If my car gets repossessed, does that end my obligation?

UPDATED: Sep 30, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Sep 30, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

If my car gets repossessed, does that end my obligation?

I bought a car from DriveTime

recently have had some hard

economical times and just

cannot afford the payment of

the car anymore are there for

one to give them a voluntary

repossession or would it be

better just to have them come

get it and do their own

repossession the car is in

excellent condition if not

better condition than when I

bought the car I have no plans

of destroying the car before

they get it back I just want to

be a gentleman about it and end

the loan contract am able to

do that at the present time I

believe is repossession

Asked on April 6, 2016 under Bankruptcy Law, Tennessee


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

It does not legally end your obligation, no. You are obligated for the full principal balance of the loan. When a car is repossessed, then auctioned/sold off, the proceeds of the sale (less certain costs of repossession and sale) is applied against that balance, but if it does not fully pay off the balance, you will still owe what's left. Example: say you still owed $16,000; the current blue book or fair market value is only $13,000, due to depreciation (i.e. the value of a car of that year, make, model, options, condition, and mileage); say that the costs of repossession and sale are $1,000...in this example roughly $12,000 would be applied against the balance of the loan, leaving you owing another $4,000, which the lender/dealership/etc. (whoever provided the financing) could sue you for.
Now, a lender may voluntarily agree to take the car back in full satisfaction of the loan; or even if they don't formally agree, may decide it's not worth their while to sue you for whatever is left over/unpaid--but that's their choice. Legally, they could proceed against you for any amount not paid off or satisfied by the reposseesion.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption