What does an orange tag on a car mean?

An orange tag on a car typically indicates that the vehicle has been impounded or repossessed. There are a few key reasons why a car might have an orange tag:

Vehicle Impound

If a car is illegally parked, involved in a crime, or has racked up too many unpaid parking tickets, it may be impounded by the city or police department. Once impounded, an orange tag is placed on the car identifying it as impounded property. This serves as a warning to others not to tamper with or try to remove the vehicle. The orange tag will include information such as the impound lot location, fees owed, and instructions for recovering the impounded vehicle.

Common Reasons for Impound

• Unpaid parking tickets
• Parked illegally (fire hydrant, handicap spot, etc.)
• Involved in a crime
• Abandoned on public property

To get an impounded car back, the owner must pay all outstanding fines and fees. This often includes the impound lot’s daily storage fees, which can quickly accumulate to hundreds or thousands of dollars. Failure to claim an impounded vehicle after a period of time (e.g. 30 days) can result in the car being lien sold at auction.

Vehicle Repossession

If the owner of a car falls behind on loan or lease payments, the lender (bank, credit union, etc.) may hire a repossession company to retrieve the vehicle. Once repossessed, an orange tag is affixed to the car identifying it as repossessed property.

The orange tag serves to:

• Notify the owner the vehicle has been repossessed due to defaulted payments
• Warn the public not to tamper with or try to remove the vehicle
• Display information such as the recovery company’s name, contact info, and storage location

To get a repossessed vehicle back, the owner must repay the full auto loan balance or reinstate the lease. This typically also includes repossession and storage fees charged by the recovery company. If not claimed, the vehicle can be sold by the lender to recoup their losses.

What to Do if Your Car Has an Orange Tag

If you return to your parked car and find an orange tag on it, remain calm. While frustrating, remember that tampering with or removing the tag can result in criminal charges. Follow these steps:

1. Read the information on the orange tag carefully and completely. It will explain why the car was impounded or repossessed.
2. Contact the agency or recovery company listed on the tag. Ask what specific steps are required to recover your vehicle.
3. To retrieve an impounded car, be prepared to pay all unpaid tickets, fines, and storage fees.
4. For a repossessed car, you’ll need to repay the loan/lease balance and any repo fees to reinstate or redeem the vehicle.
5. If you cannot afford to recover the vehicle right away, ask if you can retrieve any critical personal belongings from inside the car such as medication, cash, or keys.
6. Consider seeking legal advice if you believe the impound or repossession was done unlawfully or in error.

Act promptly, as storage fees and interest charges can quickly snowball. Immediate action gives you the best chance of recovering your car affordably.

Avoiding Vehicle Impound or Repossession

Getting your car back after impound or repossession can be expensive and time-consuming. Here are some tips to avoid it happening in the first place:

• Pay parking tickets promptly – Letting tickets go unpaid risks getting your car impounded, so deal with them right away.
• Avoid illegal parking – Never park in spots where you could get towed like fire hydrants, handicap spaces, or reserved lots.
• Stay current on car payments – Make loan or lease payments on time every month. Contact your lender immediately if you anticipate having trouble making payments.
• Review loan terms – Be aware of the consequences for missed payments, as many loans allow repossession after just 1-2 missed payments.
• Look for payment assistance – If money is tight, ask your lender about hardship programs or temporary reductions in payment amount.

A little planning and diligence goes a long way in keeping your car payment-free and tag-free.

The Repossession Process

vehicle repossession may seem sudden or unexpected, but it is the end result of an extensive recovery process. Here are some key phases:

Notice of Default

The lender sends a “Notice of Default” indicating you have fallen behind on payments and owe immediate payment in full to avoid repossession. This gives you a last chance to become current on the loan.

Right to Cure

Many states have a “Right to Cure” period allowing you a few days to bring the loan current by paying past due payments, late fees, and repo fees.

Surrender Request

If the default is not cured, the next step is a request to voluntarily surrender the vehicle. If you do not surrender, repossession may proceed.

Repo Authorization

The lender authorizes a repossession company to retrieve the vehicle. The repossession agents may work quickly to get the car before payments resume.

Vehicle Recovery

Agents locate and repossess the vehicle and affix a warning tag. The car is towed away to a secure holding lot.

Redemption Period

For a certain window of time, you still have the right to get the car back by reinstating the loan and paying repo fees.

Sale Proceedings

If unclaimed, the lender can sell the car to recover their investment. You are responsible for any loan deficiency.

Knowing the general repossession procedures can help you act quickly to cure the default or redeem the vehicle before time runs out.

Legal Protections

While lenders have broad powers to repossess vehicles, laws do provide important rights and protections for consumers:

Notice Requirements

Lenders must send advance notice of default and intent to repossess. This gives a “right to cure” opportunity.

