Lenders that provide car loans know that those borrowers may eventually default on their loans. The vehicle acts as collateral. Since it still has a specific financial value, a lender can repossess the car over nonpayment. This vehicle could then be sold to another party to help mitigate the impact of the failed repayments. Lenders can still get their money out of the arrangement, as long as they have collateral.
How fast does that happen in Florida? If someone misses a single car payment, can the lender repossess the vehicle?
Cars take just one missed payment
The short answer is yes, a car can be repossessed after just one missed payment. Missing the first one puts the borrower into default. The lender could take the car immediately and begin the process of transferring ownership to another party.
This is important to note because it is much different than some other types of debt. For instance, maybe the borrower also provides mortgage loans. A foreclosure could be used to repossess a home if the borrower does not pay every month.
However, with foreclosure cases, the borrower has to be at least 120 days behind on their payments. This means that they would likely miss four payments before the foreclosure started. After that, a foreclosure can still take months to complete, before the person actually has to leave the property.
Timelines for the legal process
Lenders may need to take legal action over nonpayment issues, and they do have the right to do so. This helps to show why they need to understand the important timelines in the legal process.