Generally, after a vehicle is repossessed, the financial institution will sell it at private auction. If the amount the vehicle is sold for at auction is less than the amount still owing on the contract, then the financial institution will assess and try to collect what is called a “deficiency balance.” However, the financial institution is entitled to do this if the post-repossession notice issued strictly complies with California law. Oftentimes it does not and the consumer may have a complete defense to any deficiency balance. This is why it is so important to keep all of your paperwork.