Repossession Laws in Nevada

When you buy a car using a loan, your lender can repossess the car if you don’t make your payments on time. Repossession is your lender’s right to take your car back because you broke your contract, mainly by missing your monthly payment. Most states have very similar repossession laws, but there are some important differences. This article discusses Nevada’s repossession laws.

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

Until you’ve paid off your car loan, your lender has a security interest in the vehicle. As a secured creditor, your lender has the right to repossess your car if you don’t pay the loan as agreed. This is what’s known as being in default. Your lender can’t repossess your car unless you’ve defaulted on your loan. Missing even one month’s payment can count as being in default.

How late your payment must be before you’re considered in default will depend partly on where you bought the car. 

• If you bought your car from a Nevada dealer on or after Oct. 1, 2012, the Nevada Financial Institution Division requires your contract to say that you’re not in default until your payment is more than 30 days late. It’s a deceptive trade practice if your lender repossesses your vehicle before then. 

• If you bought your car out-of-state, check your contract to see if there’s a grace period and what it entails. A grace period may give you more time to make your payment without having to pay a late fee. But this isn’t the same as a grace period before you’re in default. Review your loan agreement carefully.

Will I Be Notified Before the Repossession? How?

Lenders don’t have to give you any notice before repossessing your vehicle in Nevada. Your lender might provide you with a written or verbal warning if it chooses to, but it’s not required.

How Can I Prevent a Repossession?

If you’re late on your car payment, you can prevent repossession by getting caught up on your car loan before your lender acts on your default. It might be helpful to call your lender about making up your missed payment. Remember that if you bought your car in Nevada, you have at least 30 days after your due date to get current with your payments. You may still owe a late fee depending on how late you are and your contract terms. For Nevada vehicle sales, the contract can only charge late fees for payments more than 10 days late.

You need to catch up on your loan before your lender sends out a repossessor or decides to accelerate your car loan. When a lender accelerates your loan, the entire balance of your loan becomes due. This can happen any time after you’ve defaulted on the loan. If you bought your vehicle in Nevada, you can’t be in default until your payment is more than 30 days late. Nevada car loan contracts include a waiver of a buyer’s right to get notice before acceleration. Many loan contracts for car sales in other states also waive that right. Once your lender has accelerated your loan, your lender may reject a late payment. 

If you won’t be able to make your payment on time, contact your lender before the payment is due. Tell them what’s going on and ask if they can work with you. For example, maybe your lender will give you extra time to make your payment or allow you to defer the payment. The lender will be more willing to work with you if you haven’t been late before or in a long time.

In some circumstances, you might be able to stop your vehicle from being repossessed temporarily, or even for the long-term, if you file for Chapter 7 or Chapter 13 bankruptcy.

You can be charged with a criminal offense for hiding your car to keep it from being repossessed. So this isn’t a good way to stop the repossession. 

What Can Repo Companies in Nevada Do?

A repo company can take your vehicle from any place that your vehicle is unprotected. Repossession can happen when your vehicle is parked on a public street, in a business’s parking lot, or in your driveway. If your garage door is open, a repo company can even go into the garage to take your car! 

They Can’t Breach the Peace

Vehicle repossession isn’t allowed when it results in a breach of the peace. Nevada courts consider a repossession to be in breach of the peace if it’s done either at an unreasonable time or in an unreasonable manner. Nevada law doesn’t clearly define what an unreasonable time is, but an unreasonable manner includes when a repossessor:

• Opens a closed home garage to take your vehicle

• Breaks a locked gate to take your vehicle from a driveway or other protected area

• Takes your vehicle after you or another person has objected at the time of the repo

• Threatens or uses any physical force on anyone

• Threatens to or causes damage to any real or personal property

Having a law enforcement officer present during the repossession might be considered a breach of the peace, even if the officer is just observing.

You Can Peacefully Object to a Repo

If you or someone else objects to the repo when the repossessor attempts to take your car, the repossession has to stop. Otherwise, the repo is in breach of the peace. Telling the repossessor to get off your property or not to take your vehicle is enough. It’s even okay to obstruct the repo by standing in the way of your vehicle being taken or sitting in the vehicle so it can’t be taken. It’s not clear at what point during a repo it becomes too late to object. 

Any objection must be peaceful. You can’t interfere physically with the person repossessing your car. You also can’t do anything to the tow truck or to the repossessor’s equipment. Otherwise, you could risk civil claims or criminal charges.

