California Repossession Laws

Having your car repossessed is stressful, and many people don’t know what a lender is and isn’t allowed to do. California law gives lenders the right to repossess when you’re in default, but it also sets firm rules for how the repossession happens, what notices you get, how you can get the car back and what you may owe afterward. Faler Law Group represents California drivers whose vehicles were wrongfully repossessed.

When Can a Lender Repossess Your Car in California?

If you’re in default under your financing contract, usually by missing payments, a California lender can generally repossess the vehicle without going to court and without warning you first. California Commercial Code section 9609 allows this “self-help” repossession only if it’s done without a breach of the peace.

Your contract may define default differently or give you a grace period, so it’s worth reading. And if you weren’t actually in default, for example because a payment was misapplied, the repossession itself may be wrongful.

What a Repo Agent Can’t Do

A repossession that breaches the peace can be unlawful. Examples include:

• Breaking into a locked garage, gate or other closed structure to take the vehicle.
• Using force or threats, or having police help take the car when there’s no court order.
• Continuing after you clearly object in person at the scene.
• Causing a confrontation or public disturbance to complete the repossession.

Notices You’re Entitled To

From the repossession agency

Under Business and Professions Code sections 7507.9 and 7507.10, the repossession agency generally must send you, within 48 hours (longer around weekends and holidays), a notice identifying the lender and the agency, and an inventory of personal belongings found in the vehicle. Your belongings must be stored for at least 60 days so you can retrieve them.

From the lender: the notice of intent

Most dealer-financed car purchases in California are conditional sale contracts covered by the Rees-Levering Act. For those contracts, Civil Code section 2983.2 requires the lender to send a written notice of intent to dispose of the vehicle at least 15 days before the sale (20 days if mailed outside California). The notice must explain, among other things:

• Your right to redeem the vehicle by paying the full balance, with an itemized account of what you owe.
• Whether you have a right to reinstate the contract, or why you don’t.
• Your right to a 10-day extension if you ask in writing.
• Where the vehicle will be returned, and where to send payment.
• That you may owe a deficiency if the sale doesn’t cover your balance.

Getting Your Car Back

• Reinstatement. If you’re eligible, you can pay the past-due payments plus certain repossession costs and fees, and the contract continues as before. Some situations make a buyer ineligible, and the lender’s notice must say why.
• Redemption. You can pay the full contract balance plus allowed costs and keep the vehicle.

Either way, the deadline is short, so read the notice right away and ask for the 10-day extension in writing if you need more time.

After the Sale: Deficiencies and Surpluses

If the vehicle sells for less than you owe, the lender may try to collect the difference, called a deficiency. For contracts covered by Civil Code section 2983.2, the lender generally can’t collect a deficiency unless it sent a proper notice of intent within 60 days of the repossession. Other types of car loans follow different notice rules. The sale itself also has to be commercially reasonable under Commercial Code section 9610. If the sale brings in more than you owe, the surplus must be returned to you.

You’re also entitled to a written accounting of the sale if you request it in writing within one year.

When a Repossession May Be Wrongful

• You weren’t actually in default, or the lender misapplied your payments.
• The repossession involved a breach of the peace.
• You didn’t receive a proper notice of intent, or it was missing required information.
• The lender refused to let you reinstate when you were eligible.
• Your personal belongings weren’t inventoried, stored or returned.
• The vehicle was sold in a commercially unreasonable way, such as far below its value.
• The car was repossessed from an active-duty servicemember without a court order, in situations where federal law (the Servicemembers Civil Relief Act) requires one.

What You May Be Able to Recover

Every case is different, but depending on the facts, you may be able to:

• Defeat a deficiency claim if the lender didn’t follow the notice rules.
• Recover your losses, such as the value of your equity in the vehicle, lost personal property and related costs.
• Seek additional damages in some cases, including punitive damages where a lender or repo agent acted with malice or oppression.

What to Do After a Repossession

1. Read every notice right away and note the deadlines. Ask in writing for the 10-day extension if you need more time.
2. Keep your contract and payment records, including bank statements showing payments the lender may have misapplied.
3. Write down what happened during the repossession: the time, place and anything the agent said or did. Save photos, videos and witness names.
4. Request your belongings in writing from the repossession agency within the storage period.
5. Request a written accounting after the sale.
6. Talk to an attorney before paying a deficiency or signing anything.

Dealers and lenders mislead buyers in other ways too. Learn about other types of auto fraud.

California Repossession Laws FAQ

Does a lender have to warn me before repossessing my car in California?

Generally, no. If you’re in default under your contract, a California lender can usually repossess without advance notice or a court order, as long as it doesn’t breach the peace. Your contract may give you additional rights, so check it.

Can a repo agent take my car from my garage?

A repossession can’t involve a breach of the peace. Breaking into a locked garage or other closed structure, using or threatening force, or continuing after you clearly object can make a repossession unlawful.

How do I get my car back after it’s repossessed?

For most dealer-financed contracts, California law gives you two options described in the lender’s notice of intent: reinstate the contract by paying the past-due amounts plus certain costs, if you’re eligible, or redeem the vehicle by paying the full balance plus costs. The notice must give you at least 15 days, and you can ask in writing for a 10-day extension.

What happens to my belongings that were in the car?

The repossession agency must send you an inventory of personal property found in the vehicle, generally within 48 hours, and store those items for at least 60 days so you can get them back.

Do I still owe money after my car is repossessed and sold?

Possibly. If the sale brings in less than you owe, the lender may seek the difference, called a deficiency. But for most dealer-financed contracts, Civil Code section 2983.2 allows the lender to collect a deficiency only if it sent a proper notice of intent within 60 days of the repossession and at least 15 days before the sale.