Repossession Laws in Arizona

What Is Repossession?

Repossession is when a lender takes back property — most commonly, a car — because the borrower hasn't kept up with the loan agreement. This usually happens after missed payments or other contract violations.

Most car loans are secured loans, which means the car acts as collateral for the loan. If you stop paying, the lender has the right to repossess the car without going to court, depending on state laws.

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

In Arizona, a lender can repossess your car as soon as you're in default on the loan. This usually means missing a payment, but default can also happen for other reasons, too, like not keeping up with required car insurance or breaking other rules in your loan contract.

You don’t always have to miss several payments before repossession becomes a risk. To know exactly what counts as a default, check your loan agreement.

Will I Be Notified Before the Repossession?

In Arizona, lenders don’t have to give you a warning before they repossess your car. They might send a late payment notice or reminder, but they aren’t required to by law.

Arizona allows what’s called “self-help” repossession. That means the lender can take back your car without going to court first, as long as they don’t break any laws or cause a disturbance when doing it.

How Can I Prevent a Repossession?

To prevent your car from being repossessed, you'll need to take action. You can:

• Catch up on missed payments, if you can. Check your loan contract or any notices from your lender to see how much time you have. If possible, make the payment by phone to avoid delays with mail or online systems.

• Contact your loan servicer. If you're struggling financially and you can't afford your car payment, call your lender as soon as possible. They may be able to offer:

  • A short-term forbearance to pause payments

  • A payment plan to catch up over time

  • A change to your loan terms or monthly payment amount

• Explore bankruptcy if you're overwhelmed by debt.

  • Chapter 7 bankruptcy won’t help catch up on missed car payments, but it does trigger an automatic stay, which temporarily stops repossession.

  • Chapter 13 bankruptcy allows you to set up a repayment plan through the court, which can include past-due car payments.

If you're considering bankruptcy, it may help to set up a free consultation with a bankruptcy attorney to talk through your specific options.

What Can Repo Companies in Arizona Do?

In Arizona, repossession companies don’t need a special license to take back vehicles, and lenders aren’t required to go through the courts. As long as you’ve defaulted on your loan, a repo agent can legally take your car from a public street or even your driveway without warning.

That said, they can’t:

• Breach the peace during the repossession. This means they aren’t allowed to use force, threaten you, or create a scene

• Break into a locked garage or continue if you clearly ask them to leave your private property. To avoid conflict, many repossessions happen at night while the car is unattended.

Even if you believe the repossession is unfair or unlawful, it’s important not to block the tow truck or confront the repo agent. Trying to stop the process physically could lead to serious legal trouble or even criminal charges. If you think your rights were violated, you can bring it up in court or talk to a legal aid organization for guidance.

What About the Personal Property in My Car? 

A repo company can take your car, but they can’t legally keep or sell any personal belongings you left inside it. If your car has already been repossessed, check your most recent notice from the lender and call the number listed to ask how to get your items back.

If you think repossession might happen soon, it’s a good idea to remove all your personal items from the car ahead of time. That way, you won’t have to go through the extra stress of trying to recover them later.

What Happens After a Repossession in Arizona?

After the lender repossesses your car, it will try to sell it to recoup its costs. It can sell the car at a public auction or via a private sale. After the repossession, the lender must send you a written notice that tells you:

• The date and time the car will be sold at a public auction or the time after which a private sale will be made. 

• About your right to know how the sale proceeds get applied.

• Whether you’ll be liable for any unpaid balance after the sale.

• The contact phone numbers to inquire about how to redeem your car or get more information.

The law says that the lender must send this notice within a reasonable time after the repossession, but it doesn’t define what “reasonable” means.

Repo Auctions

If your lender sells the car at a public auction, you’re allowed to attend and even bid on it yourself. By law, the lender has to sell the car in a commercially reasonable way. That means they can’t sell it for far less than what similar cars are worth in the regular market.

The money from the sale is used to pay off your loan, but it doesn't all go straight to the balance. First, the lender uses the sale proceeds to cover repossession, towing, and storage costs. Whatever is left goes toward your remaining loan balance. If there’s still money left over after that, it goes to any secondary lenders and then to any co-signers.

In most cases, though, the sale won’t bring in enough to cover everything, especially after fees. That means you’ll likely still owe a remaining amount, called a deficiency balance.

In rare cases, there may be money left over. This is called a surplus. If there’s a surplus, you’re entitled to receive it. You should get a written explanation of these calculations before you get a surplus or a deficiency notice.

Do I Still Owe After a Repossession in Arizona? 

The lender will add its repossession costs plus any fees you owe under your loan contract to the total amount due on your loan. The sale will reduce this liability, but you’ll still owe the deficiency if the sale price is less than the total you owe.

If you voluntarily return your car to the creditor or lender, you might be able to reduce your deficiency balance somewhat by avoiding the lender’s costs of retaking the vehicle.

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

The lender’s pre-sale notice should provide information about how to redeem (get back) your car. The notice may provide a special phone number for getting redemption information. If so, you’ll want to call that number quickly to make sure you follow all necessary steps and don’t miss deadlines. The law allows you to redeem a repossessed car at any point before the lender has sold it or entered into a contract to sell it. The lender may require you to pay off the loan in full in addition to any late fees, the lender’s costs of repossession, and attorney’s fees.

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

• Repossession Laws In Arizona | Arizona Law Help

• Auto Repossessions information from Arizona Courts

• Vehicle Repossession Information from the Federal Trade Commission

• Arizona’s Repossession Law