What Reinstatement Rights Does a Buyer Have for a Second Repossession?
If your vehicle has been repossessed for a second time, you may have limited options to get your car back. If it is a third repossession, you will not be allowed to reinstate.
In most circumstances, the finance company must give a defaulting buyer the right to reinstate--catch up on past due payments and other charges, including repossession fees and charges. That is important, since most buyers do not have the cash to redeem--pay off the entire outstanding contract balance.
But the finance company does not have to give the buyer the right to reinstate under certain circumstances. For example, the buyer has no reinstatement right if he conceals the car so that it can't be found; if the buyer intentionally provided false credit information; or if the buyer abused the vehicle so that its value is substantially impaired.
Importantly, California law also limits the right of reinstatement to once in any 12-month period and twice during the term of the contract. So if your car is repossessed in January and then again in December, the finance company will properly deny you the right to reinstate. That may not seem fair, but that is what California law provides. Be forewarned!
