California car repo laws are clear. Lenders have legitimate rights to expect payments to be made on time. The lender does not need to put up with you if you are always late. The lender can repossess your vehicle as soon as you are late. And they do not have to give you any advance warning.
But most lenders are willing to work with you, up to a point. Lenders lose money on a repossession. So they are motivated in most cases to be reasonable if you are being reasonable.
The key is to avoid repossession. Here is how you do that.
Keep in touch with your lender. If you can’t pay on time, call your lender BEFORE that payment is due and talk to them. Explain why you can’t pay right now. Possible resolutions include asking if they will defer the payment that is coming up and extend the contract by a month, or perhaps making a double payment next month. Do not make any promises that you are not 100% certain of keeping.
Keep your request reasonable. Don’t ask for too much. They have a legitimate right to be paid, and they don’t want to listen to empty excuses. Remember, they hear this kind of thing all day. If you can assure them this is a very temporary problem and it won’t happen again, there is a good chance that you can work it out and keep your car.
After repossession, your car is liable to be sold at auction. Cars that are sold at a repo auction normally sell for only a small fraction of their street value. After crediting your account with the net selling proceeds, the lender may sue you to get the remaining balance that you owe.
A voluntary repossession has no legal significance. And you can still be sued for the remaining loan deficiency.
If your car has been repossessed, you have a limited right under California car repo laws to get it back
Under California car repo laws, the lender needs to serve you at least 15 days prior to sale with written notice of intent to sell the vehicle, either by personal service or by certified or first-class mail. You may have the right to redeem your car prior to sale by reinstating your loan. That means paying up all your back payments, late fees, repo costs, and provide proof of insurance.
Before the lender can sell your car, they must give notice of intent to sell it. This Notice of Intent to Sell must be served within 60 days of repossession, and gives you the right to ask that the lender delay the sale for 10 days.
California Car Repo Laws say you have lost your right to get your car back if you have:
- Provided false information on your loan application
- Hid the vehicle in order to avoid repossession
- Damaged the vehicle, or threatened to damage it
- Committed, or threatened to commit, violence against anyone involved repossessing the vehicle
- Used the vehicle in the commission of a criminal offense
- Your right to reinstate your loan contract is limited to once every 12 months, and twice over the life of the contract.
Filing bankruptcy may allow you to regain your vehicle in cases where you do not have the money to pay for reinstatement of your loan
The California car repo laws can’t force the lender to return your car unless you have all the money it takes to get your loan current. However, the bankruptcy laws have provisions that can let you get your car back and rewrite your loan. If you need a fresh do over of your car loan, bankruptcy could be your best or only option.