Objecting will only temporarily stop the repossession. The repossessor can try to take the vehicle later. Or the lender can file a lawsuit to get a court order allowing the lender to take the vehicle.

Repossessors Must Be Licensed and Registered

Repossession businesses must be licensed as repossessors by the State of Nevada Private Investigators Licensing Board. Any employee of a repossession company must also be registered with the board and should have a work card showing their registration. On the board’s website, you can verify a repo company’s license or a repo employee’s registration.

Licensing and registering aren’t required if you financed your car from a buy-here, pay-here dealer and the repo is done by the dealer’s employee. This is because of an exemption in the Nevada Revised Statutes.

No Repo of Vehicles From Tribal Lands Unless Tribal Law Allows

If your vehicle is on an American Indian tribe’s reservation or colony in Nevada, the lienholder must follow that tribe’s law to repossess your vehicle. For example, some tribes prohibit a lender/lienholder from repossessing a vehicle without first getting a tribal court order. But if you live on tribal land, Nevada repo law still applies whenever your vehicle is outside of the reservation.

Limits on Repo of Vehicles Purchased by Members of the Military

If you’re a member of the military, you have some additional protection from auto repossession. Under the federal Servicemembers Civil Relief Act, if you bought a vehicle before entering military service, the lienholder needs a court order to repossess it while you’re serving.

Repo Limits During or After Government Shutdowns

No one can repossess vehicles owned by federal, tribal, or state government workers, or by members of their households, during a government shutdown or for 30 days afterward. This applies not only to government employees but also to employees of government contractors.

What About the Personal Property in My Car?

If you’re worried about your car being repossessed, it’s best not to leave personal items in it. Some people keep their car purchase papers in the car, but that can be risky even when your car isn’t in danger of repossession. The lender or repo company must give you a reasonable opportunity to recover your personal belongings when your car is being repossessed or after a repo. But it can be difficult to prove what was in the car.

Nevada car loan sale contracts allow personal property in a repossessed vehicle to be stored at the borrower’s expense. If you bought your car outside Nevada, you could still be charged storage fees. That said, it may not be lawful for a repossessor to require you to pay storage fees before letting you get your personal belongings back. The federal Consumer Financial Protection Bureau has considered that an unfair trade practice.

If you bought your vehicle in Nevada, the lender can dispose of your personal property if you don’t get it within 90 days of the repossession. If you bought your car outside of Nevada, it’s not clear how long the lender or repossessor has to hold on to your belongings. The sooner you contact the repo company about getting your belongings, the better. If you’re not sure who took your vehicle, ask your loan company.

What Happens After a Repossession in Nevada?

If your vehicle is repossessed without your knowledge, the repossessor must report the repo to the city police or county sheriff, which must then report it to the Department of Motor Vehicles. Once your car’s been repossessed, your lender needs to try to resell it to cover some of the loss of your loan payments. This can be done either through a private sale or a public auction. 

You Must Be Given Notice Before Your Vehicle Is Sold

Before your lender can sell your car, it has to give you written notice within a reasonable amount of time ahead of the sale. Your lender will have to give at least 10 days notice. It’s possible that a court might find 10 days not to be reasonable in some circumstances, but it’s likely to be enough in most cases.

The Nevada Revised Statutes detail what specific information the notice must include. For example, the notice must:

• Itemize the loan balance, repossession costs, and any other costs or fees related to your default. 

• Give you information about any credits you’ll be given for unearned interest on the loan or for any prepaid insurance that’s canceled because you defaulted. 

• Explain how you can pay to get the vehicle back. 

The notice must also tell you how the lender is going to sell the vehicle. 

• For a public auction, the notice must specify the date, time, and location of the auction. You can attend a public auction and bid on the vehicle or have friends or family go to the auction to bid. Given the nature of auctions, it’s possible you could get your vehicle back for below its market value.

• If it will be a private sale, the notice must tell you the earliest date that a private sale could happen.

The Sale Must Be Commercially Reasonable

Both public auctions and private sales have to be done in a commercially reasonable manner. That doesn’t necessarily mean that your lender needs to sell the vehicle at fair market value. As long as the sale is a typical business transaction, it’s probably fine. Auctioned vehicles will usually sell for less than they would in private sales. But it’s likely not commercially reasonable for a lender to sell the vehicle at a low cost to a family member of the lender’s owner, for example. 

