Do You Have to Notify the DMV if Your Car is Repossessed

It’s one thing for your car to be repossessed, it’s another thing to know what to do in compliance with the state regulations after the repossession is completed.

When your car is repossessed, it is repossessed because you defaulted on your auto loan or lease contract causing the lender to reclaim the vehicle. However, when the car is finally repossessed, what do you do? Do you have to notify the DMV about the repossession?

Yes, if your car is repossessed, it is generally advisable to notify the Department of Motor Vehicles (DMV) about the repossession within 7 days of the repossession is completed to ensure compliance with legal requirements, prevent liabilities, and contribute to a smooth transition of vehicle ownership. 

Do You Have to Notify the DMV if Your Car is Repossessed?

Yes, you are mandated to notify the DMV if your car is repossessed to avoid putting yourself in serious trouble with the law.

Reasons Why You Should Notify The DMV

The reasons why you must notify the DMV after your car is repossessed are:

1. To Ensure Legal Compliance

One of the primary reasons you should notify the DMV is to ensure legal compliance. Different states have varying regulations regarding the reporting of repossessions, and failure to adhere to these rules may result in legal consequences.

In some jurisdictions, it is a legal requirement to inform the DMV about the change in ownership resulting from a repossession. Failure to comply with these regulations may lead to fines, penalties, or legal consequences.

2. Transfer of Ownership of the Repossessed Car

When your car is repossessed, ownership is effectively transferred from you (the borrower) to the lender. Notifying the DMV is a formal way to acknowledge and document this change in ownership. This ensures that the DMV records accurately reflect the current legal owner of the vehicle.

3. Liability Concerns

After repossession, the lender takes possession of the vehicle. If the lender decides to sell the repossessed car, the new owner should not be held liable for any violations, accidents, or incidents involving the vehicle that occurred after the repossession.

Therefore, properly notifying the DMV helps protect the original owner from legal issues arising from the use of the vehicle post-repossession.

4. Insurance Implications

Car insurance is often tied to vehicle ownership. If your car is repossessed, the insurance status needs to be updated to reflect the change in ownership.

Notifying the DMV about the repossession helps ensure that your insurance company is aware of the situation and can adjust its records accordingly. Failure to update this information might result in continued insurance obligations and complications.

5. To Avoid Penalties

Some states impose penalties or fines for failing to report a vehicle repossession within a specified timeframe. By notifying the DMV, individuals can avoid additional financial repercussions. These penalties are typically designed to encourage timely reporting and compliance with state regulations.

6. Preventing Identity Theft

Notifying the DMV of the repossession can also help protect against identity theft. If the lender sells the repossessed vehicle and the new owner fails to transfer the title promptly, there’s a risk that the old owner’s information could be misused. By notifying the DMV, individuals can take steps to safeguard their personal information.

7. Regulatory Compliance for Dealerships

In some cases, dealerships may be involved in the repossession process. They are often required by law to notify the DMV of the repossession. However, it’s still advisable for the original owner to confirm that the notification has been made to avoid any gaps or errors in the reporting process.

When to Notify the DMV

The timing of when to notify the Department of Motor Vehicles (DMV) about a car repossession can vary depending on state regulations and specific circumstances. However, it is generally advisable to notify the DMV as soon as possible after your car has been repossessed.

  • You should notify the DMV immediately after the repossession is completed in case immediate notification (or at least, within 7 days the repossession is completed).
  • If your lender plans to sell the repossessed vehicle, it is advisable to notify the DMV before the sale occurs.
  • If your car insurance is tied to vehicle ownership, it’s important to notify the DMV as well as your insurance provider about the repossession as soon as possible.
  • Notifying the DMV early enough helps to address any issues before they escalate.
  • ‘Lenders may have timelines or procedures for notifying the DMV, therefore, coordinating with them can help streamline the process.


Notifying the DMV when your car is repossessed is a responsible and necessary thing to do because it ensures compliance with legal requirements, helps prevent liabilities, and contributes to a smooth transition of the ownership of the repossessed vehicle.