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Can title loans take your car?
One of my coworkers has been having a rough time. He said he lost his car last month. Eventually, he admitted he took out a title loan and was making partial payments, but they took his vehicle anyway. Can title loans take your car?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Title loan lenders can take your car. This is because the borrower’s
car title
is used as collateral to secure the loan.If the borrower fails to make their loan payments in full, the lender can repossess the vehicle. The associated laws depend on the state you live in. Some states have enacted laws to protect consumers; in others, borrowers aren’t so lucky.
In states without restrictions, a lender can install a GPS on the vehicle when the loan is originated to make repossession easier if they don’t receive payment on time. Other states require lenders to give a heads up before repossession. This provides a chance for the borrower to retrieve personal items from the vehicle or find a way to make good on payments before the lender sells the car.
You should tell your coworker to check with your state’s attorney general and state consumer protection office to verify that the lender didn’t act illegally. He can also file a complaint with the Federal Trade Commission.
One reason people turn to title loans is because of financial strain. However, it can help to make sure you’re saving where you can. This includes your car insurance. You can ensure that you’re getting the best deal with the
Jerry
app. Jerry will help you compare 50+ top insurance companies and help you change providers if you find a better deal. On average, our users save $879 a year.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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