If you default on your car loan payments, your car loan lender has two ways to take your car back: repossession and replevin. Creditors usually prefer to use repossession because it's faster and less expensive than replevin. However, creditors may use replevin when repossession is not an option.
(To learn how replevin works, see Car Repossession v. Replevin.)
Here are some situations where a creditor might use replevin to take back your car if you default on the loan:
Potential Breach of the Peace
Most states allow car lenders to come on to property and seize vehicles -- without notice to the borrower -- as long as their action does not breach the peace. “Breach of the peace” has been defined to include:
use of violence or force
threats of violence or force
acts that are likely to provoke or excite the debtor into using force or violence
verbal confrontation with the debtor (sometimes)
breaking or damaging locks, chains, fences, doors, or other property to attempt access to the car
disturbing neighbors or other third parties (sometimes)
using law enforcement to assist in—rather than just observe—the repossession, and
trespassing into the debtor's home or secured garage.
If any of these or other events are likely to occur if the lender tries to take your car, it may resort to a replevin action instead.
Hidden or Missing Car
Just because the car loan lender may have a right of repossession does not mean that you are obligated to hand the car over to that creditor. If the car is hidden or missing from the location where the creditor expects to find it, then the creditor cannot legally make you do anything. Instead, the creditor must seek a replevin order from the court. Once the court issues and serves you with an order of replevin, then you are required to produce the car or disclose its location.
As with the case of a hidden or missing car, the car loan lender cannot make you open your garage or unlock your fence. Since the creditor also cannot legally break the locks, cut chains, or do anything else that might cause damage to other property or otherwise breach the peace, it must first seek a replevin order. Once the court issues and serves you with an order of replevin, then you are required to produce the car to the creditor. Alternately, the creditor may arrive with a Sheriff and cut locks to access the vehicle, if necessary.
Repossession Not Lawful
Creditors will also resort to replevins when repossessions are not allowed or questionable. Those situations vary. For example, repossessions are illegal in Louisana. Up until 2006, Wisconsin law also prohibited repossessions.
Other Reasons Creditors Use Replevins
Here are some other reasons:
- The creditor cannot get to the car.
- For various reasons, the creditor wants to getting the court involved to resolve legal disputes with the debtor.
- The creditorwants to “kill two birds with one stone,” by seeking a lawful return of the property and a money judgment against the debtor.
(To learn more about repossession, replevin, and deficiency judgments, see our Repossession of Cars & Personal Property area.)