Legal Question in Real Estate Law in California

An automobile is not real property. Real property involves land, interests in land, and fixtures attached to land. Automobiles are personal property.

California's anti-deficiency laws apply to the foreclosure of security interests in real property, or mixed collateral involving real property. They do not protect borrowers from deficiency judgments involving personal property.

California has a detailed law covering most auto financing. It is known as the Rees-Levering Automobile Sales Finance Act and is found at Civil Code sections 2981 to 2984.6. Reading and understanding the applicable provisions is no quick or simple task. I did note that at one point (at least) it does contain an anti-deficiency provision (2983.3(e)).

The anti-deficiency provision to which Mr. Whipple refers, only applies if the finance company refuses to allow you to reinstate the loan and recover the vehicle. Under Rees-Levering, you have a right to come current on the loan and get your car back for a period of time. During that time, the lender must allow you to reinstate the loan and redeem the car if you pay current on the loan, plus any repo fees, etc. Under section 2983.3(b) there are certain circumstances under which the lender does not have to allow you to redeem the car if they believe you have done certain things, including if you tried to hide it from the repo people, or were using it in a criminal enterprise that might get it seized by the government, etc. Under section 2983.3(e), the lender cannot obtain a deficiency if they exercise the right not to allow redemption, unless they meet the burden of proof that you actually violated 2983.3(b). Other than that, you are completely liable for any deficiency if you fail to redeem the vehicle and it sells at auction for less than what you owe.