ABA Family Legal Guide

Automobiles

Buying, Renting, and Leasing a Car

Buying a New Car

How does the sale of a repossessed car take place?

The creditor can sell the car to satisfy the debt. The sale has to be commercially reasonable, and different states may give that term different meanings. Some states may require the creditor to get a court's permission before holding a sale. The rules may vary from state to state, but you should have notice of the time, place, and manner of the sale. If the sale is public, you have the right to participate by putting in a bid on the car.

If the sale does not bring in enough money to pay off the car debt and related expenses, you can be held responsible for the rest of the debt. If the sale brings in more money than the debt owed and permitted expenses, the creditor selling the car should give the extra money to you.