Car loans are secured loans. Secured means that the bank maintains the asset ownership and can take it back if you don’t finish paying for it. Hence, repossession; if you haven’t finished paying for the car, you still don’t own it, and they can still take it back. Typically, lenders won’t start repossession proceedings until your payments are at least 60 days late. When a bank repossesses a vehicle, they generally will try to sell it and apply the funds to pay the remaining balance of the loan.