What's the difference between a charge-off and repossession for car loans?

I know both involve trouble making car payments, but how do they differ?

“When a car gets repossessed as the result of payment delinquency, the lender will sell the vehicle and put that money toward the balance of the loan.
A charge-off means that the lender has determined your debt to be uncollectible, but you’re still in ownership of the vehicle. As a result, you can sell the vehicle if it helps you gain the funds you need to pay off a portion or the entirety of the loan. “
Eric Schad
Answered on Apr 07, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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