If I received a letter from a law firm representing a collection agency for a car that was repossessed 4 years ago, what should I do next?
Even if the car was repossessed, that does not end your debt: if the car was worth less or brought in less at auction than the outstanding amount of the debt, you could be sued for the remaining balance and possibly, depending on what was in the financing agreement, for court or legal costs, too (it is legal for them to get those from you, if the contract or financing agreement said they could). The statute of limitations, or time within which to sue to enfore a debt like this, in your state is 6 years, so they would seem to still have to time to take legal action.
You should respond--find out how much they want, see if the number looks reasonable and legitimate, then decide if you are willing to pay it or, better, see if you can't negotiate to a settlement that you and they are both happy with (e.g. that you will pay less than the full amount of the debt to resolve it). If you can come to settlement, make sure it is put into writing.