Have you had your automobile repossessed? Was the repo illegal? Is the bank or finance company now trying to collect a deficiency balance from you? If so, then call the Vachon Law Firm today to learn more about your legal rights. We specialize in both illegal repossession cases and lawsuits to eliminate post-repossession deficiency balances.
This Webpage will debunk three important misconceptions that some consumers have about repossession, will provide some general guidance for consumers whose automobiles have been seized, and will emphasize that all consumers who have had their automobiles repossessed should (1) keep all of the repossession-related paperwork (including the envelopes in which you received any mailed documents), and (2) contact an expert consumer law attorney (preferably one who specializes in auto repossessions) to find out if the lender complied with all of California’s auto repossession disclosure requirements. It also contains a list of additional repossession-related questions and links to the questions’ answers.
Keep reading to learn more about your legal rights!
Note: if Mercedes-Benz Financial Services repossessed an automobile that you previously leased, then click here for important information about a lawsuit challenging Mercedes-Benz Financial Services repossession practices.
Automobiles May be Repossessed Without Any Notice Whatsoever
One common misconception among some consumers is the belief that when a bank or finance company has grounds to repossess an automobile it is required to provide notice to the vehicle’s owner that it intends to or might order a repossession. In reality, there is absolutely no per-repossession notice requirement under California law.
While it is true that banks and finance companies often notify consumers that they are in danger of having their automobiles seized, they do so voluntarily and only to coerce consumers to promptly become current on their loans. There is no legal requirement whatsoever that a lender notify you prior to repossessing your automobile.
There is No “Grace Period” For Late Payments
Many consumers also mistakenly believe that there is a 5-day, 10-day, or 30-day “grace period” that allows them to make payments after their formal due dates. But in reality, there is no grace period of any kind under California or federal law. Your payments are due on the date listed in your purchase or lease contract, and any payments made after such date are late. As a result, car dealers and automobile finance companies are completely and entirely justified (at least legally) in repossessing your automobile the day after your payment is due if you failed to pay on time.
That being said, most banks and finance companies would never repossess an automobile when someone is only one or two days behind on their payments. But they hold off on repossession only because they want to keep you as a current and future customer. There is no legal requirement that they wait to repossess your automobile if you are late on one of your payments.
A Repossession Does NOT Mean That You Are Done Paying For Your Automobile
Some consumers also mistakenly believe that if they do not want or cannot afford their car that they can just “give it back” or allow their vehicles to be repossessed by refusing to make payments, and that this will put an end to their payment obligations. However, this is simply untrue. Under California law, repossession does not extinguish your obligations to make all of the payments required under your purchase or lease contract. Rather, after an automobile repossession the bank or finance company (whoever repossessed the vehicle) will calculate the total amount that you still owe under your contract, and then it will sell your vehicle at auction and apply the proceeds of the auction sale to the amount you owe. The amount that you still owe after the auction proceeds have been subtracted is called the “deficiency balance.” And after the auction sale, the bank or finance company will come after you and attempt to collect the deficiency balance.
In virtually all cases, after a repossession and auction sale the former owner will still owe thousands (or tens of thousands) of dollars as a deficiency balance. Indeed, in most cases your post-repossession deficiency balance will likely be more than the amount you would owe if you sold the vehicle yourself (because at auction sales automobiles are sold for less than the prices consumers could sell them for in private sales or by trading them in).
It Is Extremely Important That You Keep ALL Repossession-Related Paperwork
The most important advice this page can offer is this: if your vehicle is repossessed you should collect and keep all of your repossession-related paperwork, including the envelopes in which all documents were sent to you. The reason for this is that, as stated above, when the repossession is over and your vehicle is sold at auction you will end up owing a deficiency balance to the lender who financed your automobile purchase or lease. However, in some instances you might (if you have the documentation to support your claim) be able to partially or entirely eliminate your deficiency balance.
California’s repossession-disclosure laws are extremely strict. As a result, if the bank or finance company fails to send you the required documents, or sends you the documents but fails to include in them all of the legally-required information and disclosures, then it will likely be prohibited from attempting to collect a deficiency balance from you.
If your vehicle is, or has been repossessed, you should always call an expert auto-repossession attorney to ensure that the repo was lawful and to confirm that the lender fully complied with California’s mandatory repossession disclosure rules. The Vachon Law Firm offers FREE consultations to consumer repossessions victims, so feel free to call us at (858) 674-4100 for more information.
Additional Repossession Questions and Information
Have more questions about California’s auto repossession laws that are not answered above? If so, check the links below which address and answer some of the most common repossession questions:
- Important Information For Consumers Whose Leased Automobiles Were Repossessed by Mercedes-Benz Financial Services
- Can a Car Dealer or Lender Repossess My Vehicle If I Have Made All of My Payments?
- What Happens to My Possessions That Were in My Car When it Was Repossessed?
- Can I Get My Repossessed Automobile Back?
- What if a Lender Illegally Repossessed My Car?
- Can the Repo Company Charge Me for Storing My Personal Property?
- What if a Lender Broke Into My Garage or Assaulted Me?
Want to Talk to a San Diego Auto Repossession Attorney?
At the Vachon Law Firm, we are experts in illegal repossession cases and cases seeking to eliminate consumers’ deficiency balances. We have sued dealers and finance companies individually and in class actions and have obtained relief for thousands of California consumers in automobile-related lawsuits. Call us today if you have any questions about your automobile repossession, or if you just want to confirm that the repo was done in a legal manner. Repossession consultations are always free at the Vachon Law Firm. You can also contact us by email.
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