Can my lender take my car if I miss a payment?

If you borrowed money from a bank or lender to pay for your car, you “attached” your car to the loan. Look at your loan agreement to see when a lender can take your car. You probably agreed that the lender can take the car if you do not make payments.

If the lender takes your car because you owe them money, or you broke the terms of your agreement, it is “repossession.” The lender has the right to sell your car to get back some or all the money you owe them.¹

What is “repossession”?

If you miss loan payments, the lender can take your car and sell it to pay back the rest of your loan. The lender can only take your car if you sign an agreement, like a loan agreement, that says they can take your car if you miss payments. 

The lender must repossess “peacefully.” They cannot:

• Break into your garage,
• Go into your backyard to take your car,
• Threaten you, or
• Take your car if you tell them not to.

 Your lender can take your car if:

• They can see your car in your driveway from the street, or
• The car is parked on the street.

 The lender must tell the police in your town that they repossessed your car. If your car is missing, ask the police if the lender already reported that they repossessed it.