New Jersey Repossession Laws

by Lindsay Nixon
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Vehicles purchased with an automobile loan in New Jersey can be repossessed by the creditor when the debtor becomes delinquent or defaults on his loan. Once repossessed, the debtor has 30 days to redeem the car. If the car is not redeemed, it may be sold at auction to cover the balance owed.

Seizing the Vehicle

In accordance with the federal Universal Commercial Code (UCC), creditors may repossess cars without prior notice to the debtor, provided the repossession is done in a manner that does not disturb the peace. However, if the creditor sues the debtor for the purchase price of the vehicle, recovery by repossession is not permitted.

Default & Delinquency Requirements

The point at which a creditor can repossess a vehicle due to a debtor's delinquency varies with each sales contract. The contract for the car and the auto loan should expressly state the grounds on which a creditor can repossess a vehicle for non-payment by the debtor. Typically, repossession occurs after a loan is delinquent for an extended period of time or when the past due balance exceeds a certain amount collectively. Check your sales contract for more details.


Once the automobile has been repossessed, the debtor can redeem the automobile at any time before the creditor sells the car off to cover the balance owed. To redeem the automobile, the debtor must become current on the loan and pay any fees or penalties associated with the late payment and repossession.


In New Jersey, resale is mandatory when 50 percent or more of the purchase price has been paid. If less than half of the purchase price has been paid, resale is optional.

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