If you took out a loan to buy a car, or if you lease a car, the person or company who gave you the loan, called the creditor, has a right to take the car if you do not make a payment. When the creditor takes back the car because you didn't make payments, this is called repossession. 

After repossessing your car, the creditor must send you a Notice of Redemption and an Affidavit of Defense. The Notice of Redemption tells you whether the creditor will keep or sell your car. It also tells you that you have a right to buy back your car. The Affidavit of Defense will let you explain why you did not make payments on the car.

Note: Effective January 1, 2024, if a licensed repossession agency thinks a vehicle used as collateral has personal information in it, they must use an approved electronic method to delete that information before releasing the vehicle. Personal information means any data connected to the vehicle's owner, driver, or passengers, which the vehicle has collected and stored. This includes things like biometric data, contact info, addresses, phone numbers, digital subscriptions, and more.

After the car is sold

Even if your car is sold, you may still owe money to the creditor. In most cases, selling your car doesn't cover the loan. The creditor may try to collect the difference from you by suing you. 

Example: If you owe the creditor $3,000 and the car was sold for $2,000, the creditor may try to collect the remaining balance of $1,000 from you. 

In rare cases, a car is sold for a value higher than the money owed to the creditor. The money left over from the car's sale is a surplus. You have the right to collect the surplus.

Co-signers

A co-signer is responsible for late payments on a loan or lease for a car that is repossessed.

Once the car is repossessed, the creditor will send the co-signer a notice that explains how to get the car back. In order to get the car back, the rest of the debt will have to be paid.