In many states, once you miss a payment on an auto loan, your creditor can repossess the vehicle at any time. Your loan agreement will state what constitutes default, but in general, you are risking repossession once your payment is more than 30 days past due, which is a chance you don’t want to take, not only for the sake of your ability to get around but also for your credit standing.

States With High Repossession Rates

Whatever the reason, borrowers in some states have a particularly difficult time staying current on car payments. About 1 of every 172 outstanding auto loans in the U.S. resulted in a repossession in the first quarter of this year, according to data from Experian Automotive, but in some states, the repo man is a much more common sight. Here are the 10 states — actually nine states and the nation’s capital — that had the highest repossession rates in the first quarter, according to Experian’s numbers.

10. Virginia
about 1 repossession per 110 auto loans (0.91%)
Repossessions are up 51.9% from the first quarter of 2013

9. District of Columbia
1 in 108 (0.93%), up 0.10%

8. Georgia
1 in 91 (1.1%), up 70.9%

7. Oklahoma
1 in 90 (1.11%), up 87.1%

6. Texas
1 in 88 (1.13%), up 66.3%

5. Florida
1 in 86 (1.16%), up 48.1%

4. North Carolina
1 in 78 (1.27%), up 101.4%

3. New Mexico
1 in 68 (1.46%), up 135.2%

2. Arizona
1 in 66 (1.52%), up 46.3%

1. Nevada
1 in 64 (1.56%), up 101.9%

How a Repossession Affects Your Credit

A repossession will remain on your credit report for seven years after you first went delinquent, limiting your ability to get future financing, including auto loans. When you’re considering buying a car, make sure you’ve determined an affordable monthly payment and you stick to your budget when browsing dealers’ lots.

As life goes, you can’t plan for everything, like a sudden loss in employment or drop in income that may jeopardize your ability to repay the loan. In a situation like that, you’ll have to do your best to meet your financial obligations, but you may have to weigh the potential consequences of letting some bills go unpaid. Whenever you take out credit, whether it be for a car, home, education or miscellaneous expenses, you need to know what will happen if you fail to pay.

Simply put, bad things happen when you default on a loan. You can lose your house or car, a debt collector may contact you, or you could have your wages garnished. Determining your monthly payments in advance of committing to the loan will help you avoid default. If you do go through a tough spot with repayment, do your best to maintain as many good credit practices as possible, in order to minimize the damage to your credit standing. You can see how your auto loan or any other form of credit you have impacts your credit score by checking your free credit data on Credit.com.

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