Would I have the right to report the vehicle as stolen (grand theft
auto)?
Usually not. See Title 18 of Pennsylvania's statutes. The person in possession is still the owner of the vehicle, so it isn't theft. Theft requires more than a mere breach of a contract. But, for example, if the person obtained the loan with no intent to repay it at the outset, this could be theft.
What would be the appropriate legal steps to recover the vehicle?
To repossess the vehicle pursuant to the Uniform Commercial Code, Article 9, and/or the Pennsylvania Motor Vehicle Sales Finance Act, which generally allows you to repossess a vehicle without legal process, when allowed under the lien agreement and the borrower is in default, if this can be done without a "breach of the peace." What constitutes of "breach of the peace" for these purposes can be a contentious as applied to particular facts. The Motor Vehicle Sales Finance Act states in the pertinent part:
Section 23. Repossession.-
A. When the buyer shall be in default in the payment of any amount due
under a motor vehicle installment sale contract or when the buyer has
committed any other breach of contract, which is by the contract
specifically made a ground for retaking the motor vehicle, the seller
or any holder, who has lawfully acquired such contract, may retake
possession thereof. Unless the motor vehicle can be retaken without
breach of the peace, it shall be retaken by legal process, but nothing
herein shall be construed to authorize a violation of the criminal
law.
B. Repossession of a motor vehicle when effected by legal process
shall be made only by a duly constituted public official. Repossession
when effected otherwise than by legal process shall be made only by
the holder, including an official or full time employe thereof, by a
collector-repossessor licensed under this act, by the person, who
originally soldsuch motor vehicle to the buyer under the installment
sale contract, or by any licensed seller or sales finance company,
including an official and full time employe thereof, who is not
regularly engaged in the business of making such repossessions but
occasionally does so as an accommodation for other sellers or finance
companies.
C. When replevin and sale of the motor vehicle sold under an
installment sale contract, or of the collateral security thereto, is
effected by legal process, such proceedings may be commenced by the
holder immediately upon any default or breach of contract by the
buyer. In a proceeding under these conditions the buyer shall receive
such notices, shall have such rights, shall be liable for such costs
of suit and reasonable attorney's fees as provided by the laws
governing such legal proceedings.
D. When repossession of a motor vehicle, which is the subject of an
installment sale contract, is effected otherwise than by legal
process, the holder shall immediately furnish the buyer with a written
"notice of repossession" delivered in person, or sent by registered or
certified mail directed to the last known address of the buyer. Such
notice shall set forth the buyer's right as to reinstatement of the
contract, if the holder extends the privilege of reinstatement and
redemption of the motor vehicle, shall contain an itemized statement
of the total amount required to redeem the motor vehicle by
reinstatement or payment of the contract in full, shall give notice to
the buyer of the holder's intent to re-sell the motor vehicle at the
expiration of fifteen (15) days from the date of mailing such notice,
shall disclose the place at which the motor vehicle is stored, and
shall designate the name and address of the person to whom the buyer
shall make payment, or upon whom he may serve notice. The holder's
notice shall also state that any personal property left in the
repossessed vehicle will be held for thirty (30) days from the date of
the notice's mailing. The personal property may be reclaimed within
the thirty (30) day time period. Thereafter, the property may be
disposed of in the same manner as the motor vehicle and other
collateral. (D amended Dec. 9, 2002, P.L.1446, No.186)
E. When repossession of a motor vehicle which is the subject of an
installment sale contract is effected, otherwise than by legal
process, the buyer shall be liable for costs incurred by the holder in
retaking, storing and repairing such motor vehicle only when all of
the following conditions prevail:
When default exceeds fifteen (15) days at the time of repossession, and
When such costs represent actual, necessary and reasonable expenses incurred by the holder in retaking, storing and repairing the motor
vehicle, excluding any costs incurred in retaking which are charges
for services of persons who are regular full time employes of the
holder, and
When such costs are supported by receipts or other satisfactory evidence of payment, and records of the holder show detailed
information as to nature of each item of expense, the amount thereof,
the date of payment, and to whom paid.
F. The department shall have authority to reduce the amount of or
prohibit entirely any item of expense of retaking, storing or
repairing of a motor vehicle which appears to him to be fictitious,
unnecessary, unreasonable or exorbitant, or such as would not have
been incurred by a prudent person under similar circumstances. (F
amended Dec. 9, 2002, P.L.1446, No.186) . . .
[part G. pertaining to mobile home repossession is omitted]
H. The repossessor of any motor vehicle shall give notice within
twenty-four (24) hours after the repossession to the local municipal
police department having jurisdiction of the area where the vehicle
was located at the time of repossession or, where there is no
municipal police jurisdiction, to the Pennsylvania State Police. (H
added Oct. 16, 1996, P.L.704, No.122)
If this is not feasible, or the lender wants to assurance of a court order to prevent second guessing of the lender's determination that the debt is in default, the lender can bring a lawsuit seeking possession of the vehicle. Historically and in many jurisdictions including Pennsylvania, this action is often called a "replevin" action. In some jurisdictions, it is called a "personal property foreclosure", or an action for "claim and delivery" of personal property. Often this lawsuit would also include a claim seeking a money judgment for a deficiency judgment in the event that the repossessed car cannot be sold for more than the amount owed on the lien in a commercially reasonable manner.
Once the vehicle is repossessed the lender must send a notice to the borrower specifying the date after which the lender will sell the repossessed vehicle — a date that is supposed to be at least 15 days after the date of the notice. Generally, the default on the loan may be cured prior to the sale by the borrower.
