Repossession Laws in New Mexico

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

In New Mexico, missing just one car payment can put you in default, which means your lender may legally start the repossession process. Default typically happens when you don’t make a payment on time, but it can also include other violations of your loan agreement — like not keeping required insurance on the car.

Some lenders offer a brief grace period, but that doesn't always stop them from considering the loan in default. 

🔎 The exact rules depend on your loan contract, so it’s important to read it carefully. It should explain what triggers default and when your lender can repossess your vehicle.

Will I Be Notified Before the Repossession? How?

Lenders in New Mexico don’t have to give you a warning before repossessing your car. Some lenders might reach out first, but they’re not legally required to. Repossession can happen without notice, even overnight or while you’re at work.

How Can I Prevent a Repossession?

If you're struggling to make a car payment or think you might fall behind, reach out to your lender as soon as possible. It might feel uncomfortable, but contacting them early often gives you more options. 

💡 Some lenders may be willing to offer a short extension or let you move a payment to the end of the loan, especially if you've been on time in the past.

Once you’ve missed a payment, the situation changes. The lender isn’t required to accept a late or partial payment. In some cases, they may even demand the full remaining loan balance to avoid repossession. 

If you know you can’t afford to catch up, you might consider voluntary repossession. This means you return the car to the lender yourself instead of waiting for them to take it. Voluntary repossession doesn’t erase the debt, but it can reduce extra fees and help you avoid the stress of a surprise repossession.

✋ Filing for Chapter 7 bankruptcy can also temporarily stop a repossession. When you file, an automatic stay goes into effect immediately. This legal protection halts most collection efforts, including repossession. Bankruptcy erases most consumer debts, which can help you reset and move forward. Some people are able to keep their car through the process.

✨ If you're thinking about bankruptcy as a way to stop repossession or manage your debt, Upsolve may be able to help. Take this two-minute screener to see if you qualify to use our free online filing tool.

What Can Repo Companies in New Mexico Do?

In New Mexico, repo agents can take your car from just about anywhere that’s open and easy to access — like a public street, a parking lot, or even your driveway. But they’re not allowed to break the law or cause a disturbance, which is called breaching the peace.

Breaching the peace can also include things like:

• Entering a closed garage or breaking a locked gate

• Using or threatening force

• Damaging property

You have the right to object to a repossession. If you speak up before your car is hooked up to the tow truck, the repo agent may have to leave and try again later or get a court order. If you do object, stay calm and don’t get physical or interfere with equipment. Also know that this can increase the costs of repossession, which you may have to pay later if the repo is successful.

Be thoughtful about where you keep your car if you're behind on payments. Keeping it in your own closed garage is legal, but trying to hide it in someone else’s garage just to avoid repossession could be against the law.

🪪 Only licensed repossession companies are allowed to take vehicles in New Mexico. If you're not sure whether the company that took your car was properly licensed, you can reach out to the New Mexico Financial Institutions Division to check.

Vehicles Can’t Be Repossessed From Tribal Lands Unless Tribal Law Allows

If your vehicle is located on tribal land in New Mexico, state repossession laws don’t apply. Instead, tribal law decides whether a lender can take your car. 

Some tribes don’t allow repossession unless the owner gives permission or the lender gets an order from the tribal court. But if your car leaves the reservation, it may be repossessed.

There Are Limits on Repossessing Vehicles Purchased by Service Members

Service members have special protections under federal law. If you bought your vehicle before entering active military service, the Servicemembers Civil Relief Act (SCRA) says your lender can’t repossess it during your service unless they get a court order first. 

What About the Personal Property in My Car?

If you think your car might be repossessed, try not to leave personal items in it. You’re allowed to get your belongings back after a repo, but it can be a hassle. It can also be hard to prove something was missing if anything gets lost.

In New Mexico, once the towing company confirms who owns the vehicle, they have two business days to send a notice (usually by certified mail) with details about where your car is being stored. Double-check that your address is up to date with your lender and the DMV to ensure you get this notice.

The towing company must take reasonable care of any personal items left in the car. They also have to let you get your belongings free of charge, as long as you go during normal business hours and show proof that you own the car.

If your car has already been repossessed and you haven’t heard from the towing company, contact them as soon as you can to arrange pickup of your belongings. If you don’t know which company took your car, your lender should be able to tell you.

What Happens After a Repossession in New Mexico?

After your car is repossessed, your lender will sell it at either a public auction or a private sale. Before the sale, they must send you a written notice far enough in advance for you to take action — typically at least 10 days beforehand.

📄 The notice must include:

• Whether the sale is public or private

• How much you owe

• How to get your car back

• Basic information about the vehicle

If the sale is public, the notice must list the date, time, and location. You or someone you know can attend the auction and try to buy the car. For private sales, the notice must tell you the earliest possible sale date.

Lenders must sell repossessed vehicles in a commercially reasonable way. This means making a fair effort to advertise and get a reasonable price, though this isn’t the same as the full market value. 

Do I Still Owe After a Repossession in New Mexico?

After your lender repossesses and sells your car, you may still owe money. This is called a deficiency balance. 

The sale proceeds are used to pay:

• Repossession costs (like towing and storage)

• Sale expenses (like advertising or auction fees)

• Your remaining loan balance

If the sale doesn’t cover everything, you’re still on the hook for what’s left.

Your lender must send you a written explanation showing how they calculated the deficiency. This breakdown includes the resale price, the costs they charged, and your unpaid loan amount. 

🗓️ If they don’t send this automatically, you can request it, and they must provide it within 14 days.

If you don’t pay the deficiency, your lender can sue you to collect it. If they win in court, they may be able to garnish your wages or take money from your bank account. They might also sell the debt to a collection agency, which could continue trying to collect the amount you owe.

✨ If you’re dealing with a deficiency balance and other unmanageable debt, Chapter 7 bankruptcy may be able to help you get a fresh start. You can see if you’re eligible to use Upsolve’s free filing tool in just two minutes.

Can I Get My Car Back After a Repossession in New Mexico?

In most cases, the only way to get your car back after a repossession is by redeeming it. This means paying the full remaining balance on your loan, plus all extra costs related to the repossession. 

💰 Your lender must send you a written notice after the repossession that explains how much you owe and how you can redeem your car. For many people, this can be tough to do because it usually requires paying everything in one lump sum. That’s a big challenge if you were already struggling to make your regular payments.

You have to redeem the car before the lender sells it. Once it’s sold, you likely won’t have a way to get it back.

If you’re not sure what to do next, consider setting up a free consultation with a bankruptcy attorney to talk through your options.

Where Can I Find More Information About Repossession Laws in New Mexico?

If you're looking for help understanding your rights or dealing with a car repossession, these resources in New Mexico offer free legal information or support:

• New Mexico Legal Aid provides free legal advice or representation if you qualify for services and if it accepts your case.

• Law Help New Mexico offers free legal information and resources for low-income people dealing with civil legal issues.

• New Mexico residents who are age 55 or older can get free legal advice from the State Bar of New Mexico’s Legal Resources for the Elderly Program.

New Mexico’s laws on default and vehicle repossession are found in the state’s version of the Uniform Commercial Code, specifically Chapter 55, Article 9, Part 6 of the New Mexico Statutes.