What is a repossession?

When you bought the vehicle you got a loan. The security for the loan is the vehicle. Under the contract if there is a default in the payments the lender has the right to take possession of the vehicle.

When financing fails on a purchase

Buyers often get what is called seller-assisted financing. Frequently they do so without ever knowing what they are getting or what they have agreed to. Then weeks or even months after the purchase the dealer calls telling them the financing did not go through and they have to bring back the vehicle.

California Repossession Law

As a general rule, you have far more rights with a sale than with a lease.

Automobile Repossession 1099-C, California

In California after your car or truck was sold, the finance company charged you a deficiency on the balance of the contract. They also reported the deficiency to the Credit Reporting Agencies. To be entitled to a deficiency, they must send a proper Notice. Years later, when they cancel that deficiency or debt, they may notify the IRS of the cancellation and it gets reported as “income” to you. If the notice they sent you after the repossession was defective, then you never owed the deficiency and there was no debt to cancel. There should have been no report of "income" to the IRS, because you never owed it. 

What happens after the car is taken?

California law requires that the consumer be sent a notice either by personal service or by certified mail. It must be sent or delivered to the consumer within 60 days of the repossession.

What is a deficiency judgement?

After repossessing your car in California, the auto finance company is required to send you a letter, called a Notice. If you have received a letter from your Finance Company following a repossession, fax it to us at 858/270-7710, along with your phone number, and we will review it at no charge.

Finance Company Repossessions California

Usually the Finance Company will sell the vehicle at auction for a fraction of what you owe on it. They will then sue you for the balance.

The Automobile Sales Finance Act...

...requires the Finance Company to do the repossession legally. If you have received a letter from your Finance Company after a repossession, fax it to us at 858/270-7710 or you can This email address is being protected from spambots. You need JavaScript enabled to view it., along with your phone number, and we will review it at no charge. Or contact us here with your repossession questions.

San Diego Lemon Law Center | The Law Office of Michael E. Lindsey
Tel: (858) 270-7000 Fax: (858) 270-7710 | 4455 Morena Blvd., Ste. 207 San Diego, CA, 92117 (see map)

General Information Only

The information in the San Diego Lemon Law Center pages is for general information only and is not intended to be taken as legal advice. If you have a specific legal question or problem, please feel free to contact us or you should promptly consult with an Attorney handling such matters in your area for advice.