Consumers rights in a automobile repossession are established by the loan contract you signed and by the law of your state. If you fail to make payments on your automobile,
your creditor will then have the right to repossess your car without going to court or without warning you in advance.
State laws has limitations on how a creditor can take repossession of a vehicle and resell it to reduce or eliminate your debt. If these laws are violated, your creditor may lose other rights against
you and may be required to pay you damages.
When a creditor attempts to repossess a automobile, they may not commit a "breach of the peace" by using physical force or make threats of force. Repossessing your automobile over your protest or
removing it from a closed garage without your permission also may be considered a breach of the peace, depending on your state laws.
After a creditor has taken repossession of your automobile, your creditor may decide to keep the car as compensation for your debt or to resell it in either a public or private sale. However, under
most state laws, your creditor must notify you about what will happen to the automobile because you have the right to demand that the car be sold instead. You may want to exercise this right if the
car is worth more than what you owe on it. If the car is to be sold at auction, most state laws require the creditor to inform of the date and place the automobile will be sold at.
Under certain state laws you may have the right to buyback the automobile by paying the full amount owed on it plus the expenses connected with its repossession. Some states have consumer protection laws that may allow you to reinstate your loan. This means that you can get your car back by paying the amount you are behind on your loan along with your creditor's repossession expenses.
Any sale of a repossessed car must done in a commercially reasonable manner. This does not mean that your creditor must get the highest possible price or even a good price for the vehicle. A resale
price that is below fair market value may indicate that the sale was not commercially reasonable.
A creditor cannot keep or sell any personal property found inside or prevent you from retrieving it.
However, this doesn't include most improvements made to the car itself, such as the addition of a car stereo or new rims and tires.
A creditor who violates these rights can be subject to pay fines, penalties and your creditor may lose the right to collect on a deficiency judgment. Any difference between what you owe on your loan
and what your creditor gets for reselling the vehicle is a deficiency. If you are sued for a deficiency judgment, you will be notified about the date of the court hearing. In order for you to fight the
case, you must appear at this hearing. If your creditor violated your consumer rights and breached the peace when seizing the vehicle or failed to resell the car in a reasonable manner, these may be
used as defenses against any remaining amount owed.
It can be beneficial to contact a attorney to determine whether you have grounds to contest a deficiency judgment. If you need specific information about consumer rights on automobile repossession in
your state, contact your state consumer protection agency.