Repossession Laws in Oklahoma

Financing a car purchase is the only way many people can afford to buy a decent vehicle. But circumstances can change. If you end up not being able to make your monthly payment, your lender can repossess your vehicle. Repossession is your lender’s right to take your car back. Most states have very similar repossession laws, but it’s important to know the particular rules in your state. With that in mind, let’s go over the repo laws in Oklahoma.

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

Missing even one payment puts you at risk of repossession. That’s because when you sign a loan contract, your lender becomes a lienholder with the right to repossess your vehicle if you default on your loan. Breaking a promise in your loan agreement, like not making a payment, puts you in default. 

Some car loan contracts have a grace period that gives you some time to make your payment after the due date. But grace periods can mean different things, so it’s important to look carefully at your contract. For example, your contract may say you’ll be charged late fees only once your payment is more than 10 days late. But that grace period doesn’t mean that you’re also safe from being in default within that same time. 

You also can be in default for things other than not making your full monthly payment on time. For example, your car loan contract probably requires you to keep your car insured. If it does, then you could be in default if you let that insurance lapse.

Will I Be Notified Before the Repossession? How?

That really depends on your lender. The law doesn’t require a lender to notify a borrower before the lender repossesses a vehicle. But your lender may have a policy or practice of providing written notices or verbal warnings under some circumstances. Your history of staying current on your loan can affect whether your lender gives you any warning.

How Can I Prevent a Repossession?

The main way to avoid auto repossession after missing your payment is to catch up as quickly as you can. Although your lender can legally repossess your car the day after you miss a payment, it won’t necessarily do so. Your lender may not be so quick to repossess your car if it’s your first time being late or you haven’t been late in a long time. 

It’s essential to make your overdue payment before your lender has a repossessor go out to take your vehicle. But you could be out of time even before that happens if your lender has accelerated your loan. This means your loan’s full balance becomes due immediately and the lender doesn’t have to accept a late payment. Your lender has the right to accelerate your loan after you’ve defaulted.

Calling your lender right away can be helpful. Your lender might give you a clear idea of when you’ll need to get your payment in before it will send someone to repo your vehicle. It’s best if you can tell your lender for certain when you’ll be able to pay. You don’t have to wait until you’re already late to talk with your lender. If you know you’re not going to be able to make your full payment on time, it may be better to call your lender before the due date. 

Talking in advance may help to convince your lender to give you more time to pay or to let you defer a payment. When your lender agrees to a payment deferral, you’re allowed to skip making a payment on its original due date. Instead, the payment gets moved to the end of the loan. Having a good track record of paying your loan on time is likely to improve your chance of working something out with your lender.

It’s not a good idea to try hiding your vehicle to keep it from being repossessed. You could be criminally prosecuted for that in the state of Oklahoma.

What Can Repo Companies in Oklahoma Do?

Your lender can use self-help repossession to take your vehicle. That means the lender doesn’t need a court order to do it. Repossession companies don’t need a special business license, but to tow your vehicle, they need to be licensed as a wrecker service through the Oklahoma Department of Public Safety.

A repo company can take your vehicle from just about anywhere. It doesn’t matter whether your vehicle is on public or private property. Your vehicle can be repossessed when it’s parked on a street, in a parking lot, or in anybody’s home driveway. Even if your car is parked inside a home garage with the door open, a repossession agent can go in and get your car. That said, there are some things the repo agent can’t do.

They Can’t Breach the Peace

Self-help repossession is fine as long as it doesn’t result in a breach of the peace. What’s considered a breach of the peace depends on the specific facts of the repo. The following are all examples of repo agent conduct that may be a breach of the peace:

• Opening a closed garage door without permission to repo a vehicle,

• Breaking and entering a locked gate,

• Using any physical force against anyone or causing any property damage,

• Threatening physical force or property damage, and

• Going forward with repossession after someone objects.

Almost any police officer involvement that in some way assists a car repossession can be a breach of the peace. It might also violate your civil rights. Police can carry out their normal, law enforcement roles, as long as their actions don’t suggest they are favoring the repossession.

You Can Peacefully Object to a Repo

Even if you’re in default, your lender can’t repo your vehicle if you (or anyone) objects during the attempted repossession. Continuing with a repo after an objection is a breach of the peace. It’s enough just to tell the repo agent not to take the car or to get off your property. However you object to the repo, it’s important to keep it peaceful. Having a physical confrontation with a repo agent, damaging the repossessor’s vehicle or equipment, or making any kind of threat could result in legal consequences, including criminal prosecution.

