Are you responsible for payments after voluntary repossession if the car has already been sold by dealer?

In cases involving voluntary repossession, whether you remain responsible for payments after the surrendering of a vehicle depends on the laws and contract stipulations in your jurisdiction. In some cases, you might be responsible for any remaining balance on the loan after the dealer sells the car, while in other instances, the dealer might be responsible for any deficiency - the amount by which the sale price falls short of the loan balance.

Here's a general outline of what typically happens in cases of voluntary repossession:

1. Voluntary Surrender: You voluntarily hand over the vehicle to the lender or dealer due to financial difficulties, inability to make payments, or other reasons.

2. Repossession Sale: The lender or dealer takes possession of the vehicle, typically through a private or public sale, to recover the outstanding loan amount.

3. Settlement Options: After the sale of the vehicle, there are a couple of potential outcomes regarding your responsibility for payments:

- Deficiency Balance Liability: In some states, if the sale price doesn't cover the total amount owed, you might be held responsible for the deficiency balance, which is the remaining difference between the outstanding loan and the sale proceeds.

- No Deficiency Liability: In other states, you may not be liable for the deficiency balance, and the lender or dealer bears the loss.

4. Contract Terms: The terms of your loan agreement can also influence your payment responsibilities after voluntary repossession. Review the contract carefully to determine whether you're liable for any outstanding balance, including any applicable fees, charges, or interest.

5. State or Local Laws: The specific laws governing voluntary repossession and related payment responsibilities vary by state or locality. It's essential to consult local laws, state regulations, or seek advice from legal professionals familiar with your jurisdiction's consumer protection regulations to fully understand your situation and rights.

Before making any decisions or taking action regarding voluntary repossession, consider consulting a knowledgeable attorney or legal aid service to ensure you're aware of your rights and obligations under the applicable laws and regulations in your area.