A vehicle repossession can often come as a surprise. In many states, including Pennsylvania, the lender is not required to tell you in advance that it will repossess your vehicle. Often, your lender will attempt to repossess your vehicle in the middle of the night, when no one is around to stop it. The lender’s repo company will then take the vehicle either to a storage lot or an auction. But how do you know where they took it, and how do you get it back?
Notice of Repossession is Required
After a vehicle repossession, the law requires the lender to send the borrower a specific notice, addressed to the last known address of the borrower. This repossession notice—also known as the Notice of Intended Disposition or Notice of Right to Redeem—must be mailed immediately or shortly after the repossession. That notice is important because it is required to contain specific information informing you exactly where the car is, how much it will cost for you to get it back, and how much time you have to do so. If you do not “redeem” (pay the lender to get the car back) the car will then be sold, and the lender will apply the sale proceeds to your loan balance, which usually reduces but does not eliminate your loan balance.
How Much Do I Have to Pay to Get the Car Back?
In many states, including Pennsylvania, the only way to get your car back after a repossession is to pay the entire loan balance, not just past due payments. For example, let’s say you missed one $300 payment, prompting the lender to repossess your vehicle. You owe $10,000 on the loan. To get the car back before the lender sells it, you have to pay the entire $10,000, plus reasonable repossession expenses.
How Much Time Do I Have to Get the Car Back?
You can get the car back at any time before the lender sells the vehicle, even if the vehicle was already taken to an auction. In Pennsylvania, the lender is required to hold the car for 15 days before it can be sold. But even after the 15-day period, you have the right to get the car back so long as you can pay the entire loan balance and reasonable repossession expenses. Other states might permit the lender to hold the car for a shorter time period, such as ten days. But no matter what, you have the right to redeem until the vehicle is sold.
What Happens if I Can’t Pay to Get My Car Back?
Many people do not have enough money to pay the entire loan balance, and the lender will sell the vehicle at a private or public auction. You have the right to be present at and oversee any public auction. The lender—in the repossession notice—should have told you the date, time, and location of any public auction if they intend to sell it by public auction.
If the car is sold, then typically the lender will send you another notice explaining the amount you owe after the sale. This notice—sometimes called an “Explanation of Deficiency,” must itemize specific information about how much you owe, including the principal balance, the sale proceeds, the repossession expenses, and the auction expenses.
Seek Legal Help to Enforce Your Consumer Rights
If your lender did not give you the required post-repossession notices containing the information described above, you might have a consumer protection claim against your lender. Your right to receive these post-repossession notices apply even if you were in default on the car loan. If you feel that your lender failed to give you the information required in these post-repossession notices, contact Flitter Milz for a no cost legal evaluation to determine whether your consumer rights have been violated.