If you do not make your car payments at some point, you are right, the lender will come and repossess your car. In most cases, a repossessed car is auctioned off and after the car is sold the amount the car is purchased for is applied to the balance of your car loan.
Are you responsible for the difference? Yes, the bank or lender wants their money back that they loaned to you to make the car purchase.
What options do you have?
1. Take out a loan for the amount you owe. This can be done through either a personal loan or a home equity loan. This will allow you to pay the car lender in one payment and make installment payments for the personal loan.
2. Avoid repossession. There are some programs available for qualifying buyers which may allow them to either refinance their loan or turn the car back in to the manufacturer.
3. File bankruptcy. If you cannot get the loan refinanced or you do not qualify for a personal loan, you may consider filing bankruptcy. Talk to a bankruptcy lawyer before your consider this option.