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?
Answer provided by
Answered on Apr 07, 2021
“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. “
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
"My pre-approved new car loan expires in a week. If I decline to take the loan, will this affect my credit score? "
I initially thought I needed the loan, but my grandma has offered to loan me some money instead, and with her I don't have to pay interest! This is why I want to decline the bank's loan.
Apr 05, 2021
If I've paid off my car loan, should I tell my auto insurance company?
I finally paid off the loan on my Toyota last month. Does my insurer need to know about this?
Apr 12, 2021
Can my price change after purchasing an insurance policy online?
I was previously with a carrier through a broker. I had a lapse and decided to request a quote with the same company directly. When I put in my previous policy details online, it gave me a discount. However, when I called to follow up, the agent told me I did not qualify. Will my price change if I purchase it online instead?
Apr 20, 2021