Redemption Period

Borrowers have a window of time after repossession to get the vehicle back by becoming current on payments.

Deficiency Limits

If the repossessed vehicle is sold for less than the loan balance, some states limit the “deficiency” amount the lender can seek from the borrower.

Bankruptcy Protection

Filing bankruptcy may temporarily halt repossession and allow the debtor time to repay the vehicle loan as part of bankruptcy proceedings.

Exemptions

Certain property like work tools or a vehicle below a value threshold may be “exempt” from repossession under state laws.

Consult an attorney to understand your specific rights. Violation of legal protections may invalidate the repossession.

Alternatives to Repossession

Before defaulting, discuss options with your lender for avoiding repossession:

Reinstatement

Pay the loan fully current by paying all missed payments, penalties, and fees.

Payment Plan

Agree to a temporary reduction or deferral of monthly payments until you overcome difficulties.

Loan Modification

Adjust the loan terms – changing payment amount, interest rate, or extending the repayment period.

Voluntary Surrender

Return the car to the lender in good condition in lieu of forced repossession.

Refinance

Get a new loan with better terms from a different lender and use it to pay off the troubling car loan.

Ask the lender to explore these options before they resort to repossession. It can save you money and avoid damaging your credit.

Impact on Credit

Having your car repossessed or impounded can severely hurt your credit standing for years:

Payment Delinquency

Missed payments leading to default are recorded on your credit history.

Collection Account

The unpaid loan balance is typically sent to collections, further damaging credit.

Judgments

The lender may obtain a legal judgement against you for the unpaid balance, which publicizes the money you owe.

Credit Score Drop

Excessive missed payments, defaults, and collections can cause a large decline in your credit score.

A poor credit score makes it harder to qualify for loans, rentals, utilities, and jobs. Be sure to start re-building your credit right away after a vehicle default.

The Cost Impact

Beyond wrecked credit, having your vehicle repossessed or impounded can hit you hard in the wallet:

Cost Type	Example Estimate
Towing/Impound Fee	$200+
Storage Fees	$20+ per day
Tickets/Fines	$100+ per citation
Penalty & Late Fees	$100+
Repo/Auction Fees	$300+
Loan Deficiency	1000s of dollars

These costs can snowball the longer action is delayed. Move quickly to minimize the financial damage as much as possible.

Retrieving Personal Property

If your car is impounded or repossessed, any personal property left inside is also seized. Here are some tips for retrieving your belongings:

Check the Orange Tag

It may provide instructions for picking up personal items from the vehicle.

Call Right Away

Contact the number for the impound lot or repo company promptly to ask about property retrieval.

Request an Inventory

Ask for a written list of the property found in the car so you know what items were present.

Bring Identification

To claim property, you’ll need to show valid photo ID and proof of vehicle ownership.

Take Precautions

Carefully inspect and document condition of items returned to ensure nothing is damaged or missing.

Reclaim any valuables, essentials, or irreplaceable items right away so they are not lost, sold off, or disposed of.

Fighting Repossession

If you believe your vehicle was wrongfully repossessed, you may have grounds to fight the repossession:

Improper Notice

Failing to receive proper notice of default or intent to repossess may invalidate the repossession.

Payment Dispute

Evidence you are actually current on payments could halt the repossession attempt.

Bankruptcy Protection

Repossessing a vehicle after bankruptcy protection has been filed violates federal law.

Breach of Contract

The lender may have violated loan terms, state laws, or debtor protections against repossession.

Wrong Vehicle

Mistaken repossession of the wrong vehicle provides grounds for legal action.

Consult an attorney to discuss your options. You may be able to sue and recover money damages, have the vehicle returned, and have adverse credit reporting corrected.

Avoiding Vehicle Theft

While rare, it’s possible for nefarious parties to try to disguise vehicle theft with bogus orange repossession tags. Here are tips to avoid vehicle theft:

• Park in busy, well-lit areas rather than isolated spots.
• Use visible deterrents like steering wheel locks or brake pedal clamps.
• Install a vehicle locator system allowing real-time tracking if stolen.
• Consider home surveillance cameras to record any suspicious activity near your parked vehicle.
• Never leave a running vehicle unattended with the keys inside.
• Watch for people lurking near cars or checking for unlocked doors.
• Call police immediately if you see someone driving your car without permission.

An orange tag alone should not be considered proof your vehicle was lawfully repossessed. Take precautions against outright vehicle theft or illegal seizure of your assets.

Conclusion

An orange tag on a vehicle is bad news, usually indicating impoundment or repossession. While upsetting, act quickly and strategically to minimize financial and credit damage. Understand your consumer rights and explore options to recover the car or fight back against wrongful repossession. With cool-headed, prompt action, you can resolve the situation as affordably and painlessly as possible.