Do they have to tell me before they take my car?

Usually no. Unlike some other states, California does not require the finance company to notify you before they repossess your vehicle. There are some exceptions to this rule. For example, under some circumstances, co-signers must be given a written notice of delinquency prior to the repossession. However, most of the time, if you are behind on your contract (or otherwise in default), they can repossess your vehicle without telling you first.

Can they repossess my car?

A financial institution can only repossess your vehicle if there is a “default” and that the financial institution has a good faith belief that the prospect of payment or performance is impaired. Usually, vehicles get repossessed for a failure to make payments or failure to maintain automobile insurance on the vehicle. However, check the back of your contract for all of the ways that you can be considered in “default.” You may be surprised what you can and cannot do.

I was only a few days behind on my payment and they repossessed my car, is that legal?

Unfortunately, in California, there is no automatic grace period that you get before they can repossess your car. However, this does not necessarily mean that a financial institution can or will repossess your vehicle if you are only a few days behind. There are some exceptions to the rule. For example, if the financial institution has always allowed you to make your payments late, they might not be able to repossess your vehicle if you are only a few days behind.

What should I do if I know my car is going to be repossessed?

Take everything out of your car. Especially make sure to get all of your paperwork out of your glovebox. The repossession agent can charge you a personal property fee in order to get your belongings back. And even if you pay the fee, belongings tend to get “lost.” It is better to avoid the hassle if you can.

My car was repossessed, how do I get it back?

In California, if you finance your vehicle purchase, usually through a retail installment sales contract, you have a right to get your vehicle back by “redemption.” This means paying the entire remaining contract balance, plus fees, and getting title to the vehicle. Most people cannot afford this, but may be able to exercise the conditional right of “reinstatement.” This means, curing the default, getting the car back, and continuing to make payments. Your right to redeem the vehicle or reinstate the contract will be set forth on a document that the financial institution is required to send you after the repossession called a Notice of Intent or “NOI.”

Technically, the financial institution has up to 60 days to send out the NOI, but most send it out within a week.

If your vehicle has been repossessed, call the financial institution right away to see what you have to do to get the vehicle back. Make sure to take notes and write down what they tell you to do.

If you have any more questions, feel free to give us a call.

What is redemption?

After your vehicle is repossessed, the lender is usually required to send you a post-repossession notice. Under almost all circumstances, you will have the right to "redeem the vehicle." Redemption means getting title to the vehicle by paying off the entire amount of the loan, plus any repossession or other fees.

What is reinstatement?

The "right of reinstatement" is somewhat unique to California. "Reinstating the contract" means curing the default that led to the repossession (usually catching up on your missed payments) and paying any repossession related fees. You get your car back and resume monthly payments like normal.

Why was my right of reinstatement denied?

The right to reinstate your contract is "conditional" in California. For vehicle purchases that are financed, the financial institution only has to give the right of reinstatement once every twelve months and only twice during the course of the loan. This means, if your vehicle is repossessed more than twice, the lender does not have to give you a third chance to reinstate. In addition, the lender can deny the right of reinstatement, if they reasonably and in good faith believe that one of the following has occurred: (1) you lied on your credit application; (2) you hid the vehicle; (3) you have threatened to, or tried to, destroy the vehicle; (4) you have threatened the repo agent; (5) the vehicle was used as part of a serious crime; or (5) the vehicle has been seized and the seizing authority prohibits the lender from giving the vehicle back to you.

They already took my car, why do they say I still owe them money?

Generally, after a vehicle is repossessed, the financial institution will sell it at private auction. If the amount the vehicle is sold for at auction is less than the amount still owing on the contract, then the financial institution will assess and try to collect what is called a “deficiency balance.” However, the financial institution is entitled to do this if the post-repossession notice issued strictly complies with California law. Oftentimes it does not and the consumer may have a complete defense to any deficiency balance. This is why it is so important to keep all of your paperwork.