Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Mar 22, 2022

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

According to the Federal trade Commission (FTC), when you are in default, a creditor can repossess your car at any time, without notice. While most are given warnings and issued late fees when a borrower defaults on an auto loan, in most states creditors are permitted to legally repossess vehicles as soon as default occurs. If vehicle repossession occurs and the creditor decides to auction the car, borrowers are responsible for the difference in the amount of their loan and the amount the creditor received at auction.

For example, if your loan had $10,000 remaining, and your car was repossessed and auctioned for $7,000, then you would owe your creditor $3,000.

On the rare occasion that the creditor is awarded with more money at auction than your vehicle is worth, your creditor must pay you the surplus.

The repossessor that comes to your property to repossess your car must take care not to commit a “breach of the peace.” Depending on the state, a breach of the peace usually occurs when the repossessor uses physical force or threatens with physical force. If a breach of peace occurs, contact your attorney, as you can be awarded with compensation. You can also use the breach of peace as legal defense when it comes to paying the deficiency of the loan off.

Any and all personal property in the car at the time of repossession is still yours. The repossessor must not sell or keep any of those items. Depending on the state, the repossessor may be required to notify you of the contents and inform you on how and where you can retrieve them.

To learn about your state-specific laws regarding repossession, contact your state Attorney General or local consumer protection agency.