When it comes to automobile repossessions, many creditors just can't seem to get it right.  There are times you may want to voluntarily surrender your vehicle, but you should consult an attorney before doing so.  In many cases, you do not want the repo agent to take your vehicle.

Let's start from the beginning.  To repossess a vehicle, the creditor first has to have taken and received a security interest in the vehicle.  A promissory note alone does not create a God given right to repo your vehicle--even if you are late on the payments.

You have to be in material default under the loan agreement.  I have seen repos where the only "default" is moving a vehicle out of state (or the creditor thinks the vehicle is going to be moved out of state).  Unless the financing agreement prohibits moving (and that provision of an agreement may not even be enforceable), you are not in default for moving out of state with your vehicle.

You must actually be behind on your loan payments.  For some reason, creditors do not always have the best accounting procedures.  Repos do occur when a consumer is not even behind on payments.

If your loan is a Consumer Credit Transaction under Iowa law, or if the lender uses a financing agreement that states the loan is a Consumer Credit Transaction, you are not in default until a payment is ten days late.  Creditors do repo cars when payments are only a few days late.  That does not make the repo legal.

In a Consumer Credit Transaction, you are entitled to one right to cure notice a year. The right to cure notice has to be a proper right to cure notice.  A right to cure demanding money you do not owe is not proper.  A typical mistake is to damand payment before a payment is in default (remember the ten days noted above?).

A repossession cannot result in a breach of the peace.  A breach of the peace occurs, for example, when a repo agent threatens to shoot you (don't laugh, it happens).  Other examples would be taking your vehicle from your garage or taking your vehicle over your unmistakable objection.  Shouting and yelling almost always is a breach of the peace.  Remember, however, your vehicle is not worth loss of life, injury or prison. 

Police cannot facilitate a repo.  A police officer has every right to make sure the parties do not harm each other and to keep the peace.  A police officer is not allowed to take sides in a repo.  You have as much right to your vehicle as the repo agent.  Tell the officer politely that you will do whatever you are instructed to do, but you are not consenting voluntarily to the repossession of your vehicle (if that is the case).  If the officer requires you to give up the vehicle over your objection, contact an attorney as soon as possible.

Once your vehicle has been repossessed, you still have certain rights.  You have the right to redeem the vehicle, but now you may be required to pay the full balance owed. 

The vehicle must be sold with notice to you and in a commercially reasonable manner.  Most repossessed vehicles are sold at "dealer only" auto auctions.  There are seriousl questions whether a wholesale auction is a commercially reasonable sale of a vehicle.  There is no question these auctions bring far less money than a traditional sale of a vehicle.  Unfortunately, you are asked to pay the balance of the loan, and you are subsidizing a dealer's wholesale purchase of your vehicle.

The creditor must account for the proceeds of sale.  Unfortunately, at that point you are most likely going to be asked to pay a "deficiency" allegedly owed on the vehicle.  In most circumstances in Iowa, the creditor cannot legally collect the deficiency if the repossession was illegal, there was a breach of peace, or the vehicle was not sold in a commercially reasonable manner.