How Motor Vehicles Are Repossessed

When you default on a secured loan, the lender can take the collateral from you. Most auto loans, whether you got the loan through a dealer, a bank, a credit union, or another lender, give the creditor the right to repossess the vehicle if you quit making payments.

After you default on your car payments, the lender won't be shy about repossessing your motor vehicle, especially if it's still relatively new. In some states, however, the lender must first notify you of the default and give you the right to make up the payments, called a right to "cure," before repossessing your car.

The repo agent can and can't take specific steps when attempting to repossess your car, van, truck, SUV, motorcycle, or another vehicle. For example, the repo agent can't breach the peace when repossessing the vehicle.

Repo Agent Can't Breach the Peace When Repossessing a Vehicle

A repossession company generally can't use force to get to your vehicle—repossessions must occur without any breach of the peace. Unfortunately, "breach of the peace" is defined very broadly.

• It's usually legal for a repossessor to hotwire a car.
• It's legal to use a duplicate key and take a car.
• Most courts have said it's legal to remove a car from a carport or an open garage (meaning the door is up).
• In most states, taking a car from a garage is legal if the door is closed but unlocked. However, a few cautious repossessors won't do this.
• Breaking into a locked garage is generally illegal, even by using a duplicate key. But a repossessor might anyway, especially in parts of the country where the repossession won't be nullified, and all the lender will be required to do is fix the lock.

How the Repo Agent Finds Your Car to Repossess It

To take your car, the repossession company will have to find it. The lender will supply the repossessor with your home and work addresses and any other useful information (such as where you attend school). Many vehicle purchase and lease agreements today authorize the lessor to use the vehicle's electronic locating device to locate the vehicle.

If the repossessor finds the car in your driveway or on the street in front of your house, the repossessor will wait until you're asleep or out, use a master key or hotwire it, and then drive away.

What If the Car Isn't Near My House?

The repossessor will search the neighborhood if the car isn't near your house. Many debtors, fearful of having their car repossessed, park it about three blocks from their home. This is the distance they figure is far enough away to be hard to find but close enough to be convenient to use. Repossessors know this trick and often find a car within minutes.

If you hide your car and a court finds that you acted in bad faith, you might lose your right to get the car back if and when it's finally found. And in some states, deliberately hiding your car from a repossession company is a crime.

Objecting to a Vehicle Repossession

The repossession company doesn't have unlimited power to take your car. If you or someone else, like a relative, objects when the repossessor tries to take your car so that taking the car would breach the peace, the repossessor must stop.

But this doesn't mean you get to keep your car. The repossessor can try again another day or get a court order to take the car.

How Can I Avoid a Car Repossession?

If you're behind on your payments for a secured debt, it's a good idea to communicate with your lender. Your lender might be able to offer you a solution, such as a reduction in payment amount or interest rate that can help you catch up on your payments and avoid repossession.

Talk to an Attorney About Car Repossession

If you think your car loan lender didn't comply with the law when repossessing your vehicle and you want the vehicle back, talk to a lawyer right away. A lawyer can help you raise the issue directly to the lender or help you file a lawsuit in court.

Also, you might want to consider talking to a lawyer if the lender sues you for a deficiency (the difference between what you owe on the car and what the lender resells it for after repossessing it) after the repossession.