Can the car dealership where I got my car from repossess my car, if the finance company is retracting my loan?

Today I received a phone call from the dealership saying that my finance company is retracting the loan and that I needed to come ASAP so they could find me new financing. I then called my financing company to find out exactly what was going on. They told me they did not retract my loan, however the car was up for repossession which of course I already knew. They also said I could still continue to make payments to them. I also specifically asked them if my balance is brought up to date, can I continue with them and they told me yes. So I’m confused, was this just a tactic to try and repo the car and get it back. They said I could be arrested?

Asked on July 19, 2014 under Business Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, you can't be arrested for not paying a loan, unless it can be shown that you had criminal intent (e.g. you borrowed money without *ever* intending to pay the loan or otherwise under false pretenses).

If the dealership is not being paid for any reason (loan retracted; lender sending the money to the wrong address or labeled with the wrong name or account; etc.), then the car can be repossed--when the car is not paid for, they can take it back. On the other hand, if they are getting the money, they should not be able to repossess, since they are getting what they are entitled to. You may wish to ask the lender to send you some proof/documentation of payment which you can show to the dealership and try to work out what the problem is.


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