While objecting should stop the current repossession attempt, the repo company can try to repo your car again later when no one is around to object. Your lender also can file a case in court to get a court order for repossession. Exercising your right to object can be costly. You could owe the lender for the expenses of the additional repo attempts, attorney fees, and court costs.

No Repo of Vehicles From Tribal Lands Unless Tribal Law Allows

This article talks about the law for repossessions taking place within Oklahoma — but that doesn’t include the many American Indian reservations located inside Oklahoma. If your car is within a reservation, lenders and their repo agents have to follow the tribe’s law when carrying out repossessions. 

Limits on Repo of Vehicles Purchased by Members of the Military

If you’re in federal military service, the Servicemembers Civil Relief Act protects against self-help repossession in certain situations. A lienholder needs a court order to repossess your vehicle when:

• You bought it before you began military service, and

• Your lienholder wants to repossess it during your military service.

Oklahoma law extends that same federal law protection to state military service members.

What About the Personal Property in My Car?

If you’re there at the time of the repossession, the best thing to do is to ask the repo agent to let you get your things out before taking your car. That avoids several potential problems, but it’s not your only option. 

If you left any personal belongings in your car when it was taken, you’re allowed to get them back. The repossession company (or your lender) has to let you get your personal items back at a reasonable time. The sooner you go to get your things, the better. If you’re not sure where your car was taken, ask your lender. Requiring you to pay anything to get your belongings back is probably unlawful and an unfair trade practice.

That said, there can be difficulties getting your belongings back. The repo company and your lender have a responsibility to take reasonable steps to protect the contents of repossessed vehicles. But there’s always a risk that something will be missing or that you’ll find something’s been damaged. Proving what was in your car or that something wasn’t damaged when you’d left it in the car can be a challenge. 

If you’re expecting that your car might be repossessed soon, you can avoid those potential problems by not keeping anything in the car. Leave everything you can at home and take everything else with you whenever you leave your car. 

What Happens After a Repossession in Oklahoma?

Within two hours of a wrecker or towing service repossessing your vehicle, the service must report to law enforcement with details about the repo.

Now that it has your vehicle, your lender will sell it to offset your debt. There is a small exception to that requirement. A lender doesn’t have to sell a vehicle in certain situations where your lender can’t hold you liable for the debt, as discussed below.

You Must Be Given Notice Before Your Vehicle Is Sold

Your lender can’t sell your car without first giving you written notice. The lender has to send it within a reasonable time before the lender tries to sell the vehicle. A reasonable time usually means 10 days or more. 

The notice has to tell you certain things, such as:

• How to find out the amount you’d need to pay to save your car,

• That you’re entitled to get a written accounting explaining how much you owe (and how much it costs to provide one),

• Whether your lender will be selling the car either by making a private sale or by taking it to a public auction,

• If it will be a private sale, then the soonest date when your lender may sell it,

• If it will be a public auction, then the auction’s exact date, time, and location, and

• How your lender will apply the sale proceeds to determine how much you still owe.

By telling you when your car can be sold, the notice lets you know how long you have if you want to buy your car back. Also, if the sale will take place at a public auction, you can go to it and bid on your car. Since it’s a public auction, any friends or family members can go too. It could be an opportunity for you to get your car back at less than market value. Even though you’ll probably still owe some remaining debt, there wouldn’t be a lien on your car.

The Sale Must Be Commercially Reasonable

When selling your repossessed vehicle, your lender has to do it in a commercially reasonable manner. But that’s not to say that your lender has to sell it for fair market value. It just means that the entire sale process has to be carried out like a regular business transaction. 

For example, it’s probably not above-board for the lender to sell a repossessed vehicle at a very cheap price to someone who has a close connection to the lender, like an employee. Also, it might not be commercially reasonable for a lender to keep the car for a long time without trying to sell it. That could be an issue when the delay has a significant, negative impact on the sale price.

There is a particular situation where the lender’s delay in selling the vehicle is clearly improper. If you’ve paid at least 60% of your vehicle’s cash price, your lender has to sell it within 90 days of repossessing it.

What Happens With the Money From the Sale?

The sale proceeds don’t start reducing your debt until all the repossession costs are covered. These costs can include the actual repossession, storage fees, expenses to prepare the vehicle for sale, and any costs involved with the sale. The expenses must all be reasonable. The proceeds can also be used for reasonable attorney fees and legal costs, if any, as long as they’re allowed by your loan agreement. 

