In the earlier post we discussed about various ways you can avoid default on your car loan in difficult times. However if after giving your 100%, the bank do not agree to your proposal and decide to take possession of your vehicle, what should you do?
Well, honestly there is not much that can be done in this case except for clearing the dues. If that cannot be done, then sadly you will have to part with your vehicle. However there are certain procedures that the bank need to abide by in taking possession of the vehicle. You should be aware about this. These are listed below:
Notice : You as a borrower would be served a notice of one to two weeks to clear your d dues before the financing bank can move for repossession of the car. This notice is generally the last reminder for you to make the payment. Nonpayment during this notice period would give the banks the right to repossess the pledged vehicle.
Pre sale Notice – the banks are under obligation to issue a presale notice to the borrower after repossessing the vehicle intimating them to clear all the outstanding bills within a weeks time. The notice mentions in clear terms the amount to be paid in order to re-claim your possession of your car, the corresponding contact number of the person for making the payment and getting your vehicle released etc.
Release of vehicle in case of payment – If you are able to arrange finance and repay the entire due in accordance with agreed terms of settlement within the notified period, you can have your vehicle released and claim possession over it. The vehicle will be released back to you within a weeks time adfter the complete settlement of the dues.
Auction in case of nonpayment – If you are not able to settle the due amount during the notice period, the car repossessed by the bank would be sold by way of auction through dealers who are empanelled with the bank. This generally happens awithin 90 days of the date of repossession of the vehicle. There is an elaborate way through which a repossessed car is auctioned by the bank. It has to ensure that all the formalities are met before the car is finally sold of and the bank recovers its due.