Lynda Asip bought the car in 1986 for $800, but it went missing soon after she brought it home, KSBW TV reports.
“It's absolutely amazing. After 28 years, I never thought this would come into my life,” she said.
California Highway Patrol found the car earlier this month in a garage in Salinas, where Asip was living when she bought it.
"It’s extremely rare to come across a vehicle that’s been stolen this long ago but it does happen," said Capt. Bill Perlstein. "It is sort of a Christmas miracle and we’re really happy to give her her car back."
Asip ordered personalized licence plates for the Mustang — LYNDA67, for the year she was born — but the car was stolen before they arrived.
On Monday she was finally able to put the plates on the car, 28 years after it was stolen.