Repossession Laws in Idaho

Losing your car can be devastating. Having it taken away because of financial problems only makes it that much worse. When you fail to make one or more car loan payments, your lender can seize your car through a process called repossession.

Borrowers in Idaho have some protections under Idaho law. This article goes through the vehicle repossession process in Idaho and how you can protect your rights during the process.

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

When you sign an auto loan, you’ll have a secured debt. The car acts as collateral “securing” the loan, and the lender has what’s called a security interest in the loan. This gives the lender (the secured party) the legal right to seize the collateral (your car) if you default on the loan by missing a loan payment, paying late, or violating a term in the contract like not having the proper insurance coverage. 

Under the Idaho code on repossession, once you miss one payment, the creditor must send you a written notice. The notice will explain that you have 10 days to make the payment you’ve missed or your car will be repossessed. This means the lender will seize the car, and you’ll only be able to get it back by paying the car loan off in full.

Will I Be Notified Before the Repossession? How?

Idaho state law says that the lender needs to give you a notice that describes how many payments you’re behind on. It will then state that you have to pay off the missed payments within 10 days or your motor vehicle will be repossessed. 

How Can I Prevent a Repossession?

The easiest way to prevent repossession is to make sure you’re up to date on your payments. It’s worth checking the requirements of your loan agreement to see when a payment is considered late and if you have a grace period to make late payments. Some lenders provide a grace period, which gives you extra time beyond the due date to make a payment without it being considered late.

After the creditor sends the notice, you still have 10 days to avoid the repossession by getting up to date on your payments. If you’re already struggling to make your payment, it may be difficult to get this money. But if you’re able to, you can avoid the repossession and the financial harm that comes with it. 

Regardless of where you are in the repossession process, you should talk with the lender and see if you can get an extension to make your payment. They also may be willing to set up an alternative payment plan. A lender is more likely to do this if you reach out to them before you’ve missed payments.

What Can Repo Companies in Idaho Do? 

Once you’ve defaulted on a payment and the 10-day notice expires, your lender or creditor can repossess your vehicle. The lender can do it themselves, but they usually hire a repossession company to carry it out. 

The repo company doesn’t have to provide any additional notice that they’re repossessing the car. The state of Idaho has the following requirements for repo companies:

• Rep companies can’t go into your home or garage without your permission to take the car. But they can go on your property to take it if it’s somewhere like a driveway. They can also take the car from a public spot like a street parking space.

• They aren’t allowed to commit a breach of the peace. This is when the repo company engages in violence or the threat of violence to take your car.

• The repo company can’t use deceptive methods to get your car. For example, they can’t give you a false recall notice that prompts you to take your car into the shop and then repossess the car from the shop. But if you take your car in on your own for a repair, the repo company can seize it there.

If a repo company engages in any of these acts, you should reach out to an attorney for legal advice about bringing a claim against them.

Just as the repo company can’t breach the peace, borrowers aren’t allowed to either. You can’t physically prevent the repo company from taking your car. You also aren’t allowed to threaten violence.

If someone takes your car when you’re up to date with your payment, reach out to the lender. Similarly, if your car is taken without notice, reach out to the lender. Idaho doesn’t require a repo agent to have a license, so unfortunately you can’t ask them for proof of their license.

What About the Personal Property in My Car? 

If you know that an auto repossession may occur or is definitely going to happen, remove your personal property from the car. This will save you the hassle of having to retrieve it later.

If your car is seized with your personal items in it, the repo company has to give you a notice after the repossession that tells you how to get your items back. Under Idaho law, the repo company can take your personal items out and store them and charge you for the storage. The repo company must give you an appointment to come and get your items. Idaho law doesn’t specify how many days the repo company must give you to pick up your items. 

What Happens After a Repossession in Idaho? 

After the repossession, the lender or creditor will sell the repossessed vehicle at a public auction. Prior to this, you’ll get another notice from the lender with information about the auction. As a borrower, you have the right to purchase your car until the auction occurs. This is called redeeming the car.

If someone buys the car at auction for less than the full amount you owe, you’ll have to pay off the remaining balance. This is known as the deficiency balance. It’s calculated by adding up what you owe on the loan, plus the repossession costs or other fees the lender incurred in the process. Then you subtract the amount the car sold for at auction. For example, if you owe $8,000 on a car and associated repo costs are $1,000, you’ll owe $9,000 minus the auction sale price. If the car sells for $6,000 at auction, then your deficiency balance is $3,000. That’s the $9,000 you owed minus the $6,000 sale proceeds.

Under Idaho law, the lender must sell the car in a commercially reasonable manner. This means that the lender has to sufficiently advertise the sale, and they must try to sell the car for fair market value. If the lender doesn’t sell the car in a commercially reasonable way, you may be able to use this as a defense if the lender sues you to get you to pay the deficiency balance. In that case, you may not need to pay the whole thing.

If you have an upside-down car loan, you will likely owe a larger deficiency balance. An upside-down car loan is where you owe more on the loan than the car is worth. As a result, the car sale isn’t likely to pay off much of the loan balance.

The lender can sue you for the deficiency balance. If they win, they’ll receive a deficiency judgment from the court, which is a court order to make you pay the balance. You can raise defenses if:

• Your car wasn’t properly repossessed.

• The repo company damaged the vehicle and lowered its value. 

• The lender didn’t sell your car in a commercially reasonable manner. 

Do I Still Owe After a Repossession in Idaho? 

When the repossession is over, many borrowers still owe money. You have to pay whatever is left on the loan after the auction. Additionally, you must pay for the repo fees and any other costs outlined in your car loan contract. One way to reduce what you owe is to turn in your car through a voluntary repo or voluntary surrender. You won’t avoid the deficiency balance altogether, but you won’t have to pay any repo fees, which can be hundreds of dollars or more.

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

You can get your automobile back until it’s sold at auction. Once your vehicle is seized, you have to pay the full amount of the loan (not just the past-due payments) and the associated repo costs to get your car back.

It may prove difficult to get this money. Since there’s no rule on when the auction has to occur after your car is seized, you may not have much time. But if you can get the money together, it may still save you money and time in the long run. That’s because if your lender repossesses and sells your car, you’ll have to pay the deficiency balance and then buy another car if you need access to a vehicle.

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

• The Idaho Consumer Protection Manual has useful information from the Office of the Attorney General.

• Idaho Legal Aid Services, Inc. has additional information on car repossessions and is a source for legal advice for low-income Idahoans.

• The Idaho Department of Finance keeps a list of COVID-19 Consumer Resources for Idahoans.