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You have the right to recover the vehicle within 10 days of the repossession by paying the balance owed off in full. Here's a link to the Arizona law on repossession: http://www.lawdog.com/states/az/repo.htm. If you can't redeem the vehicle, it will be sold.
There's nothing illegal about them transferring the vehicle so long as it is made available to you if you do redeem the property.
What if he has paid over half of the amount?