- Delinquent payments: Missing scheduled loan payments can lead to the lender taking action to repossess the car. Different lenders may have different policies and grace periods for late payments.
- Default on loan terms: If the borrower violates any other terms of the loan agreement, such as failing to maintain insurance or allowing the car to deteriorate, the lender can move to repossess the vehicle.
- Breach of contract: Any significant violation of the loan contract, such as selling the car without the lender's permission or using it for illegal activities, can also result in repossession.
- Voluntary surrender: In some cases, the borrower may voluntarily surrender the car to the lender rather than face the consequences of repossession.
Before repossession, lenders are typically required to provide notice to the borrower, giving them a chance to bring the loan current or otherwise resolve the default. The specific procedures and laws governing car repossessions can vary depending on the jurisdiction and the terms of the loan agreement.
