Consumer Protection

How to Protect Yourself: Automobile Repossession

Source: The Florida Attorney General's Office

When you buy a vehicle on credit, your creditor retains important rights to the vehicle until you have made your last payment in full. These rights are established by the contract you signed and by state law. The failure to make timely payments carries serious consequences. One of these consequences is that your creditor may have the right to repossess or take back your car without going to court or without warning you in advance. However, state law does place limits on how the creditor may repossess a vehicle and resell it to reduce or eliminate the debt. (Bankruptcy may also affect the repossession of a vehicle and you should consult your attorney.) If you find you cannot make your car payments, consider the following:

Will it help to talk to the creditor?

Because it is difficult to dispute repossession once it has occurred, contact your creditor once you realize your payment will be late. Many creditors will agree to a delay if they believe you will pay at a later date. Ask if you can have your missing payment applied to the end of the loan.

What is default?

Your contract will define what constitutes default. An example could be failure to make a timely payment. However, if your creditor has agreed to accept your late payment or to change your payment date, the terms of your original contract may no longer apply. If you do reach an agreement to modify your original contract, make sure it is in writing and signed by both parties to the contract. Oral agreements are difficult to prove and may be inadmissible as evidence in a court.

When can a creditor seize a vehicle?

Generally, your creditor has legal authority to seize your car as soon as you default on your loan. Once you are in default, your creditor may repossess your car at any time without prior notice and may come onto your property to do so. However, the creditor may not commit a “breach of the peace” by using physical force or threats of force. If this occurs, your creditor may be required to pay a penalty or compensate you for any harm done to you or your property.

What is voluntary repossession?

Voluntarily returning the vehicle to the creditor may reduce your creditor's expenses in retaking the car and may reduce the amount you will owe the creditor. However, voluntarily returning the vehicle does not eliminate your obligations to the creditor. For example, you will still be responsible for paying any deficiency on your loan and your creditor may still enter the repossession on your credit report.

What about my personal property left inside the vehicle?

Regardless of whatever method is used to dispose of the repossessed vehicle, a creditor may not keep or sell any personal property found inside the vehicle. This does not include most improvements made to the car, such as a stereo system or luggage rack. Recovery agents are responsible for completing an inventory of the personal property found in the vehicle. However, the recovery agent may dispose of the personal property found in the vehicle after providing you with written notice and instructions on how to retrieve your personal property. To reclaim your personal property, you may be required to pay reasonably incurred expenses for inventory and storage. If your creditor cannot account for valuable articles left in your car, you may be entitled to compensation and you should consult an attorney.

What are my rights if the creditor resells my vehicle?

Once your car has been repossessed, your creditor may decide to keep the car as compensation for your debt or resell it in a public or private sale. In either case, your creditor must notify you about what will happen to the car. If the creditor decides it wants to keep the car, you have the right to demand the car be sold instead. You may choose to exercise this right especially if the car is worth more than the amount owed on the loan. If the car is sold at a public auction, you must be notified of the date in advance. If sold via an auto dealer, you will be notified of a date after which it will be sold.

Any resale must be conducted in a “commercially reasonable manner.” For example, a resale price which is below fair market value may be unreasonable. If this occurs, you may have a claim against the creditor for damages or a defense against a deficiency judgment. You may also be entitled to buy back the vehicle by paying the full amount owed, plus any expenses incurred by the creditor. Additionally, you may be able to reinstate your loan by paying the amount you are behind on the loan plus your creditor's expenses.

What is a deficiency judgment?

A deficiency judgment is the difference between what you owe on your loan and what your creditor receives when reselling your vehicle. A creditor who has followed the proper procedures for repossession and sale is generally allowed to sue you for a deficiency judgment to collect the loan balance provided the unpaid balance at the time of the loan was $2,000 or more. If you are sued, you will be notified of a court date. You should attend the hearing because it may be your only opportunity to raise any legal defenses you may have. An attorney will be able to advise you as to whether you have grounds to contest a deficiency judgment. If your creditor has committed a “breach of the peace,” the creditor may lose the right to collect a deficiency judgment.

What should I consider when choosing a credit counselor?

If you need help managing your debts, you may decide to use the services of a credit counseling organization. Many credit counseling organizations are nonprofits and will work with you and your creditors to arrange a manageable way for you to get control of your debt. They can serve as an intermediary between you and your creditors to negotiate lower interest rates and less burdensome fees and can set up a payment plan that will enable you to pay off your debt within a fixed period of time. Counselors can also help you set up a budget and plan for future expenses. An organization’s use of the word “nonprofit” does not always mean its services are free, affordable or even legitimate. Some credit counseling organizations charge substantial fees or encourage consumers to make “voluntary” contributions. As with all financial matters, you should be careful to deal only with reputable organizations.

More information on credit counseling organizations, including tips for selecting a reputable organization, is available online at: Credit Repair and Debt Relief Services.

File a complaint.

If you believe your automobile has been wrongfully repossessed, you may file a complaint with the Florida Attorney General’s Office online at or by phone at 1-866-9-NO-SCAM. Additionally, you may file a complaint with the Federal Trade Commission online using their complaint assistant portal at You may also wish to file a complaint with the Better Business Bureau online at

You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State's consumer complaint clearinghouse, at