Keeping up on car payments can be a challenge, but it’s imperative if you want to avoid repossession. Having your vehicle repossessed in California can end up costing you even more down the line, from fees associated with reinstatement to the toll a repossession can have on your financial health. Good communication with your lender may help to avoid repossession in the short term if you find yourself in dire straights.
California Laws and Guidelines for Car Repossession
In California, laws and guidelines for car repossession are outlined in Assembly Bill 1447, the Automobile Sales Finance Act. This bill states that your loan company is not required to provide you with notice before repossessing your car. In addition, you only need to have missed one payment by one day, and the lender is permitted to repossess the vehicle. After repossession, the lender must furnish vehicle owners with a notice stating how much is owed, how to go about paying the amount due and where they can go to get their car back.
Beyond just losing your vehicle, auto repossession can have a negative impact on your credit report and can make it more difficult to be approved for a loan or a line of credit in the future. Repossessions can stay on your credit history for seven years.
There is a chance that you could get your car back if you reinstate the loan after repossession. This requires you to pay the amount that was past due on your loan, plus whatever repossession expenses the lender incurred. It’s also possible that you could buy back the vehicle, if you were to pay the full amount that is owed. This would include not only your missed payments, but the entire outstanding amount on the loan.
When Can Your Car Be Repossessed?
California repossession laws, rules and regulations are important to understand. The state’s laws permit the repossession of a car as soon as you default on your automobile loan. The vehicle can be taken from any location that is considered publicly accessible, including your driveway or apartment parking lot. The car can be taken by an employee of the loan servicing company or a by third-party repossession agency hired by your financial institution.
To avoid having your vehicle repossessed, make all of your payments on time whenever possible. If you must miss a payment, attempt to negotiate with your lender. A grace period might be given one time, and alternate payment plans could be discussed. Refinancing the vehicle so that you have a lower interest rate or monthly payment might be an option, too.
If you know that you will be unable to make your payments for the remainder of the life of the auto loan, selling the vehicle might be the right choice for you. Speak with your lender before making any decisions, however.
Can You Repossess a Car on Private Property?
In most cases, a company cannot repossess a vehicle that is on private property. However, a driveway at a private residence is not considered private property for the purposes of repossession. A lender or repo company can take a car from your driveway if you are behind in your payments. However, they cannot repossess your car if it is located inside a garage.