Repossession Laws in Florida

When you buy a car with a loan and fail to make the payments, the lender can take the car back through a process called repossession. The lender has the legal right to repossess the car because auto loans are secured debt. The car is what “secures” the loan. So if you don’t make your loan payments, the lender can take the car back and sell it to recoup their loss. 

Repossession laws vary from state to state. Florida repossession laws are favorable for lenders that want to repossess a car after a borrower defaults. That said, you as a borrower still have rights in the repossession process, too.

How Many Payments Can I Miss Without Risking a Repossession in Florida?

Legally, Florida statutes allow lenders to repossess a car as soon as the borrower misses one payment. But you should review your auto loan contract to see what your lender considers default. Some lenders provide a grace period, which gives you a few extra days to pay after the due date without facing late fees or other penalties.

Will I Be Notified Before the Repossession? How?

Under Florida law, your lender must give you an opportunity to meet at a mutually agreed-upon place to surrender the car and remove your belongings before the lender repossesses the car. If you don’t do this, lenders aren’t required to give you any further notice before the repossession. Some lenders will give you notice even though it’s not legally required. Your loan contract will likely address how you will receive this notice. 

How Can I Prevent a Repossession?

You can proactively prevent repossession by making sure the car you buy has an affordable payment. Also, when it comes to motor vehicles, it is best to keep a car as long as possible. Trading too often can lead to higher payments and owing more than the vehicle is worth. That said, we all face unforeseen financial challenges at times. If this happens, you can prevent repossession by:

• Speaking with your lender: Your lender may be willing to renegotiate the terms of your loan agreement and create a new payment plan that you can afford. This will prevent the need to repossess your car and help protect your credit score. 

• Paying the amount owed: If you’re able to come up with the cash to pay your missed payments, along with any fees incurred by the lender, you may be able to reinstate your loan and prevent repossession.

• Filing Bankruptcy: If your missed car payments are just one of many financial struggles, you may want to consider filing bankruptcy. In some cases, you can keep your car.

Should I Voluntarily Repossess When I Know I Can’t Make the Payments?

When you go through a rough period and realize you won’t be able to make your car payments when they’re due, you may want to consider a voluntary repossession. This means that you give the car back to the lender or dealership where it was purchased to avoid having it repossessed. Voluntary repossession has several benefits.

• It allows you to control the timing of the repossession.

• You won’t have to pay the lender’s repossession costs.

• You can maintain your privacy as neighbors often notice when a car is repossessed.

• It’s often better for your credit score and credit report than an involuntary repossession.

What Can Repo Companies in Florida Do?

 In the state of Florida, repossession companies are required to be trained and maintain a license to perform repossessions. If you have any doubts about whether a repo company is legitimate, you can review their licensing information with the state.

Florida law allows recovery agents — commonly called repo men or repossession agents — to enter your property and take your car without any notice as long as they can do so without a breach of the peace. Though repossession agents can come onto your property, they aren’t allowed to break any locks or enter your home without permission to reach the vehicle. They also can’t use physical force or trickery of any kind. To avoid breaching the peace, most repo companies will try to take your car without confronting you. Be aware that you also aren’t allowed to be confrontational with the repo men or prevent them from doing their job. 

What About the Personal Property in My Car?

If you know there’s a chance your car may be repossessed, you should remove all your personal belongings. If you haven’t done this and your car was repossessed with your personal items inside, Florida law is clear that a creditor may not keep or sell them. They must inventory your personal items and keep them for 45 days. They also have to give you instructions on how and where to recover your belongings. 

If you don’t retrieve your possessions as instructed, the creditor may dispose of them. Also, these rules don’t apply to most upgrades made to the car, such as running boards and sound systems. 

What Happens After a Repossession in Florida?

Once a creditor repossesses your car in Florida, they may either keep the vehicle or sell it at a public auction or private sale. The creditor must give you written notice of what they decide to do with the car. If they choose to sell the car at a public auction, the creditor must send you a written notice at least 10 days before the sale that includes the date, time, and place of the sale.

Should I Demand the Car Be Sold if the Creditor Decides To Keep It?

You have a right to demand that the creditor sell the car rather than keep it. It’s in your best interest to do this when the car is worth more than what you still owe on the loan. Even so, the car may sell for less than the balance you owe (which includes past-due payments, late fees, and the lender’s repossession costs). When this happens, the creditor can sue you for the difference between what you owed and what the car sold for at auction. This is called the deficiency balance. 

For example, say you owe $12,000 on a motor vehicle, and it sells for $9,000. In this case, the creditor may sue you for the $3,000 difference. Creditors can only try to collect the deficiency balance if the unpaid loan balance at the time you defaulted was more than $2,000. You’ll receive notice of a court date if the creditor decides to sue for the deficiency balance. If the creditor wins in court and you’re unable to pay the full amount owed, the creditor may get a court order called a deficiency judgment. This allows them to garnish your wages or bank account. 

What if My Car Sells for Much Less Than It’s Worth?

Florida state law requires that repossessed cars be sold in a commercially reasonable manner. If your car sells for less than its fair market value, the courts may consider the sale to be unreasonable. If your car sells for less than it’s worth, you may be able to:

• Sue the creditor for damages.

• Re-purchase the vehicle. To do so, you must be able to pay the full amount you owe on the loan (not just the missed payments) plus the lender’s repossession costs.

• Reinstate the loan by paying the lender the amount that is past due (not the entire loan amount) plus any costs the lender has incurred.

• Use the fact that the car sold for less than fair market value as a defense against a deficiency judgment if the lender sues you to collect the deficiency.

Do I Still Owe After a Repossession in Florida?

Having your vehicle repossessed doesn’t mean you’re completely off the hook and don’t have to worry about the car loan anymore. If the sale proceeds aren’t enough to cover what you owed on the loan as well as your lender’s costs to repossess the vehicle, you may be left with a deficiency balance. 

Voluntary repossession will help you to avoid these additional fees and costs. In a voluntary repossession, you voluntarily surrender your vehicle to the lender or dealership to avoid having it repossessed. This also allows you to avoid paying the fees of repossession, though you may still owe money on the loan.

Can I Get My Car Back After a Repossession in Florida?

You can recover a repossessed vehicle in Florida. The two most popular ways to get your back after repossession are:

• Bankruptcy: Filing bankruptcy may give you the option to affirm your loan and avoid repossession.

• Redemption: If you have money at your disposal, you may be able to contact the lender and negotiate a lump-sum payment for the return of your vehicle

Where Can I Find More Information About Repossession Laws in Florida?

• The Florida Attorney General’s office provides information on how to Protect Yourself in an Automobile Repossession.

• Jacksonville Area Legal Aid has information on car repossessions.

• The Federal Trade Commission has information on how to deal with being behind on car payments because of the coronavirus.

• Community Legal Services of Mid-Florida has repossession and other consumer protection information as well as resources for low-income Floridians to get legal assistance.