Here is a more detailed explanation of what happens when your car is repossessed:
1. The lender sends you a notice of default, which states that you are behind on your payments and that the lender intends to repossess your car.
2. If you do not make up the missed payments, the lender will repossess your car. This means that the lender will take your car without your permission and sell it at auction.
3. After the car is sold, the lender will calculate the deficiency balance. This is the amount of money that the lender still owes on the loan after the car is sold at auction.
4. The lender can then sue you for the deficiency balance. If you do not pay the deficiency balance, the lender can get a judgment against you. This means that the lender can take your property or garnish your wages to collect the money that you owe.
It is important to note that you can be charged for the deficiency balance even if you did not sign a personal guarantee for the loan. This is because the car itself is the security for the loan. If you default on the loan, the lender has the right to sell the car and collect the deficiency balance.
