Short Answer — Navy Federal Credit Union generally gives auto loan customers 60 to 90 days before starting the repossession process. However, since most Navy Federal members are also military personnel, there are some repossession protections for those on active duty under the Servicemembers Civil Relief Act.
Navy Federal Credit Union Repossession Policy
Navy Federal Credit Union (NFCU) handles repossessions on a case-by-case basis, but it may repossess your vehicle once you become about 60 to 90 days overdue on a payment.
Representatives for NFCU told us that the company’s repossession process — including the type of contact and notice it provides, its voluntary repossession options, its policies for repossession on private property, and how to get your car back — will follow each state’s individual laws.
Our previous research explains more about how repossession works.
In addition to following state laws, NFCU has some of its own specific repossession policies. Since its members are active-duty or retired military, veterans, or immediate military family members, it must also follow federal regulations for repossessing property from military members. We detail these policies below.
Specific NFCU Policies
NFCU upholds several policies regarding late payments and repossessions:
- NFCU will report any loan payments that are 30 days past due to the three major credit bureaus (Equifax, Experian, and TransUnion).
- NFCU does not have a grace period; a payment is considered late on the day following the due date.
- Once your payment due date is set, you cannot change it.
The Servicemembers Civil Relief Act and Repossession
Navy Federal members on active duty are covered under the Servicemembers Civil Relief Act (SCRA). The SCRA protects active servicemembers in the event of an auto repossession.
Lenders that repossess automobiles from active military members face possible legal repercussions if they fail to follow the SCRA repossession rules.
For active military members, the SCRA offers additional protections against repossession by requiring lenders to abide by precise criteria. It requires lenders to get a court order before repossession as long as the servicemember placed a deposit or made at least one payment on the vehicle before entering active service.
If the vehicle deposit or single loan payment happened after entering active duty, or if the borrower signs an SCRA waiver during active duty, a court order is not required.
If NFCU proceeds with the court order, the court may delay the filing until the borrower/defendant can appear in court. This is known as a stay of proceedings and usually lasts at least 90 days. The judge can also alter loan payments or reduce the loan.
In cases where the judge will allow the repossession, the lender may be required to return some or all of the loan payments to the borrower or pay an equity payment, which is the amount difference between the car value and loan balance.
The Department of Justice (DOJ) will pursue lenders in violation of the SCRA. If you believe a creditor has violated your rights, you can contact the legal assistance service department for your military branch. They will then have the DOJ investigate your case.
Navy Federal Members Not Covered By SCRA
As noted above, servicemembers who purchase or lease a vehicle while on active duty are not covered by the SCRA, nor are those who sign the SCRA waiver during active duty.
For those NFCU members not covered by the SCRA, the repossession process may begin about 60 to 90 days after your first missed payment, but this time frame can vary by state and individual situation.
We were told that in general, the more transparent you are about payment issues, the greater chance that NFCU will be willing to work with you instead of repossessing your car, especially if there are no additional credit issues or bankruptcy.
Another consideration when dealing with NFCU is cross-collateralization. NFCU offers credit cards in addition to auto loans, and in the fine print of your contract, you may find that your car is used as collateral for the NFCU credit card.
What this means is that, for example, if you are behind on your NFCU credit card payments, the lender may repossess your car even if you are not late on auto loan payments.
Or, if you pay off your car but also have an NFCU credit card and are behind on payments, NFCU may refuse to issue the car title to you until you resolve the credit card payment matter.
If your NFCU loan or credit card has cross-collateralization, it is important to keep payments up-to-date on all of your accounts.
What to Do After Repossession
If NFCU does repossess your car, our related research explains your rights after repossession, including how to reclaim your property.