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Car Repossession

If your car is a security for a loan it can be taken from you or 'repossessed' if you can’t make the loan repayments. This is usually when you are more than two months behind or if the lender thinks the car is at risk of damage.

You may be the registered owner but the lender holds the car as mortgage security. This means you are not entitled to sell it. You are however, able to introduce a buyer to the lender if you know someone willing to offer a good price. The lender does not have to accept this, although if they don't and get a lower price at auction you may have grounds to argue to reduce the outstanding balance.

After repossession by an agent the lender (finance company) will then sell the car to try and recover loan costs. The sale will rarely result in a price that will pay out the loan due to:

  • the cost of repossession being added to the balance
  • the interest payable to the date of sale
  • depreciation of the value of the car
  • the price received at auction is not always the insured value.

You should receive letters and warning notices if your payments fall behind but if you do not respond or offer to pay after payments are missed, then repossession may follow.

The Lender requires a court order or your written consent in order to repossess the car from your property. However, the car can still be repossessed without your consent if parked outside your property or at your workplace.

Help Options:

  • Apply for Financial Hardship Assistance

    Talk to the lender about your financial hardship and ask for hardship support to help you keep the car and manage the payments. It always helps to explain things as early as possible.

  • Contact an Ombudsman

    Contact the Financial Services Ombudsman if the lender refuses a hardship variation to your contract.

  • Offer to return the car yourself

    You can do this if you have decided you just can’t afford to keep the loan going. This avoids extra costs of repossession.


  • Repossession costs you more

    Any Costs involved in repossessing your car ( towing, storage, auction fees ) can be ADDED to the debt you owe! This will also be recorded on your credit file.

  • You may still owe money AFTER repossession

    If the lender sells the repossessed car for less than the loan value, you will still be required to pay out the remaining loan, even when you no longer have the car! However you can seek an affordable payment plan, or see a financial counsellor regarding your options and rights if payment is not possible.

  • Selling the Car may not be allowed

    Before you consider selling the car you must check if the finance company allows it. Even if it is sold, they hold the title and can still repossess from a new owner if the loan has not been paid off.