Oklahoma Repossession Laws: What You Need to Know

Financing a car purchase helps many people afford a decent vehicle. But circumstances can change. If you can’t make your monthly payment, your lender can repossess your vehicle. Repossession is your lender’s right to take your car back. Most states have similar repossession laws, but you need to know Oklahoma’s specific rules.

How Many Payments Can You Miss in Oklahoma?

Missing even one car payment in Oklahoma puts you at risk. When you take out a car loan, the lender usually becomes a lienholder. They have a legal right to take back the car if you break your loan terms. Breaking these terms means you’re in default.

You’re usually in default if you miss a payment. Some loan contracts include a grace period. This gives you a few extra days to make a late payment without extra fees. But this grace period doesn’t always protect you from repossession.

Your lender might wait to charge a late fee. That doesn’t mean they must wait before starting the repossession process. Read your contract carefully to see what it says about missed payments and default.

Missing payments isn’t the only way to default on a car loan. Many contracts also require you to keep your car insured. If your insurance lapses or gets canceled, you could default. This happens even if you’ve made all your payments on time.

Will You Get Notified Before Repossession?

In Oklahoma, lenders usually don’t have to notify you before they repossess your car. The law doesn’t require them to give you a warning or send advance notice.

Some lenders choose to give a warning, especially if you’ve generally stayed current. They might send a letter, make a phone call, or offer a chance to catch up. But this is up to the lender, not the law.

Review your loan agreement to find out what to expect. It may include details about late payments, default, and whether the lender provides any notice.

How to Prevent Repossession

The best way to avoid repossession is catching up as soon as you can. Most lenders don’t act immediately after one missed payment. This is especially true if it’s your first time being late or you have good payment history.

If you’ve already missed a payment, making it up quickly could prevent repossession. But timing matters. Your lender may have already accelerated your loan. This means they’ve made the full remaining balance due right away. They no longer have to accept a late or partial payment once this happens.

Contact your lender as soon as possible. If you’re already behind or know you can’t make your upcoming payment, call before the due date. Your lender may tell you how long you have before they start repossession. Being upfront about when you can pay may help you work out a solution.

Some lenders may agree to a short-term plan or let you defer a payment. A deferral allows you to skip a payment now and make it at the loan’s end. If you’ve been reliable in the past, they may be more willing to work with you.

Act quickly and communicate openly. Many lenders would rather work with you than go through the trouble and cost of repossessing a car. If you need help negotiating with your lender, our partner Cambridge Credit Counseling can assist you with creating a payment plan.

What Repo Companies Can Do in Oklahoma

Lenders in Oklahoma don’t need a court order to repo your car. Repossession companies don’t need a special business license. But to tow your vehicle, repo agents need to be licensed as a wrecker service through the Oklahoma Department of Public Safety.

A repo company can take your vehicle from just about anywhere. It doesn’t matter whether your vehicle is on public or private property. Your vehicle can be repossessed when it’s parked on a street, in a parking lot, or in anybody’s home driveway.

Even if your car is parked inside a home garage with the door open, a repossession agent can go in and get it. But there are some things the repo agent can’t do.

They Can’t Breach the Peace

In Oklahoma, lenders can use self-help repossession. They don’t need a court order to take your car. But they can’t do it in a way that causes a breach of the peace.

What counts as a breach of the peace depends on the situation. Here are some examples:

• Entering a closed garage without permission
• Breaking a locked gate or damaging property
• Using or threatening physical force
• Continuing the repossession after someone objects

If you clearly object while it’s happening, the repo agent should stop.

Police can be present to keep things calm. But they aren’t allowed to help the lender or appear to take sides. If they do, that could also be a breach of the peace.

You Can Peacefully Object to a Repo

You have the right to object during a repossession attempt. If you clearly tell the repo agent not to take the car or to leave your property, they’re supposed to stop. Going forward after an objection is considered a breach of the peace.

Your objection doesn’t need to be formal. Just telling the agent to stop is usually enough. But stay calm and nonviolent. Threats, physical force, or damaging the repo agent’s vehicle or equipment could lead to criminal charges.

Keep in mind that objecting only stops the repossession at that moment. The repo company can come back later when no one is around. Your lender can also go to court to get an order allowing the repossession. If that happens, you may be responsible for extra costs. These include attorney fees, court costs, and added repossession fees.

Tribal Lands Have Different Rules

If your car is within a reservation, lenders and their repo agents have to follow the tribe’s law. Oklahoma repossession laws don’t apply on American Indian reservations located inside Oklahoma.

Military Members Get Special Protection

If you’re in federal military service, the Servicemembers Civil Relief Act protects against self-help repossession in certain situations. A lienholder needs a court order to repossess your vehicle when:

• You bought it before you began military service, and
• Your lienholder wants to repossess it during your military service.

Oklahoma law extends that same federal law protection to state military service members.

What Happens to Your Personal Property?

