When a car is repossessed, the fate of the license plates can vary depending on the state and local laws. In some cases, the license plates remain with the vehicle, while in others, they may need to be removed and returned to the appropriate authorities. 

Understanding the process can help car owners navigate the repossession process and ensure they comply with all legal requirements.

The Repossession Process

• Repossession occurs when a lender takes back a vehicle due to non-payment of the loan or lease agreement.
• The lender typically hires a repossession agent to locate and retrieve the vehicle.
• The repossession agent has the legal right to take possession of the vehicle, but they cannot breach the peace or cause damage to property in the process.

License Plate Ownership

• Typically, the state or local government owns license plates, not the vehicle owner.
• When authorities register a vehicle, they issue license plates associated with that specific vehicle to the owner.
• When the individual no longer registers or owns the vehicle, they must return the license plates to the appropriate authorities, considering them personal property.

What Happens to the License Plates After Repossession?

The fate of the license plates after repossession depends on the state and local laws. Here are some common scenarios:

Plates Remain with the Vehicle

The repossession agent must ensure legal registration and insurance for the car after repossessing it, before bringing it to the lender’s lot or the auction location. In several states, the license plates may remain on the car.

Plates Must Be Removed and Returned

The repossession agent must remove the license plates from the car and return them to the proper authorities in certain states.

For example, in Hawaii, the agent is responsible for ensuring that the plates are returned to the DMV or another approved organization. What Does Hawaii’s License Plate Look Like?

Plates Must Be Transferred to a New Owner

In the event that the car is sold at auction or to a third party, the license plates could occasionally need to be transferred to the new owner. Obtaining new license plates in their name and registering the car are the responsibilities of the new owner.

Plates Must Be Surrendered

The lender might need to turn in the license plates to the DMV or another authorized organization if they don’t sell or give the car to a new owner. The lender is responsible for ensuring that they correctly turn in the license plates and unregister the car from the name of the former owner.

Returning the Plates

• The repossession agent must ensure that they remove and return the license plates to the appropriate authorities.
• You may need to return the plates to the DMV, county tax office, or other designated agency if you’re wondering, ‘What Does An Apportioned License Plate Mean?’
• The agent should follow all instructions provided by the agency regarding the return of the plates.

Consequences of Non-Compliance

• Improperly handling license plates after repossession can lead to legal consequences. These consequences may affect both the vehicle owner and the repossession agent.
• The owner may be responsible for any fees or penalties associated with the improper handling of the plates.
• The repossession agent may face legal action if they fail to comply with state laws. They must also adhere to local regulations concerning the handling of license plates after repossession.

FAQ’s

Do I need to surrender the vehicle title after repossession?

In most states, the repossessor must notify the DMV of the repossession and surrender the title. The previous owner is no longer responsible for the vehicle.

How do I cancel my vehicle registration and insurance after repossession?

Contact your insurance company to cancel coverage and the DMV to determine the process for canceling registration, which may involve returning the license plates.

Can I transfer my license plates to another vehicle after repossession?

You might be able to transfer the plates to a new vehicle. You’ll need to check your state’s laws and probably pay any outstanding fees related to the repossession first.

Conclusion

State and municipal regulations determine the fate of license plates when authorities repossess an automobile. In certain situations, the license plates may stay on the car.In other situations, individuals must take them off and give them back to the proper authorities.

Car owners and repossession agents can navigate the procedure. They can make sure they meet all legal criteria by being aware of it.