California Repossession Laws: Your Rights When Facing Repo
California lenders can repossess your car immediately after you default on your loan. You have strong legal rights during and after repossession. Understanding these rights helps you protect yourself and potentially recover your vehicle or eliminate debt through bankruptcy.
Get Free ConsultationFalling behind on car payments puts your vehicle at risk. California law governs every step of the repossession process. Understanding your rights helps you protect yourself when facing repo.
What Is Repossession?
Repossession happens when your lender takes your car after you default. You signed a security agreement when financing your vehicle. That agreement pledges your car as collateral for the debt.
Facing Repossession? Bankruptcy May Help You Keep Your Car
Chapter 13 bankruptcy can stop repossession and let you catch up on car payments. Chapter 7 can eliminate the deficiency balance if your car was already repossessed. Speak with a bankruptcy attorney today.
Check If You QualifyThe lender can physically reclaim your vehicle if you stop paying. Both the lender and repo company must follow California law throughout the process.
How Many Missed Payments Trigger Repossession in California?
Your lender can repossess your vehicle the moment you default. Default might mean missing one payment. It could mean paying less than the full amount due.
Some contracts require minimum insurance coverage on the vehicle. Letting your insurance lapse counts as default under those agreements. Review your contract carefully to understand what triggers default.
Will You Receive Notice Before Repossession?
California law doesn’t require advance notice of repossession. Your lender might send a final warning or default notice. Some loan agreements include notice requirements even when state law doesn’t.
Contact your lender immediately if you receive any warning. You might be able to work out an arrangement.
How You Can Prevent Repossession
Catching up on payments prevents repossession. You can reinstate your loan by paying all missed payments. You’ll also need to cover late fees and unpaid interest.
California law gives you the right to reinstate before repossession happens. Your loan agreement doesn’t need to list this right. Contact your lender to discuss your options if catching up all at once isn’t possible.
What Repo Companies Can and Cannot Do in California
California law allows repo agents to take your car from public spaces. They can access private businesses and residences. Agents may enter your driveway, yard, or unlocked garage.
Repo agents cannot breach the peace during repossession. Breaching the peace includes several prohibited actions:
- Using force to cut locks or enter secured areas
- Threatening or using violence against you
- Damaging your car or other property
- Creating a disturbance in your neighborhood
The breach of peace rule applies to everyone involved. You and your family members cannot physically interfere with the repo process. Doing so could result in misdemeanor charges and additional fees.
California Licensing Requirements for Repo Agents
The Bureau of Security and Investigative Services (BSIS) licenses all repo companies. Agents must show you proof of their BSIS license upon request.
Repo companies must display identifying information on their tow trucks. Both sides of the truck must show either the BSIS license number or business contact details. You can verify any company’s license status on the California Department of Consumer Affairs website.
Your lender’s employees can repossess vehicles without a BSIS license. They still must follow all breach of peace rules.
Getting Your Personal Property Back
Repo agents should explain how to retrieve belongings from your car. If you’re present during repossession, the agent may let you remove items immediately. They aren’t required to do this.
The repo company will remove all personal items after taking your vehicle. Attached items like custom rims or after-market speakers typically stay with the car.
Storage fees apply to your personal belongings. You must pay these fees to get your items back. Within 48 hours of repossession, the repo company must send you:
- Contact information for the repo company and lender
- A complete list of removed property
- Instructions for retrieving your belongings
- Storage fee details
You have 60 days to pay storage fees and collect your property. After that, the repo company can keep, sell, or dispose of your belongings.
Remove all personal items from your vehicle if repossession seems likely. You’ll avoid storage fees and retrieval hassles.
What Happens After Your Car Gets Repossessed
Your lender has several options after repossession. They can keep the car, lease it, or sell it privately or at auction. Within 60 days, your lender must send written notice of their intent.
Auction notices must include specific details:
- Sale date, time, and location
- Contact number for sale information
You can attend the auction and bid on your vehicle. You might even buy it back. California law requires at least 15 days’ notice before the sale.
Your lender must get a commercially reasonable price for your car. Sale proceeds first cover repossession and sale expenses. Remaining funds apply to your loan balance.
A deficiency balance remains if the sale doesn’t cover your full debt. Your lender can sue you for this difference. They can only charge a deficiency if they followed all legal requirements and sent proper notices.
Do You Still Owe Money After Repossession?
You remain responsible for your car loan after repossession. California law also holds you responsible for all repo-related costs:
- Towing, cleaning, and processing fees
- Vehicle and property storage charges
- Administrative fees to law enforcement
- Auction fees, advertising, and legal costs
Voluntary surrender helps you avoid many of these charges. You’ll still owe a deficiency balance if your car is worth less than your loan. You’ll save hundreds or thousands in fees by turning in the vehicle yourself.
Getting Your Car Back After Repossession in California
Your lender’s 60-day notice must explain how to get your vehicle back. California law gives you two options: redemption or reinstatement.
Redemption: Paying Off Your Entire Loan
Redemption requires paying your complete loan balance. You must cover all interest, late fees, and repo expenses. You’re essentially paying off the loan in full.
Reinstatement: Bringing Your Loan Current
Reinstatement means catching up on missed payments. You pay all past-due amounts, interest, late fees, and repo costs. California law limits reinstatement to once every 12 months. You can only reinstate twice during your loan’s lifetime.
You lose redemption rights if you:
- Provided false information on loan documents
- Hid your car or interfered with repossession
- Damaged the vehicle beyond normal wear
- Used your car to commit a crime
Your lender’s notice includes a phone number for payoff information. You have 15 days after the notice date to redeem or reinstate. You can request a 10-day extension if needed.
Contact a bankruptcy attorney for a free consultation if you cannot afford to get your car back. Bankruptcy might help you eliminate the deficiency balance and get a fresh start.
Additional Resources for California Repossession
The California Bureau of Security & Investigative Services offers several helpful resources. You can verify repo agent licenses on their website. They also maintain a comprehensive FAQ section about repossession rights.
The California Department of Motor Vehicles publishes the Car Buyer’s Bill of Rights. This document explains your complete rights as a borrower. Review it to understand all protections available to you.