Ohio Vehicle Repossession Laws

If you take out a loan to buy a vehicle and you become unable to make the payments, then you run the risk of having your vehicle repossessed. Vehicle repossession laws are largely the same in all states, but some details governing borrowers’ and lenders’ rights differ from one state to another. Here we will examine Ohio’s laws and what you need to know if you live in Ohio and can’t make your payment or have already experienced vehicle repossession. 

Vehicle Repossession Laws in Ohio

Ohio’s car repossession laws and regulations are all laid out in detail in Section 1309 of the Ohio Revised Code. These regulations don’t give borrowers very much leeway when it comes to delinquent payments. In fact, Ohio’s auto repossession law says that the vehicle lender or secured party can repossess your vehicle if you are just one day late with your payment. But your loan contract may give you more leeway and outline the actions the lender can take when you go into default. 

For example, your loan contract may state that if your payment is more than five days late, you’ll be charged a late fee and additional late fees will be applied for every day you are late after that. If your loan contract doesn’t specify terms like this, the lender has the legal right to repossess your vehicle the day after your payment is due. This is unless you contact your lender and make alternative arrangements for repayment beforehand. The bottom line is, if you are using your car as collateral for an auto loan, then your lender can take the vehicle back immediately if you are late with your payment. 

Of course, many lenders in Ohio do allow borrowers to go into default for at least a short grace period before they will repossess your vehicle. But if the loan agreement makes no specific allowances for late payments, then the lender can repossess your vehicle the day after your payment is due. That’s why it’s important to contact your auto loan provider immediately if you’re going to have trouble making your payments.

Required Notices for Car Repossession in Ohio

Unfortunately, auto lenders in Ohio are not required to send you a written notice prior to repossessing your vehicle if you haven’t made your car payments on time. They can simply come and take the car the day after the payment is due. The laws in cities such as Columbus, Ohio, offer no protection to borrowers whose loan contracts don’t include a grace period. Some lenders may still make a courtesy phone call or send an email, but they are not legally required to do so unless the terms of the car loan specify otherwise.  

Required Notices After Repossession

After repossessing your vehicle, auto lenders are required to send you a notice of default and right of redemption/reinstatement, as well as a notice of sale.

Notice of Default and Right of Redemption/Reinstatement — Your auto lender must provide you with a written notice of your right of redemption and/or right of reinstatement. They must tell you:  

• The amount of the outstanding loan balance, which includes all additional fees and charges that have been incurred;

• The due date by which the loan can be repaid;

• The method of payment (cash or check) by which you can redeem or retire the loan to get your vehicle back; and

• The amount you must pay and what steps you need to take to make the loan current.

Notice of Sale — If you can’t or won’t reinstate your car loan or reclaim your car, your car lender must also send you a written notice informing you whether it intends to sell the vehicle. The Notice of Sale is often sent along with the Notice of Default. Usually, the notice must contain at least the following pieces of information:

• The date of the intended sale, if your car is being sold at a private sale. This does not apply to public auctions;

• If your lender decides to sell your car at a public auction, it must inform you of the location, date, and time of the auction. This gives you a chance to bid on your car or bring your own bidders;

• A breakdown of your liability if you still owe a deficiency after your car has been sold;

• Where and how to get an outline of how the sale proceeds will be applied to any remaining balance on your car loan;

• How you can get a breakdown of the way the lender computed your outstanding balance; and

• Contact information to find out more about the future auction.

What Lenders May and May Not Do

“But wait”, you may say. “If they can get my car after being only a day late with my payment, then what will happen to my car?”

Although lenders may be able to repossess your car if you are late with your payment, they can’t do whatever they please with your car after they take it. The state of Ohio has revised codes that require the lender to sell your vehicle at a price that reasonably matches the current market value of your vehicle, taking into account the year, make, and model of the car and its current condition. This can help reduce your deficiency balance.

Also, these revised codes say that the repossession agents who come to take your car must follow certain rules. They are allowed to enter your yard, driveway, or other private property as long as there is nothing physically blocking like a fence or doorway. But vehicle repossession law says that repossession agents can’t break any laws or commit a breach of the peace when they do this. Breaching the peace includes using violence or intimidation of any form, breaking into a locked house or garage, or otherwise creating a public disturbance. 

If the auto lender or other secured party is not able to repossess your car without breaching the peace, then it may ask the court for a  replevin order. This is when a judge orders you to hand over your car to the lender’s repo agents. If you do not obey this order, you may face fines and other fees or even jail time in extreme cases. If a judge issues a replevin order, don’t take it lightly. This shows that the lender or secured party is quite determined to get your vehicle back. 

The Fate of a Vehicle After Repossession

Once a lender has repossessed your car, they can keep it or sell it at an auction or private sale. And repossession law says that if the sale price of the car doesn’t pay off the remaining car loan balance, the lender can sue you for this amount. But under Ohio law, you are allowed to retrieve your personal property from your car before it is sold. 

Avoiding Repossession of Your Vehicle

If you are behind in your car loan payments, then you need to immediately contact your lender to see what you can do to prevent them from repossessing your vehicle. You may be able to refinance the loan or skip a payment or two, depending on what your lender will allow. Most lenders will be willing to work with you if you’re late with your payment because of a temporary problem like unemployment. 

If you’re struggling with all your debt repayments, you may choose to file bankruptcy. If you file Chapter 13 bankruptcy, your lender may help you make alternative payment arrangements. If you are filing Chapter 7 bankruptcy, then your lender may not be able to repossess your vehicle at all, at least during the automatic stay.

And even if your car has already been repossessed, you may still be able to get your car back by redeeming it for its current market value. Many people have bought their own vehicles back at public auctions, and you can do the same, provided that you can get the money to buy it before the sale date. And don’t hesitate to seek legal advice if you’re not familiar with Ohio’s repossession laws. 

Let’s Summarize...

Ohio’s car repossession laws state that auto lenders can repossess your car the day after your car payment is due. Sometimes your loan terms will include more generous provisions. If a lender repossesses your car, you still have rights, including the right to notices, including a notice of default, a notice of redemption/reinstatement, and a notice of sale. Also, repo agents can’t breach the peace or be violent when they come to get your car.

If your car is repossessed and sold, you may still be liable for the remaining balance on the car loan, which will also include fees from the repossession process. It’s best to avoid repossession altogether. If you live in Ohio and you’re falling behind in your payments, talk to your lender immediately and ask what options you have to prevent repossession. And don’t hesitate to get some legal advice if you need it.