What happens if your car gets repossessed — and how to avoid it

Car ownership remains a struggle for many Americans. In the first quarter of 2026, the average monthly loan payment on a new car sped past $800 for the first time, according to data from JD Power , and nearly one in five borrowers is shelling out more than $1,000 a month. It's a symptom of how ongoing inflation is stretching budgets to their limits, said debt relief attorney Leslie Tayne , founder of the Tayne Law Group and author of "Life & Debt: A Fresh Approach to Achieving Financial Wellness." "When a consumer is trying to make a decision about what to pay, very often, they'll choose something they need right now — electricity, food, gas," Tayne told CNBC Select . "If cash is tight, something like a car payment might be put on the back burner." In February, 60-day delinquency rates on subprime auto loans reached 6.8%, according to Fitch Ratings ABS Index , just slightly down from the record 6.9% seen in January. Unsurprisingly, repossession rates are also surging. According to auto industry research firm Cox Automotive , between 2022 and 2024, v ehicle repossessions increased nearly 43% to reach 1.73 million, the highest level since the Great Recession. Year-end totals for 2025 are projected to exceed 3 million , auto recovery news site CURepossession reported. How car repossession works An auto loan is considered in default after anywhere from 30 to 90 days of non-payment, depending on the lender, the state and the terms of the loan contract. …