Repossession Laws in Ohio
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Repossession is the process of taking back a car after the owner defaults on their auto loan. Each state has different laws and regulations that dictate every step of the repossession process from start to finish. This page will provide an overview of Ohio's Repossession Laws and what you should know if you've fallen behind on car payments.
Written by Upsolve Team.
Updated March 22, 2024
Most Ohioans need a car to get to work and the grocery store. That's why having your car repossessed can be a great hardship. Your lender can take back, or repossess, your car if you violate the terms of your loan contract. Usually, this means not making timely car payments. The lender has a legal right to do this because a car loan is a secured debt and the car is the collateral that backs up the loan. But you have rights during this process, too. This article explains how vehicle repossessions work in Ohio, how to prevent them, and how to get your car back if it’s been repossessed.
How Many Payments Can I Miss Without Risking a Repossession in Ohio?
In Ohio, borrowers can have their cars repossessed as soon as they default on their payment. Your loan agreement will spell out what counts as defaulting. Often, being a single day late on a payment is a default. Most agreements give borrowers a grace period, which is extra time to make your payment before the loan is considered late or in default. A common grace period is 10 days from the due date.
Will I Be Notified Before the Repossession? How?
The Ohio Revised Code doesn't require lenders to give you any notice before repossessing your car. The creditor can repossess the vehicle or hire a repo company to do it. Most lenders won't repossess if you're only a few days late, but legally they can.
How Can I Prevent a Repossession?
If temporary financial problems are preventing you from making your loan payment, the best way to prevent a car repossession is by contacting the car loan company. Many lenders and financing companies will work with you to help you get back on track.
Some creditors, especially predatory lenders, aren’t as willing to work with borrowers. How do you know if your loan is with a predatory lender? One sure sign is if you have an extremely high interest rate. If you have a bad lender, you may want to refinance your car loan as soon as you can.
What Can Repo Companies in Ohio Do?
Ohio repossession laws allow repo companies to take your car from public spaces such as parking lots. Your car can also be repossessed from your driveway and maybe even your carport. Repo agents can’t take your car from a closed garage or behind a locked gate at your house, though. Repossessing from these closed spaces is considered breaching the peace.
Ohio repossession laws forbid repossession agents from breaching the peace when they repossess your vehicle. This means they can’t use violence or threats of violence, and if you catch them in the process of repossession and you object, they're not supposed to continue. If they do, don’t use force to stop or you’ll be breaching the peace yourself. Make notes about the incident, take photos or video, if possible, and use this as evidence of a breach of the peace later in court.
What About the Personal Property in My Car?
If you know you're in danger of having your car repossessed, it’s best to remove any personal items you have in the car. If your car was repossessed with your personal property in it, you have a right to get it back. To do so, call the repo company. They're supposed to set a time for you to come and get your property.
It's important to realize this doesn't mean you can get things back that have become part of the vehicle. For example, if you had a new stereo installed in the vehicle, the repo company isn't required to disassemble the car to give your stereo back. If you have trouble with the repo company giving back items you know were in the car, contact the lender.
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What Happens After a Repossession in Ohio?
The Ohio Revised Code requires lenders to send you a notice before they can sell a repossessed vehicle. The Ohio Retail Installment Sale Act (RISA) covers sales unless they're financed by a bank or credit union. If your car is financed by a bank or credit union, the repossession is governed by Ohio's version of the Uniform Commercial Code (UCC).
Repossessions Governed by RISA
If your lender is a credit union or bank, it’ll be covered under Ohio’s UCC laws. If not, it’s covered under RISA. Lenders covered under RISA must send you a notice within five business days after the repossession. This notice tells you about your default and itemizes what you'll have to pay to cure it. Curing the default just means addressing the issue by, for example, making up missed payments.
The lender must also provide a notice of what they intend to do with the repossessed vehicle. This notice must be sent at least 10 days prior to your vehicle being sold at auction. These two notices (how to cure the default and how the collateral will be sold) can be sent together as one notice or separately. The notice of what the lender intends to do with the collateral must:
Name the debtor (you), the secured party (the lender), and the collateral (your car or truck)
State how the vehicle will be sold such as at an auction
State the date, time, and place of the intended sale of the vehicle plus the minimum amount the vehicle will be sold for
Include information about any deficiency you may owe after the vehicle is sold
List a phone number you can call to find out how to redeem or reinstate the vehicle or to get more information
Under RISA, the repossessed vehicle can only be sold at a public auction and lenders must advertise the auction in a local newspaper at least 10 days before the auction. The auction proceeds are used to pay off your loan balance plus the repossession costs. If the auction proceeds aren’t enough to pay the loan balance plus the collection costs, you’ll have a deficiency balance. If you were already upside-down on the loan, you’re likely to have to deficiency balance.
If the secured party (lender) doesn’t follow these requirements, it won't be able to recover a deficiency balance against you.
Repossessions Governed by the UCC
If your lender is a bank or credit union, the repossession is governed by the UCC. Lenders following the UCC must send you a notice after the repossession and at least 10 days prior to selling your car. The notice must:
Name the debtor (you), the secured party (the lender), and the collateral (your car or truck)
State how the vehicle will be sold — an auction or private sale
State the date, time, and place of the intended sale of the vehicle
Include information about any deficiency you may owe after the vehicle is sold
Include a phone number you can call to find out about redeeming the vehicle or to get additional information about the sale
Under the UCC, the lender can sell the car in a public auction or private sale. Most choose to sell at a public auction. Borrowers don’t have a right to reinstate their loans if the lender follows the UCC, but they may redeem the car. Last, under the UCC lenders aren’t required to set a minimum price at auction.
Do I Still Owe After a Repossession in Ohio?
After your car is repossessed and sold, the sale proceeds will go to cover the repo costs and then the remaining balance on your loan. Often this isn’t enough to cover everything. If the sale proceeds don’t cover the total remaining balance on the loan and the repo costs, you’ll have to pay the difference. This is called the deficiency balance. You can’t avoid it entirely, but you may be able to reduce how much you owe by doing a voluntary repossession. If you voluntarily surrender the vehicle to the lender or dealership, you won’t have to pay the costs of repossession.
Less commonly, if the sale proceeds cover the repo costs and the loan balance and there’s money left over, you’ll be entitled to that surplus.
Can I Get My Car Back After a Repossession in Ohio?
Under RISA, you have the right to cure your default. You must do so within 20 days of the repossession or 15 days after the required notice is sent, whichever is later. To cure the default and reinstate the loan, you’ll need to pay:
All payments due or past due, plus
Any unpaid late charges or deferred charges, plus
Up to $25 for the cost of the repossession, plus
Two installment loan payments to provide security against future defaults.
The repossession costs will probably be much more than $25. The balance above $25 will be added to your loan, and you’ll have to repay it over the loan term. You only have to pay $25 of the repossession costs to get the car back and reinstate the loan. You can only do this once for any car loan. If you default again, you don't have the right to reinstate.
If your loan is through a bank or credit union RISA doesn't apply, but Ohio's UCC does. Under the UCC, the bank or credit union must send you a notice of sale at least 10 days before they sell your collateral. Under the UCC, you don't have a right to reinstate the loan, but you do have a right to redeem. To redeem, you have to pay the entire loan balance plus the costs of repossession.
Where Can I Find More Information About Repossession Laws in Ohio?
If your vehicle has been repossessed, the following resources can provide legal advice or help or more information on how to deal with the repo:
