Repossession Laws in Indiana

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

You can technically face repossession in Indiana after missing just one payment, especially if your loan contract doesn’t include a grace period. Indiana law doesn’t require lenders to wait a certain number of missed payments before repossessing a vehicle. Instead, repossession can happen as soon as you’re in default on the loan.

Most car loans define default as failing to make your monthly payments on time. But default can also include other things, like not keeping the car insured. Every loan agreement is different, so it’s important to review your contract carefully. Look for information about late payment policies, what counts as a default, and whether you have a grace period.

If you're unsure how your lender handles late or missed payments, you may want to reach out to them directly.

Will I Be Notified Before the Repossession? How?

No, Indiana law doesn't require lenders or repossession agents to notify you before taking your car. Once you're in default on your loan, they can repossess the vehicle at any time — day or night — without giving you a heads-up.

Repossession agents do have to notify the local sheriff’s office either before the repossession or within two hours afterward. But this notice doesn't have to be shared with you. That means your car could be taken from your driveway, from a parking lot, or even while you're at work, without any warning.

⏰ If you’re behind on payments or out of compliance with your loan terms, it’s safest to assume that repossession could happen at any time.

How Can I Prevent a Repossession?

You may still have time to prevent a repossession, even if you’ve already missed a payment. One of the best steps you can take is to call your lender as soon as you start struggling to make the payment. Many lenders are willing to work with borrowers who are up front about their situation.

Depending on the lender, you may be able to get a new payment plan, a short-term extension, or a temporary forbearance, which pauses your payments for a set time. This can help you avoid losing your car while also saving the lender the cost of a repossession.

In Indiana, your car can be repossessed as soon as you're in default. Some loan agreements include ways to “cure” the default — like catching up on missed payments — to get back in good standing. Check your loan paperwork to see if that’s an option.

If curing the default isn’t possible, other strategies like refinancing, selling the car, or even filing for bankruptcy might help. We explore these options more below.

What Can Repo Companies in Indiana Do? 

In Indiana, repossession companies can take your car without warning if you’re in default on your loan, but they must follow some rules. The biggest rule is that they can’t “breach the peace” while repossessing your car, which means they can't:

• ❌ Damage or destroy your personal property

• ❌ Use threats, intimidation, or force

• ❌ Trick you into handing over the car

• ❌ Enter your home, garage, or behind a locked gate without permission

Your “home” includes more than just the inside of your house. It also includes locked or fenced areas, attached garages, and other private spaces.

In most cases, repossession agents are legally allowed to take the car from your driveway, public streets, open parking lots, and repair shops.

They don’t need your permission to do this, and in Indiana, repo agents aren’t required to have a license. That means there’s no state agency making sure they follow best practices or treat you respectfully.

Can I Stop the Repossession?

You have the right to verbally object to the repossession. If you do, the agent is legally required to stop and leave. If they don’t, you can call the police and report a breach of the peace.

But you must follow the rules, too. If you try to physically stop the repossession, that could lead to injury, arrest, or extra fees added to your account.

Here’s what you can do instead:

• ✅ Verbally object to the repossession (calmly and clearly)

• ✅ Take notes on what’s happening

• ✅ Record or photograph the event if it’s safe to do so

• ✅ Write down the date, time, and any repo company info

• ✅ Get contact information from any witnesses

• ✅ Call the police if the repo agent refuses to leave after you object

Watching someone take your car can be incredibly upsetting, but staying calm and gathering information can help protect your rights later. If the agent broke the rules, your notes and evidence could be crucial if you need to file a complaint or take legal action.

What About the Personal Property in My Car? 

If you're at risk of repossession, it’s a smart idea to remove all your personal belongings from your car ahead of time. This can save you a lot of stress and help you avoid losing things that matter to you.

If your car does get repossessed and your personal items are still inside, Indiana law gives you some protection, but only for a short time. If any of the items left in your car are worth $10 or more, the lender must:

• Make a list (inventory) of those items

• Send you a written notice by certified mail

• Give you 30 days from the date the notice was mailed to claim your belongings

If you don’t claim your items within that 30-day window, the lender can legally keep them.

If you realize something important is missing after the repo, reach out to your lender right away. Let them know what items were left in the car so they can’t say you abandoned your property. Acting quickly gives you the best chance of getting your belongings back.

What Happens After a Repossession in Indiana? 

After your car is repossessed in Indiana, the lender has two main options: They can either keep the car or sell it. But if you’ve paid more than 60% of the loan, they’re required to sell it, usually through a public auction.

If your car is going to be sold, the lender must send you a Notice of Sale. This notice will include details like the date, time, and location of the auction.

Most lenders choose to sell the car and try to get the highest price they can. But Indiana law says they must take commercially reasonable steps to make the sale fair. That doesn't mean getting top dollar, but it does mean the lender has to:

• Research and consider fair market value

• Make basic repairs if needed to help sell the car

• Advertise or list the car properly before the auction

Even if the final sale price is lower than expected, what matters most is whether the lender made a good-faith effort to sell the car fairly, not the price itself.

Do I Still Owe After a Repossession in Indiana? 

Many people think that once their car is repossessed, the loan is wiped out. Unfortunately, that’s not how it works.

After your car is sold, the money from the sale is used to cover costs in this order:

1. Repossession-related fees (like towing, storage, and repo services)

2. Sale-related fees (such as cleaning, advertising, auction fees, or basic repairs)

3. Your outstanding loan balance

Your lender is required to send you a post-sale notice that explains how the money was applied. This should include an itemized breakdown of all charges. Be sure to review this carefully and ask for receipts if something looks off. Any errors will likely be your responsibility unless you catch them.

🗃️ Keep all repo and loan documents in a safe place. You may need them if the lender sues or if you want to dispute a deficiency balance.

What Happens if There’s Still a Balance After the Sale?

If the sale brings in more than the total costs, you’re entitled to get that extra money back. But if the sale doesn't cover everything, you’ll owe the remaining amount. This is called a deficiency balance. Many people end up with a deficiency if they were upside-down on their car loan — meaning they owed more than the car was worth.

Indiana has a helpful protection if your car was originally purchased for $4,000 or less (as of 2025; amount changes annually). In that case, your lender must choose: either repossess the car or sue you for the unpaid balance. They can’t do both. But if your car cost more than $4,000, they’re allowed to pursue a deficiency judgment against you after repossession.

↩️ One way to reduce how much you owe after repossession is to consider a voluntary surrender, where you return the car to the lender yourself. This may not erase your debt, but it can help you avoid extra fees for towing and storage. And it could show the lender you're trying to cooperate, which might help if you're negotiating a settlement later.

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

Yes. You should receive a Notice of Sale once your car is repossessed that will give you instructions on how to redeem (get back) your car before it’s sold. This often involves paying back all the money you owe plus the expenses of the repo.  

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

• Indiana Legal Services has more information on auto repossessions and how to deal with a repossessed vehicle.

• Indiana State Bar Association has information on accessing free legal advice and representing yourself in legal matters.

• The American Bar Association has a list of places to find legal advice and assistance across the state of Indiana.

• The current cost of a car where the lender has to choose between repossession and deficiency judgment is $4,000, but it changes annually.