Repossession Laws in Oregon
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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 Oregon's Repossession Laws and what you should know if you've fallen behind on car payments.
Written by Upsolve Team.
Updated March 22, 2024
Coming out of the grocery store and finding your car is missing is one of the worst feelings a person can have. You may wonder if your car was stolen, but if you were behind on your loan payments, it may have been repossessed by your lender. A creditor has the right to repossess your car if it loaned you the money to purchase or if you put the car up as collateral for another loan.
Any violation of your loan contract can lead to repossession. This includes letting your insurance lapse. But the most common reason cars are repossessed is because the borrower gets behind on the car payments. This article will cover information about car repossessions in Oregon.
How Many Payments Can I Miss Without Risking a Repossession in Oregon?
In Oregon, state law allows a borrower's car to be repossessed as soon as they're in default on their car loan. The borrower's car loan contract will spell out what constitutes a default. It could be as little as a single missed payment or being a day late on the payment.
Will I Be Notified Before the Repossession? How?
Vehicle repossession laws in Oregon don't require lenders to give borrowers any advanced notice of an auto repossession. The lender only needs to provide written notice after your motor vehicle is repossessed.
How Can I Prevent a Repossession?
In Oregon, a court might order a repossessed car to be turned back over to you if you have made a partial payment and the creditor has a history of accepting partial payments. The lender would have to reject your late payment if it's going to repossess.
If you have a reputable lender, it's a good idea to contact them if you won't be able to make a payment. They may have programs or options to help get you back on track. If your lender has a bad reputation, do the best you can to make the payments while trying to refinance with a reputable lender. You need a lender that will work with you through difficult times instead of repossessing and asking questions later.
What Can Repo Companies in Oregon Do?
A repo company can't breach the peace when repossessing a car in Oregon. This means if you catch them during the auto repossession and object, they're supposed to stop. If they don’t, You can file a complaint against the repo company through the Department of Consumer and Business Services. This is the state agency that licenses repossession agents. They’re required to be licensed as a debt collector with the state.
Even if you’re unhappy with the repo or don’t agree with it, don’t breach the peace yourself. Not only could you get hurt, but you could also end up with criminal charges.
Oregon repossession laws don't allow a repo man to repossess a car that's behind a locked gate or in your garage. That's also breaching the peace. But if a repo company can't get to your vehicle because you keep the car in your garage, it can get a court order. With a court order, law enforcement can assist the repo company in recovering the motor vehicle. Usually, the repo company will simply follow you to the grocery store or to work to repossess the car.
What About the Personal Property in My Car?
In Oregon, the repo company must return any personal property that was in your car at the time of the repossession. But they probably don't have to return any item that became part of the car such as a car stereo you installed. If the repo company doesn't return your items, you can sue them for the cost of replacement and any other damages you suffer due to the loss of your personal belongings. That said, it’s best to avoid this hassle by removing any personal items from your car if you know you’re at risk of having it repossessed.
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What Happens After a Repossession in Oregon?
You must get a notice after the car repossession informing you of:
The name, address, and phone number of your lender.
A description of your motor vehicle.
Information about how the vehicle will be sold (usually at a public auction or a private sale).
The date, time, and place of the intended sale.
A statement that you’re entitled to a statement of your payments and charges that shows how the lender arrived at your current loan balance. This must also say how much, if any, the lender will charge you for this document.
A phone number you can call to find out how much you'll have to pay to redeem (get back) the vehicle.
That you may be held liable for a deficiency.
A telephone number or address where you can get more information about the sale of the vehicle and what you may owe.
This notice must be sent after you default and at least 15 days before the sale. Though it can be sent as soon as you default, the lender will usually wait until after the vehicle repossession to send it.
The car will then be sold at a public auction or private sale. The sale price and every other aspect of the sale must be "commercially reasonable." Commercially reasonable means every part of the sale has been handled in good faith according to commonly accepted commercial practices. If some aspect of the sale isn't commercially reasonable you can sue the creditor. For example, if the proceeds of the sale of your car brought only $100 and your car had a bluebook market value of $10,000, it's a good idea to seek legal advice.
Do I Still Owe After a Repossession in Oregon?
If the proceeds of the vehicle sale aren't enough to pay off your loan balance plus the cost of the repossession, you'll have a deficiency balance. For example, if you owe $5,000 on the car loan plus $1,000 for the repossession and your car sells for $4,000, you'll have a $2,000 deficiency balance.
Had the vehicle only sold for $100 when it should have brought closer to $10,000 you would have a $6,000 deficiency when you should have had a surplus. If there's a surplus, the lender must pay you that money. This is why it's important to contact an attorney if you think the sale wasn't done in a commercially reasonable manner. It's also why you should go to the sale and witness it for yourself. If you could bid $101 and buy the car at the auction, you’d still owe the lender money for the car loan, but they’d no longer have a security interest in the car. That means they couldn't repossess it again unless they get a judgment for the deficiency balance.
Even if you'll have a deficiency balance when a vehicle is sold, you still want to make sure it's commercially reasonable. See the first example where the amount owed was $5,000 plus $1,000 in repossession costs and your car sells for $4,000. If $4,000 was the value of the car for an auction sale according to a bluebook, but it sold for $100 instead of $4,000. You'll want to bring this up as a defense to a deficiency lawsuit. Instead of the commercially reasonable $2,000 deficiency, the lender will try to get a $5,900 deficiency. You don't want that.
In the first example above, had you voluntarily turned the car in, you wouldn't have been charged the $1,000 in repossession fees. You would still have a deficiency balance, but the balance would only be $1,000 instead of $2,000. This is important since lenders often sue for deficiency balances and win deficiency judgments. At that point, they can garnish your paycheck or seize your bank accounts.
Can I Get My Car Back After a Repossession in Oregon?
You have a right to redeem, or get back, a repossessed car in Oregon. This means if you pay the full amount due plus any cost associated with collections such as attorney fees and the costs of repossession, you can get the car back. You can do this any time before the car is sold. Since the car can't be sold until 15 days after the lender has sent you a notice of the planned sale, you have a little time. You may be able to find another lender that will lend you the money to redeem the vehicle.
You may be able to get the repossessed car back if you file bankruptcy before it's sold. In a Chapter 13 bankruptcy, the terms of the auto loan could be changed by court order making the car more affordable. Consult with an experienced Oregon bankruptcy attorney to see if this is a good option for you.
Where Can I Find More Information About Repossession Laws in Oregon?
The following links can provide information and assistance with repossessions in Oregon:
