Car Repossession Laws in the UK

Here is all the information you need regarding car repossession laws. Remember, you signed a contract that when you purchased the car. This agreement is mainly is to protect the creditor and give them the rights to repossess the car if the buyer does not pay car installments.

Purchasers must be aware that the bank or creditor can repossess the car if they fail to receive payments on time. The banks repossess the car and resell it to someone else to recover the debt. It's why there are many repossession cars for sale in the market.

Car payment not on time
The most common reason for a bank to repossess the car is the payment not being made on time. Usually, the grace period will be stated in the contract as the bank will accept late payment.

Repossessed cars for sale
In general, the creditors MUST inform the owner the date of the car to resell to the public. However, the owner has the rights to get back the car by paying off all the late payments, storage fees, late charges and tow fees in a given time.

The owner also has the rights to demand the car to be sold.

Personal property in the car
Personal property such as CD player, sport rims, stereo and speakers is not allowed to be removed or to resell when the car is being repossessed. Only items not connected to the vehicle are allowed to be removed.

Hiding the car
It is a crime to conceal the car with the intention to hide it from the creditor under general car repossession laws.

Repairing car repossession credit
The fastest and most efficient way to repair your credit after car repossession is to clear off all negative accounts.

Laws concerning repossession of a car
Laws allow creditors to repossess any cars at any hour without prior notice.

However, the creditor has got no rights to repossess the car recklessly if the owner keeps it inside a closed garage. The creditor has the right to come onto your property to seize the car but not to harm any property. They will have to compensate if they cause any damage or loss and the creditor may lose the rights to seize the car.

Repossession on a car could give you a very bad credit history and stay on your credit report for several years. It is important to read the contract and car repossession laws you are going to sign when buying any cars.

How to Avoid Repossession of Your Vehicle… 

When you take out a car loan, you are agreeing to make all monthly payments on time through the terms listed on your contract. If you end up struggling to make your monthly payment and miss several payments, you could end up having your vehicle repossessed. Not only will you lose your car, truck or motorcycle, but your missed payments will show up on your credit report and severely hurt your credit score. Your account will be in “default” and the bank or financial institution you got the car loan from will have the right to seize your vehicle.

A car bought on hire purchase or conditional sale belongs to the finance company until the payments have been completed.

If you buy such a car, the lender can take it back. You can sue whoever sold you the car, but only if you can find them.

There are only a few exceptions to this. If you were not aware the car was subject to an outstanding hire purchase agreement and bought it in good faith, you may be allowed to keep it. This does not apply to stolen cars or cars which are subject to a hire agreement. Contact Consumer Direct for professional advice on this subject. 

There are companies that can tell you if a car is clear of any outstanding finance deals. You can usually find details of such companies in motoring magazines. If you are buying from a dealer, ask whether this check has already been carried out.

Here are few ways to avoid repossession of your vehicle:

1. Trade in for a cheaper vehicle. If you think you can afford a certain monthly payment, consider trading down to a cheaper car so to reduce your  monthly payment. Talk to your dealer about your options in trading down and determine what your new monthly payment would be. Keep in mind that this strategy will only work if you don’t owe more on the loan than the car is worth.

2. Refinance your loan. Refinancing isn’t always the most cost-effective option when you want to reduce your monthly payment, but it can work for some people. Instead of working with your current bank or their competitor, consider seeking out a refinancing loan package.

3. Contact your bank or loan provider about your financial troubles. If you know you just can’t make your monthly payments anymore – and probably won’t be able to pay that loan in the near future – contact your bank or loan provider to find out what options you do have. Don’t wait for your lender to contact the repo company! Some lenders may be a little flexible when you’re direct and honest about your situation, and they could offer you some alternative payment plans or a different loan package.

4. Consider a lease transfer. If you are leasing your vehicle and can’t afford to make payments, consider a lease transfer, or a lease assumption. You will need to find a suitable person to take over your lease and complete the lease transfer paperwork. This is a fairly simple and straightforward process, and can prevent you from paying the high fees associated with terminating your lease early.

5. Sell the car. If you can get a decent price for your car in its current condition, consider selling it and using the proceeds to pay off a good portion of the loan. Even though you will still have a loan balance, you can continue making very small payments going forward and avoid the negative effects of repossession altogether. Of course, this might be a last resort for most people. You may still need to purchase another car, and will need to either save up enough money to make a cash purchase or get a new loan that you can actually afford.