Whatever money is left will be credited to your loan balance. If the sale proceeds cover your debt completely and any money remains, you get the surplus, but this rarely happens. In most cases, there will be a deficiency balance, which is the unpaid balance of your debt. 

When To Get Legal Advice

Getting legal advice can be helpful when you think something was wrong with the repossession, the notice, or the sale. The sooner you can talk to a lawyer, the better. That’s particularly true when you need to try to stop your lender from selling your repossessed car. Some examples of situations where legal advice might help include:

• The repossession took place even though you weren’t in default at the time.

• The repo agent did something that could be a breach of the peace.

• In the written notice before the sale, any of the required information was incorrect or missing.

• Your repossessed car was sold for a particularly low price and you have some reason to think the sale of the vehicle wasn’t conducted properly. 

Do I Still Owe After a Repossession in Oklahoma?

With limited exceptions for some lower-cost vehicles, repossession doesn’t eliminate your auto loan debt. For most vehicles, you’ll likely still owe a debt for your defaulted loan. Selling your repossessed vehicle allows the lender to recover some of the money you borrowed. But it’s rare that the sale proceeds are enough to prevent you from having a deficiency balance.

It’s common to be stuck with a deficiency balance if:

• At the time of the repossession, your loan balance was more than your vehicle’s current value. Being upside-down on your loan can easily happen since vehicles tend to depreciate quickly. A high interest rate loan also can contribute to being upside-down. When this happens, it’s practically impossible for your lender to sell the vehicle for enough to cover your loan balance.

• Your debt includes not only your loan balance but also the costs involved in the repossession and sale.

• When your repossessed vehicle gets sold, there’s a good chance that the sale price will be less than your vehicle’s market value. 

There’s a common misunderstanding that voluntarily surrendering your car to your lender means you no longer owe on your loan. Voluntary repossession doesn’t get rid of your liability for a deficiency balance. But it has the benefit of eliminating the need for your lender to pay someone to repossess your car. Since that expense would get passed on to you, returning the car yourself saves that cost from being added to your debt. 

The first time your lender sends you a written demand to pay the deficiency balance, your lender also must send you a written explanation showing how your deficiency was calculated. 

This explanation must tell you:

• How much your total loan balance was before accounting for any added costs or credits

• The amount that your repossessed vehicle was sold for

• The sum of any credits that should be applied to your account — for example, credits for unearned loan interest or for the cancellation of any insurance or service contracts you’d been paying for

• The sum of all expenses related to the repossession and the sale

If your lender hasn’t sent you a written demand and explanation yet, you can request that your lender give you an explanation of the deficiency. Your lender then must send you the explanation within 14 days of your request. 

You Might Not Owe a Deficiency for a Less Expensive Car

There’s an Oklahoma law that protects some buyers from owing any deficiency balance if the cash price of your car was $5,400 or less. The cash price is how much it would’ve cost you to buy the car without a loan. You can find the cash price listed in your purchase papers. 

The Oklahoma Department of Consumer Credit sets the amount for this protection each year based on the U.S. Consumer Price Index. You can find the current Dollar Changes table on the Department’s website. The table contains amounts for different statute sections, so you’ll need to look at the amount for Section 5-103. 

But there are a couple of exceptions where the anti-deficiency statute doesn’t apply. In either of the following situations, you’ll still owe a deficiency:

• You wrongfully damaged the vehicle.

• While you’re in default, your lender demands that you make the vehicle available to the lender, and you “wrongfully fail” to do so according to the law.

When this statute applies, your lender can choose not to resell the vehicle.

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

It’s possible to do so, but it’s far more difficult than just making up the payments you’re behind on. 

You have a right to redeem your car. That means you can get it back by paying the total balance left on your car loan, along with your lender’s repossession expenses. If you’re going to redeem your vehicle, you may not have much time. You have to pay the complete redemption amount before your lender sells the vehicle. The notice your lender has to send about its plan to sell your car also must tell you how to find out the redemption amount. 

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

• Legal Aid Services of Oklahoma, Inc. provides legal assistance for free to those who qualify.

• The Oklahoma Bar Association website lists a number of resources for seeking free or low-cost legal assistance.

• You can look for an Oklahoma consumer law attorney in the member listings of the National Association of Consumer Advocates.