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In a NutshellRepossession is the process of taking back a car after the owner defaults on their auto loan. Each state has different laws and regulations that dictate every step of the repossession process from start to finish. This page will provide an overview of California's Repossession Laws and what you should know if you've fallen behind on car payments.
Written by Upsolve Team.
Updated March 22, 2024
If you’re behind on your car payments, your vehicle could be at risk of repossession. Repossession is when your auto lender physically takes your car from you after you default on your loan. When you finance a car, you sign a security agreement. In this agreement, you pledge the car as collateral for the debt. This is what allows the lender to repossess the car if you don’t pay. When repossessing a car, the lender and repo company must comply with California law. This guide covers how repossessions work in the Golden State and what you can do if you’re facing repossession.
Under California law, your lender can repossess your vehicle the instant you default on your loan terms. Depending on your financing agreement, default could mean being one or more days late on your payments or paying less than the full payment amount. Some auto loans require you to keep a minimum amount of insurance on the vehicle, which means you’re in default if you let the insurance lapse. Review your contract carefully to learn what counts as a default for your loan.
In California, your lender doesn’t have to give you any advance notice of repossession. In some cases, though, your lender might send you a final warning or a notice of default before proceeding with repossession. Your loan agreement might also include some notice requirements, even though state law doesn’t provide this right. If you receive a warning or notice, contact your lender to see if you can work out an arrangement to avoid repossession.
The best way to prevent repossession is to catch up on the payments, if possible. You can reinstate your loan — and stop the repossession — by paying all the missed payments, plus any late fees and unpaid interest. Under California law, you have the right to reinstate your loan at any time before repossession, even if the right to reinstate isn’t listed in your loan agreement. If you can’t afford to catch up with all your payments at once, you may still be able to catch up over time. Contact your lender to find out what you can do to prevent a default or repossession.
Under California law, a repossession agent can take your car from a public parking lot or street or from a private business or residence. A repo agent may come onto your private property, including your driveway, yard, or unlocked garage. But they can’t breach the peace. Breaching the peace includes using force, such as cutting a lock or forcibly entering a locked garage, gate, or enclosed area. Breaching the peace also includes using violence, threatening you, or damaging your car or other property.
The rule against breaching the peace applies to everyone during a car repossession, including you and your family members or friends. If you breach the peace or otherwise physically keep the repo company from doing their job, you could be charged with a misdemeanor and face other fines and charges in addition to ordinary repo expenses.
Vehicle repossession companies in California must be licensed by the Bureau of Security and Investigative Services (BSIS). The repo agent or repossessor must show you proof of their BSIS license if you ask for it. Repo companies must also have either their BSIS license number or business name, address, and phone number visible on both sides of their tow truck. You can verify a company’s license status on the California Department of Consumer Affairs website.
Instead of hiring a repossession agency, your lender can have one or more of their employees repossess your vehicle. The lender’s employee doesn’t have to be a licensed repo agent or comply with the BSIS requirements. They still must follow the state laws about breaching the peace.
If you have personal belongings in your car when it’s repossessed, the repo agent should tell you how to get those items back. If you’re present during the repossession, the repo agent may allow you to take your personal property out of the car before it’s towed away. But the repo agent isn’t required to let you do this.
After repossession, the repo company will remove all your personal items from the vehicle. Items that are attached to the vehicle, such as custom rims or after-market speakers, typically aren’t removed. The repo company can charge you for storing your personal effects. You’ll have to pay the storage fees to get your things back. Within 48 hours after the repossession, the repo company must send you:
If you don’t pay your storage fees and pick up your property within 60 days after the repossession, the repo company can keep, sell, or dispose of your belongings. If you’re at risk of repossession, remove your property from your vehicle so you won’t have to deal with getting it back from the repo company.