When you buy a car with borrowed money, you sign an agreement for a secured loan extended by a bank, credit union, or automotive finance company. In Connecticut, state law permits the repossession of vehicles if the borrower defaults on the loan. The state allows "self-help" repos outside of the courts, as well as repossessions without notice to the buyer.
Notice to Buyer and Police
Connecticut law allows lenders to serve notice on buyers of an intention to carry out a repossession. This notice is voluntary on the part of the lender, but may not be carried out less than 10 days before the repossession actually takes place. If the lender intends to carry out a repossession without notifying the buyer, he must notify the local police immediately after the repossession takes place.
If the lender does not provide advance notice to the borrrower, it must provide him a statement of the loan account, as well as storage costs and repossession expenses, within three days of the repossession. The lender must hold the car for a grace period of 15 days before disposing of it. During this time, the buyer has the right to make good on the loan arrears. If he brings the loan current and pays the reasonable expenses of any repossession, the lender is obligated to return the vehicle.
Connecticut does not require that a lender go through the courts, or secure a court order, before taking possession of their security. A "self-help" repossession, like a "self-help" foreclosure, means that no suit is filed and no hearing takes place. But state law does prohibit any breach of the peace or other violation of law in the process of repossession. Once a car is in the possession of the lender, the lender is free to sell it or dispose of it in any way he sees fit.
Resale of Repossessed Vehicles
Connecticut law gives a lender who carries out a repossession 180 days to sell or dispose of the vehicle. A lender who repossesses a vehicle must provide the borrower with written notice of any public sale or auction of the vehicle, not less than 10 days before the sale takes place. If the proceeds of the sale are less than the loan balance, the lender has the right to file a claim for the total deficiency, in addition to the expense of repossession, and request a court judgment against the borrower for that amount.