Also, you might question whether a sale is commercially reasonable if the lender holds on to the car for a long time before selling it. For example, if your lender waits so long that your car’s value drops significantly, it might not be considered commercially reasonable. If you’ve paid at least 60% of the cash price you bought the vehicle for, it definitely won’t be commercially reasonable if your lender doesn’t sell the car within 90 days of repossessing it.

What Happens With the Money From the Sale?

The sale proceeds are first applied to the costs of the repossession and sale. As long as they’re reasonable, the costs can include the expense of the repossession itself, as well as storage costs, expenses to get the vehicle ready for resale, and costs related to the sale. Reasonable attorney fees and costs often can be covered too, if allowed in your contract. After all of the costs are paid, any remaining sale proceeds will be applied to your debt. 

It’s not likely that there will be enough to fully cover your debt, much less anything leftover. But if there is, the lender must give you the surplus. More likely, there will be a deficiency balance. The deficiency is the amount you owe on the loan and other costs after subtracting the resale price. 

When To Get Legal Advice

It’s a good idea to get legal advice if you think something was wrong with any part of the auto repossession process. Some examples could be:

• You hadn’t defaulted on your loan when the repo took place — especially if you bought the car in Nevada and weren’t more than 30 days late on your payment.

• Some kind of breach of the peace occurred during the repo.

• Your lender didn’t send you a proper notice after the repo.

• The lender resold your vehicle for a low price and there was something questionable about the sale.

Do I Still Owe After a Repossession in Nevada?

Most likely, the answer is “yes.” Just because your lender takes your car and resells it to cover some of your debt doesn’t mean the rest of your debt disappears. There’s almost always a deficiency balance after a lender sells a vehicle and accounts for the costs of the repo and sale. 

Given how fast most vehicles depreciate, you may have been upside-down on your loan. That’s when you owe more than the vehicle’s value. An upside-down car loan pretty much guarantees that the sale proceeds won’t cover your debt. Even without being upside-down, there could still be a deficiency since the sale may be for less than market value and because costs get added to the debt. 

You won’t be liable for a deficiency if your creditor fails to send you timely and proper notice of its intent to sell the vehicle. To be timely, it must be provided within 60 days after your vehicle is repossessed. To be proper, the notice must include all of the information required by Nevada law.

If you can’t afford your car loan, you may decide to voluntarily return your car to the lender rather than waiting for it to be repossessed. This is called voluntary repossession. Some people assume that returning the car voluntarily somehow gets them off the hook, but that’s not true. Turning your car in can reduce your deficiency balance though. That’s because your lender can’t charge you for the cost of sending a repossession agent, which could cost you hundreds of dollars.

After the lender sells your repossessed vehicle, it must send you a written explanation of the deficiency to demand that you pay it. The explanation has to show:

• How much your debt was before the lender resold the vehicle,

• How much of your debt was offset by the sale of the vehicle,

• Any credits you’re entitled to (such as a refund from unearned interest or canceling prepaid insurance or service contracts), and 

• The costs related to repossessing and selling the vehicle. 

Instead of waiting, you can ask your lender for a written explanation of the deficiency. Your lender then has 14 days to give it to you. There’s no deadline to pay the deficiency, but your lender can sue you to get a deficiency judgment against you. 

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

You have a limited right of redemption to get your car back after repossession. To redeem your car, you have to pay the entire balance left on your car loan, as well as all the repossession costs. If you want to redeem your car, you have to do it before your lender sells the car. The notice your lender sends you after the repossession has to give you information about how to redeem your car. 

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

If you’ve been sued for an auto deficiency, the Legal Aid Center of Southern Nevada has instructions and forms for filing an answer to the lawsuit without a lawyer. Even if you haven’t been sued, the documents have useful information about Nevada repossession laws.

If you need to seek legal advice about repossession, consider the following:

• The Legal Aid Center of Southern Nevada, Nevada Legal Services, and Washoe Legal Services all provide free legal advice or representation if you’re eligible for their services and if they accept your case.

• The National Association of Consumer Advocates has listings for private consumer law attorneys in Nevada. Depending on the nature of the case, some attorneys will take consumer cases without requiring you to pay attorney fees or costs.

You can also find attorneys and get a low-cost consultation through the State Bar of Nevada’s Lawyer Referral Service.