So if your vehicle gets repossessed due to non-payment, why do you still have to pay the full balance off if you don't own it anymore and someone else has it who bought it at a car auction? I never understood this.

It is the debt, what normally happens it is not the actual full amount but.

Lets say that you owe 10,000 on the car, they have to repo it, and pay the repo company about 2000 dollars to repo, and legal fee for about 3000 for the repo. Then the car is sold at a auction. So there is a auction fee to pay about 1000. So now there is about 16,000 you owe before the car is sold. The car may be sold for lets say 5000. Most auction cars sell for about 20 to 50 cents on the dollar of value.

Now you owe 11,000, which is 1000 more than you owed to start with.