If you’re there during the repossession, ask the repo agent if you can remove your belongings before they take the car. If you’re not there, you still have the right to get your personal items back later.

The repo company or lender must give you a reasonable chance to collect your things. If you don’t know where your car is, ask your lender. They can’t legally charge you a fee just to get your belongings.

Getting everything back isn’t always easy. Items can be lost or damaged. It may be hard to prove what was in the car. To avoid problems, don’t leave valuables or important items in your car if repossession is a possibility.

What Happens After Repossession in Oklahoma?

Within two hours of repossessing your vehicle, the wrecker or towing service must report to law enforcement with details about the repo.

Now that it has your vehicle, your lender will sell it to offset your debt. There is a small exception to that requirement in certain situations where your lender can’t hold you liable for the debt.

You Must Get Notice Before the Sale

Your lender can’t sell your car without first giving you written notice. The lender has to send it within a reasonable time before they try to sell the vehicle. A reasonable time usually means 10 days or more.

The notice has to tell you:

• How to find out the amount you’d need to pay to save your car
• That you’re entitled to get a written accounting explaining how much you owe
• Whether your lender will be selling the car by making a private sale or at a public auction
• If it will be a private sale, then the soonest date when your lender may sell it
• If it will be a public auction, then the auction’s exact date, time, and location
• How your lender will apply the sale proceeds to determine how much you still owe

The notice lets you know how long you have if you want to buy your car back. Also, if the sale will take place at a public auction, you can go to it and bid on your car.

The Sale Must Be Commercially Reasonable

When selling your repossessed vehicle, your lender has to do it in a commercially reasonable manner. But that doesn’t mean your lender has to sell it for fair market value. It just means that the entire sale process has to be carried out like a regular business transaction.

For example, it’s probably not above-board for the lender to sell a repossessed vehicle at a very cheap price to someone who has a close connection to the lender. Also, it might not be commercially reasonable for a lender to keep the car for a long time without trying to sell it.

There is a particular situation where the lender’s delay is clearly improper. If you’ve paid at least 60% of your vehicle’s cash price, your lender has to sell it within 90 days of repossessing it.

How Sale Proceeds Are Applied

The sale proceeds don’t start reducing your debt until all the repossession costs are covered. These costs can include the actual repossession, storage fees, expenses to prepare the vehicle for sale, and any costs involved with the sale. The expenses must all be reasonable. The proceeds can also be used for reasonable attorney fees and legal costs, if allowed by your loan agreement.

Whatever money is left will be credited to your loan balance. If the sale proceeds cover your debt completely and any money remains, you get the surplus. But this rarely happens. In most cases, there will be a deficiency balance, which is the unpaid balance of your debt.

Do You Still Owe After Repossession?

In most cases, yes. You’ll still owe money even after your car is repossessed. Repossession doesn’t erase your loan. Selling the car helps your lender recover some of what you owe. But it’s rare for the sale to cover the full balance. The leftover amount is called a deficiency balance. You’re usually still responsible for paying it.

You’re more likely to have a deficiency balance if:

• Your loan balance was more than the car was worth at repossession time. Cars lose value quickly, and high-interest loans make it easier to fall behind.
• The lender adds extra costs like towing, storage, and selling fees to your balance.
• The car sells for less than its market value, which happens often at auction.

Once your lender first demands payment for the deficiency balance, they’re required to give you a written explanation. This must include:

• Your loan balance before any adjustments
• The sale price of your vehicle
• Any credits, such as canceled insurance or unused interest
• All costs related to the repossession and sale

If you haven’t received this breakdown, you can request it. Your lender must send it within 14 days of your request.

Voluntary Repossession Doesn’t Erase Debt

Some people think that giving the car back voluntarily means they won’t owe anything. That’s not true, but it does have some advantages. Voluntary repossession doesn’t erase your debt. But it can help you avoid paying repossession fees since the lender doesn’t have to send someone to take the car.

If you’re struggling with deficiency debt or other financial obligations after repossession, you have options. Speaking with a bankruptcy attorney for free can help you understand whether Chapter 7 or Chapter 13 bankruptcy might discharge or restructure your remaining debt.

Can You Get Your Car Back After Repossession?

It’s possible to do so, but it’s far more difficult than just making up the payments you’re behind on.

You have a right to redeem your car. That means you can get it back by paying the total balance left on your car loan. You also have to pay your lender’s repossession expenses. If you’re going to redeem your vehicle, you may not have much time. You have to pay the complete redemption amount before your lender sells the vehicle. The notice your lender has to send about its plan to sell your car also must tell you how to find out the redemption amount.

Where to Find More Information

• Legal Aid Services of Oklahoma, Inc. provides legal assistance for free to those who qualify.
• The Oklahoma Bar Association website lists a number of resources for seeking free or low-cost legal assistance.
• You can look for an Oklahoma consumer law attorney in the member listings of the National Association of Consumer Advocates.