Repo the Right Way
Automotive Dealership Law on June 29, 2014
Generally, you, the creditor have legal authority to seize a vehicle upon a default as provided in your contract with the consumer. Once default occurs you, as the creditor, may repossess the consumer’s car at any time without prior notice and may go onto their property to do so. You may not commit a “breach of the peace” by using physical force or threats of force. Your dealership documents will define what constitutes default. However, if you agree to accept late payment or agree to any alteration of the contract, the terms of default under the original contract may no longer apply.
Once you have repossessed a consumer vehicle, you must provide notice about what will happen next. Regardless of what you decide to do with the vehicle, you do not have a right to keep or sell any personal property found inside. Most improvements made to the car, such as a stereo or luggage rack are not considered to be personal property. After default, repossession and notification to the consumer, you have the right to dispose of the vehicle in a commercially reasonable manner. Many times when the vehicle is sold, there will be a deficiency between what the consumer owes on the vehicle and what you receive when reselling the vehicle. After sale, you may seek a deficiency judgment against the consumer. You must also account for any surplus from the disposition.
Florida Statute Section 679.614, sets forth form language that provides sufficient information to comply with the statute. At any time prior to the disposition of the vehicle, a consumer may have a right to redeem the vehicle by submitting full payment of the amount owed and all reasonable expenses incurred by you. If you dispose of the vehicle by private sale you must notify the consumer that, “We will sell (describe collateral) at a private sale sometime after (date).” If you choose to dispose of the vehicle by public sale you must notify the consumer that, “We will sell (describe collateral) at public sale. A sale could include a lease or license. The sale will be held as follows: Date: Time: Place: You may attend the sale and bring bidders if you want.” One of the most important things about repossession and securing your rights under a Buyer’s Order and/or Retail Installment Sales Contract is that you follow the specific requirements of reasonable notice to the consumer regarding what you plan to do with the vehicle. When taking a self-help approach in securing your rights follow the requirements of the statute or contact us for the appropriate language and notification form. Inaccurate notification to the consumer may result in legal action against you.
(3) telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.
- describe debtor and secured party;
- describe collateral being sold (must include VIN);
- state public or private sale;
- state that debtor is entitled to an accounting of the unpaid indebtedness and the charge, if any, for that accounting; and
- state time and place of public disposition or time after which disposition by private sale is to be made.
- description of any liability for a deficiency of the customer to whom the notification is sent;
- telephone number from which the amount that must be paid to the secured party to redeem the automobile is available; and
- telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.