Junk car buyers will not buy a car that has been repossessed because you no longer own the vehicle. Once a lender repossesses a car, ownership transfers to the lienholder, and you have no legal right to sell it.
How repossession affects selling:
When you finance a vehicle, the lender holds a lien until the loan is paid in full. If you default on payments, the lender can repossess the car to recover their loss. After repossession, the lender owns the vehicle and will sell it at auction or through a dealer to recoup the loan balance.
If your car has been repossessed, you cannot sell it to a junkyard, scrap yard, or private buyer. Attempting to sell a repossessed vehicle is illegal and constitutes fraud.
Options if you are facing repossession but still have the car:
- Contact your lender: Ask about selling the car yourself. Some lenders allow this if the sale covers the loan balance or you pay the difference.
- Request a payoff amount: Get the exact amount needed to clear the lien, then sell the vehicle for at least that amount.
- Negotiate a settlement: If the car is worth less than you owe, some lenders accept a short sale where they forgive part of the debt.
Selling before repossession lets you control the sale and potentially get more money than the lender would at auction. Check junk car prices to see if your vehicle’s value can cover your loan balance.