If you fail to make your car loan payment, your car lender can repossess your car. This means it can come to your home or work and take your car without asking. Usually it then sells the car and uses the sale proceeds to repay its repossession costs and the remaining loan balance. Unfortunately, in many cases, the sale price isn't enough to cover your loan balance and the repo costs. The remaining amount is called the deficiency and the car lender can sue to recover this from you.
If you are struggling to make your car payment, are facing a repossession, or your car has just been repossessed, there are things you can do to minimize your financial damage. Make sure you understand how repossessions occur, what you can do to prevent one, and how to deal with a deficiency lawsuit.