency laws that limit what lenders can collect, but most don't. Check your state's laws or speak with a local attorney if your car has been repossessed.
The repossession itself stays on your credit report for seven years and makes it much harder to borrow money in the future. Auto loans, mortgages, and credit cards all become more expensive or unavailable. The damage is severe and lasting.
Refinancing or selling the car as an alternative
If you're behind but not yet at 90 days, you may be able to refinance the loan with a different lender. This works only if you have some equity in the car (the car is worth more than you owe) or if a co-signer is willing to take on the new loan. Refinancing extends the loan term, which lowers the monthly payment. It doesn't erase what you owe, but it makes the payment manageable.
Alternatively, you can sell the car privately and use the proceeds to pay off the loan. If the car is worth more than the loan balance, you pocket the difference. If it's worth less, you still owe the shortfall, but at least you've stopped the bleeding—no more monthly payments, no repossession, no deficiency judgment. You'll need the lender's permission to sell, and they'll require the sale proceeds go directly to them.
Both options require acting quickly, before repossession happens. Once the car is repossessed, you've lost the ability to sell it yourself and control the outcome.
How bankruptcy affects a car loan
Filing for bankruptcy triggers an automatic stay, a court order that stops most collection activities, including repossession, for at least 30 days. If you're facing repossession in the next few weeks, bankruptcy can buy you time. However, it's a last resort with severe, long-term consequences.
Chapter 7 bankruptcy can eliminate unsecured debt (credit cards, medical bills) but not a car loan—you still owe the car. Chapter 13 bankruptcy creates a repayment plan over 3 to 5 years that can include catching up on missed car payments. Both types stay on your credit report for 7 to 10 years and make borrowing expensive or impossible for years.
Bankruptcy should only be considered with advice from a bankruptcy attorney. Many offer free consultations. If you're thinking about it, talk to a lawyer before you miss another payment—timing matters, and an attorney can explain whether it actually solves your problem or just delays it.
Frequently Asked Questions
Can the lender repossess my car if I'm only one payment behind?
No. Most loan agreements require you to be 90 to 120 days behind before repossession is legal. Some lenders move faster—check your contract for the exact trigger. But even if the contract allows it at 60 days, most lenders wait longer because repossession is expensive. Call before you hit 60 days behind to avoid finding out.
What if I can't afford the payment even after a deferral?
Tell the lender immediately. Ask about a loan modification that lowers the monthly payment by extending the loan term, or explore selling the car and paying off the loan with the proceeds. If neither works, a bankruptcy attorney can review whether Chapter 13 (a repayment plan) might help, though this should be a last resort.
Do I still owe money after the car is repossessed and sold?
Yes. You owe the deficiency—the difference between what you owed and what the car sold for—plus repossession, storage, and auction fees. The lender can sue you for this amount. Some states limit deficiency claims, so check your state's law or consult an attorney.
Will missing one payment destroy my credit?
A single 30-day late payment damages your credit score significantly (often 100+ points) and stays on your report for seven years, but it's recoverable. If you catch up and stay current for 12 to 24 months, your score will gradually improve. Multiple missed payments or repossession cause much deeper damage.
Can I get my car back after repossession?
Yes, but only by paying the full loan balance plus repossession and storage fees within a set window (usually 10 to 30 days, depending on your state). After that, the lender sells the car and you owe the deficiency. This is expensive and rarely worth it—focus on preventing repossession in the first place by calling your lender early.