Repossession Laws in Colorado

When you finance a vehicle, you sign a security agreement. In this agreement, your lender agrees that you can take the car home and drive it even though it isn’t paid for. In exchange, you agree that your lender can repossess the car if you don’t pay. Repossession is when your lender takes the car back after you default on the loan. This guide explains how the repossession process works in Colorado and what you can do if you’re facing repossession in the Centennial State.

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

In most cases, you can miss one loan payment before being subject to vehicle repossession. Under Colorado law, you must be in default on your loan agreement for at least 10 days before your lender can send you a default notice. After your lender sends a notice of default, you have an additional 20 days to bring your loan current before your lender can repossess your car. What counts as a default depends on your contract terms. It could be a late or partial loan payment or a missed insurance payment.

Will I Be Notified Before the Repossession? How?

When you’ve been in default on your car loan for 10 days or longer, your lender sends you a notice of default. The 10 days start with the due date of the late payment. The notice of default must inform you of your right to cure the default by catching up on your payments. This notice is sometimes called a right to cure notice. You must cure the default within 20 days after the date of the notice. If you don’t catch up on your car payments, your lender can repossess your car on the 21st day.

Under Colorado law, borrowers are only entitled to one right to cure notice every 12 months. If you’ve already received a notice of default and cured that default within the past 12 months, and then you miss another payment, your lender doesn’t have to send you another notice. In that situation, your lender can repossess your car immediately after the missed payment with no additional notice to you.

How Can I Prevent a Repossession?

In Colorado, you can prevent a car repossession by catching up on your loan payments within 20 days after receiving a notice of default from your lender. You only get this opportunity to catch up once every 12 months, though, so it’s best to avoid default if possible. If you know you’re going to be late or short on an upcoming payment, contact your lender and explain your situation. Ask what you can do to avoid defaulting on your loan. In many cases, your lender can work with you to find a solution. There are usually more solutions available to you before your loan is in default, so it helps to be proactive.

What Can Repo Companies in Colorado Do? 

A Colorado repossession agent can take your car from a public place or private property, but they can’t breach the peace to repossess your car. “Breach of the peace” is a legal term that depends on the circumstances, but some things are commonly considered breaching the peace. For example:

• A repo agent can’t create a disturbance by making threats, using violence, or making unreasonable noise.

• A repo agent can’t damage property or use force. This means they can’t force you out of your vehicle. It also means they can’t cut a lock or use force to enter a locked gate or garage. But they can enter your driveway, open garage, or any other area of private property that they can access without using force.

• A repo agent can’t misrepresent their identity or trick you into leaving your car somewhere. Repo companies must follow the rules in the Fair Debt Collection Practices Act.

• Your lender can use a “kill switch” to remotely disable your car, but they can’t do it while you’re driving or pulled over on the side of the road. Most Colorado courts say that your car must be parked on your property for a creditor to use a kill switch.

You also aren’t allowed to breach the peace or break any other laws to try to stop a repo man from taking your vehicle. If you do, you could face criminal charges. The repo company can come back with a court order to repossess your car. You'll be responsible for the cost of getting the order.

Repossession companies in the state of Colorado must be bonded and registered with the Colorado attorney general’s office. You can verify that a repo company is registered or file a complaint against a repo agent through the attorney general’s office. The repo company must notify local law enforcement about the repossession within an hour afterward.

What About the Personal Property in My Car? 

If you’re at risk for auto repossession, take your personal belongings out of your car now, so you won’t have to deal with getting them back after a repossession. If your car has already been repossessed with your personal property inside, you’re entitled to get this property back. Either during the repossession or within 10 days afterward, the repo company must give you their contact information and instructions for retrieving your belongings. 

Under Colorado law, the repo company can remove your property from your repossessed vehicle and store it. They can charge you for removing and storing your things. You’ll have to pay these fees to get your property back. Property that’s attached to the vehicle, such as speakers or a navigation system, will stay with the car. Also, any property in your vehicle that’s had its serial number removed or altered won’t be returned to you. If you don’t pay the fees and pick up your property within 30 days after getting notice from the repo company, they can sell or dispose of it. 

What Happens After a Repossession in Colorado? 

After a repossession, your lender can sell your car at a private sale or a public auction. They can also choose to keep or lease your car. Your lender must send you a written notice of intent telling you what they intend to do with your car. There’s no time limit under Colorado repossession law except that the lender’s actions must be commercially reasonable. What counts as commercially reasonable must be decided by a judge. You can’t be charged storage fees for longer than 120 days, though.

If your lender intends to sell your car at a public auction, the notice of intent must include the sale date, time, and location. It must also include a phone number and address where you can request more information about the sale. You can attend the auction and bid on your car. If your lender intends to keep or lease your car or sell it at a private sale, they don’t have to provide a sale date, but they must give you a cutoff date. They can’t sell or do anything else with the car until after the cutoff date.

Colorado law says that you’re entitled to reasonable notice before the sale date or cutoff date. Again, what counts as reasonable must be decided by a judge. In general, 10 days' notice is the absolute minimum notice allowed. But 10 days’ notice might not be enough to be considered reasonable in some situations.

Whatever your lender does with your car, they must make a reasonable effort to get a fair price under the circumstances. This doesn’t mean they have to get the market value if a judge could find the sale was reasonable. Whatever amount your lender receives will be applied to your debt. A higher sale price means more of your loan gets paid off. If the sale proceeds aren’t enough to pay everything you owe, the remaining debt is called a deficiency balance.

Do I Still Owe After a Repossession in Colorado? 

Repossessing and selling a motor vehicle can be expensive. Any costs your lender incurred throughout the repossession process — such as towing and storage costs, administrative charges, and legal fees — will be added to your loan balance. Your lender must provide an itemized accounting of these charges if you request one. In many cases, after these expenses are added, you’re upside-down on the loan, meaning you owe more than the car is worth. 

Because the sale price after a repossession is usually less than market value, you’ll probably owe a deficiency balance on your car loan. You’re still responsible for paying this balance even though you don’t have the car anymore. Your lender can sue you for the deficiency if you don’t pay. If you’re at risk for repossession, you can avoid having repo costs added to your debt by voluntarily turning your car over to your lender. This can keep your deficiency balance more manageable.

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

To get your car back after it’s been repossessed, you must redeem your auto loan. Redeeming the loan means paying your entire loan debt, plus any interest and late fees. Paying all the past-due payments and charges isn’t enough to redeem the loan. In addition to your loan balance, you must also pay any repossession-related expenses. 

In the notice of intent from your lender, they must provide a phone number and mailing address where you can request the exact amount you must pay to redeem your vehicle. They must give you an itemized accounting of this amount if you ask for it. To redeem your car, you must pay the full amount before the sale date or cutoff date in the notice of intent.

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

• Visit the Colorado attorney general’s office to verify that a repo company is on the list of currently bonded repossessors or to file a complaint against a repossession company

• Colorado Consumer Protection Act

• Colorado Legal Help Center

• Colorado Legal Services has a helpful Consumer Rights Packet