When financing a car, the lender technically “owns” part of it until you finish paying off your loan. When payments fall behind, the lender can legally take the car back. This is called repossession. In Arizona, you may receive a car repossession notice, so you will know how to handle things after your car is taken. 

Advanced Car Repossession Notice 

You might be expecting this, but advanced notice is not required. In Arizona, your lender does not have to warn you before repossessing your car. Once you have missed a payment or violated the contract, they can repossess the vehicle. Even without a court order and without telling you first, they can take it as long as they do not “breach the peace.”

Arizona’s version of the Uniform Commercial Code (UCC) A.R.S. § 47-9609(A) allows a secured party (the lender) to take possession of collateral “after default”. This is done either through judicial process or “without judicial process if it proceeds without breach of the peace.”

Simply put, they can tow your car from your driveway in the middle of the night, but they cannot use force, threaten you, or break into a locked garage to get it. If they do, that is considered a breach of peace, and it could make the repossession illegal. For example, you missed two payments, and one morning your car is gone. You later find out the repo agent came quietly at 3 a.m., hooked the car, and left. That is legal. But if they came banging on your door, yelled threats, or broke your gate, that is a breach of peace. Only then will you have grounds to challenge the repossession.

Written Notice of Sale

Once your car is taken, the lender can’t just sell it right away. Under A.R.S. § 47-9611 and § 47-9613, they must first send you a written notice. This is often called a “Notice of Intent to Sell” or “Notice of Disposition.”

This notice has to tell you several important things:

• That your car has been repossessed
• The intended method of sale — public auction or private sale
• The date, time, and place of the sale (for public sales)
• An explanation of your right to redeem the car before it is sold
• Contact information so you can ask about getting your car back

This letter usually arrives by mail within a few days after repossession. The law says it must be sent a “reasonable time” before the sale, though Arizona law does not define a specific number of days. Generally, creditors give at least 10 days’ notice to stay safe. For example, your car was repossessed on March 1st. You might get a letter around March 5th saying:

“We plan to sell your vehicle on March 20, 2025, by private sale. You may redeem your vehicle by paying $8,250 before that date. Contact ABC Finance at (602) 555-0199 for details.”

That letter gives you a chance to act, to pay off the balance, catch up on payments, or at least know when the car will be gone for good.

Your Right to Redeem the Vehicle

Under A.R.S. § 47-9623, you have what’s called a “right to redeem” the vehicle. This means you can get your car back before it is sold by paying the entire remaining balance on your loan, plus repossession and storage costs.

Note, however, that catching up just on the missed payments is not always enough. Most lenders require full payoff once repossession has occurred. But that right to redeem must be clearly described in the notice they send you after repossession. For example, you owe $7,000 on your loan, plus $500 in towing and storage. You can redeem the car by paying $7,500 before the date listed in the notice. If you pay that, the lender must return your car and release the lien.

Deficiency or Surplus Notice

If the lender goes through with selling your car, they’re required to send you another notice after the sale. This is often called a “post-sale notice” or “deficiency notice.”

That letter must explain:

• How much the car sold for
• How the sale proceeds were applied (e.g., towing, storage, legal fees, loan balance)
• Whether there’s any money left over (a surplus) or
• Whether you still owe money (a deficiency)

Under the law, the creditor has to handle the sale and accounting in a “commercially reasonable” way. This means they cannot just dump your car for pennies to create a bigger deficiency against you. For example, your car sells at auction for $6,000. You owed $8,000, and the lender spent $500 on repossession and $300 on storage. The sale proceeds cover $6,000, leaving $2,800 still owed. The lender must send you a notice saying you owe a deficiency balance of $2,800.

On the other hand, if the car sold for $9,000, the lender must return the $700 surplus to you after paying all costs.

Repossession Affidavit Filed with ADOT

In addition to notifying you, the lender must file paperwork with the Arizona Department of Transportation (ADOT). They have to complete and file a Repossession Affidavit (Form 48-7104) to certify that the repossession was lawful and to transfer title.

This document is required before the vehicle can be resold or retitled. It also ensures that the Motor Vehicle Division’s records show the car was repossessed rather than stolen or abandoned.

Your Rights After the Sale

Even after your car is gone, you are not powerless. If the lender did not follow the car repossession notice regulations or sold your car in an unreasonable way, you can challenge the deficiency balance. Courts in Arizona can reduce or eliminate what you owe if the lender violated the UCC notice requirements.

So, if a creditor fails to send a proper notice of sale or acts unreasonably in how they dispose of the vehicle, you may not have to pay the deficiency at all.

Moreover, if they sold your car without telling you or ignored your right to redeem, you could use that as a defense if they later sue you for the balance.

Time Limits for Deficiency Lawsuits

If the lender plans to sue you for the remaining balance, they have four years from the date of repossession to file the lawsuit. After this period, the claim is barred by the statute of limitations.

This is another reason to keep all repo and notice paperwork, as it may protect you down the line if a collection agency tries to collect years later.

Getting your car repossessed is stressful. You may not be able to stop the procedure once it happens, but you can make sure lenders follow the law and treat you fairly. If you believe your lender did not properly send the car repossession notice or sold your car improperly, talk to a consumer rights attorney to explore your legal options.