What to know if your car is repossessed

What you need to know if your car has been repossessed or if you've fallen behind on car payments.

How does repossession work with a financed vehicle?

When you buy a vehicle using a loan, you agree to specific requirements and to pay down the loan on a regular schedule. Usually, your payment will include a fixed principal payment as well as interest on the loan. 

If you fall behind on your loan payments and can’t keep up with them, you should contact your lender to talk about your options. 

How does repossession work with a leased vehicle?

If you can’t meet the terms of your loan agreement for a leased vehicle, you don’t have the same protection as with a financed vehicle. The loan company is not required to provide notice before they take back your vehicle. You should take a look at your lease agreement to see if there are any unique requirements.

If you have questions or concerns about a leased vehicle that was repossessed by a loan company, the Attorney General’s Office may be able to help. Please contact our consumer hotline at (617) 727-8400 for more information. 

What kind of notification do I have to receive from my lender before they can repossess my financed car?

Before a lender can repossess your financed car, you have to receive notice that follows these requirements:

  • The notice can only be sent 10 days or more after default. You should review your loan agreement for the terms of default, but some contracts define default occurring when you have failed to make one or more payments.
  • The notice must be entitled: “Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act” (if your vehicle was financed through a Motor Vehicle Retail Installment Contract, an example of this is when a dealership helps you find financing) or “Rights of Defaulting Debtor under Massachusetts Law” (if your vehicle was financed through a direct consumer auto loan, which is when you find financing yourself, directly through a lender)
  • The notice must give you 21 days from when it was sent to catch up on your payments to avoid repossession. This is called the “default cure” period.
  • The due date must be on the notice
  • The notice must tell you the amount due

If you cure your default after receiving notice three or more times, the lender doesn’t need to provide any more notices before repossessing your vehicle. 

What rules does my lender have to follow?

Once the period to catch up on your payments has passed, the lender can repossess your vehicle, but they have to follow these guidelines:

  • The repossession agent can’t use force or threats when repossessing the vehicle.
  • The person sent to get the vehicle is not allowed to go onto your owned or rented property unless you allow it. But, if your car is parked on the street next to your property, the person doesn’t need to have your consent.
  • Repossession from other public or private locations is usually allowed as long as the repossession agent does not “breach the peace” or engage in disorderly behavior.
  • The person sent to get your vehicle has to inform the police department in the city or town where the repossession occurred about the repossession within one hour of taking your car. 

What can I do after my vehicle is repossessed?

If a lender takes your vehicle there are still rules they have to follow. 

  • The lender has to let you claim all of your personal property that might have been on or inside the vehicle. Note that the person sent to take back your car is allowed to charge a reasonable fee for holding your property.
  • The lender must tell you how much money is needed to pay back your loan. They have to give you 20 days after the day your vehicle was repossessed to pay that amount of money and get the vehicle back.  The amount you owe is usually the same as the remaining balance on the loan, combined with any reasonable fees assessed by the lender for things like towing, storage and repossession.
  • The lender can only dispose of your repossessed vehicle in a commercially reasonable manner. 
  • When the lender sells your repossessed vehicle, the fair market value of your vehicle will be used to reduce the amount you owe.  If the fair market value of your vehicle is less than you owe, you will potentially still owe your lender the difference. If the fair market value of your vehicle is more than you owe, you will be entitled to the extra money.   

If I need help, what should I do?

The Attorney General's Office is ready to receive formal complaints against lenders and repossession agents who may be violating the law. You may file a consumer complaint or contact our consumer hotline at (617) 727-8400 for more information.

For more information about repossession, go to the Massachusetts Court System’s page Massachusetts Law about Repossession

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