Car finance and repossession

Things can go wrong in life that’s just a plain fact. In the event that something does go wrong with your car finance arrangement, it’s important to know that repossessing your car is the last resort for the finance company. At the same time, we have be honest, in our experience, they are not reluctant to make this move as soon as they can, after they have followed other avenues. That’s why you should do your best to speak to the car finance company (in writing) and come to an agreement should you want to keep the vehicle.

If you are in arrears with your car finance payments, try and work out a way to catch up with your payments by clearing the arrears. A lot of people prioritise the wrong debts, meaning repossession occurs when it didn’t need to. For example, if you have unsecured debts like credit cards or personal loans, these are seen as lower priority than a secured debt like car finance. So, you should always look to prioritise the car finance debt ahead of the unsecured debt as there are no assets attached to the unsecured debt.

We have a separate section that covers handling unsecured debt payment issues. Go through our budget planner to see if you can free up some cash to help clear the arrears. Do not reduce basic outgoings like food in order to pay the arrears as your wellbeing takes priority over any debt.

If you cannot solve this situation with this approach, or your car has been repossessed don’t worry, we’ve got you covered.

Let’s take it step by step below....

If you fall into financial difficulty, it’s not always possible to come to an agreement due to the fact that you simply cannot afford the payments. If this is the case and you do end up having your vehicle repossessed or you are about to, it’s so important to look forward and make sure you are aware of the other possible issues that may arise after the repossession of your vehicle, so that you can protect yourself from them.

You may end up in a situation after your vehicle is repossessed where you still owe money to the finance company. This happens when the sale of the vehicle didn’t cover the outstanding debt you owe. Meaning you have something called a shortfall. This shortfall may include other charges so the amount could be higher than what you believe you owe.

Car finance companies will want all of the money paid back to them and may pursue you aggressively for the shortfall. So, you need to make sure you handle this situation carefully. Our article How to handle the remaining car finance after repossession in the purple box below, will help you understand how to approach the situation. Read through it before you take action.

We totally get the fact that you need a reliable vehicle to get around, not an old banger that keeps breaking down on you. You may think car finance is the route to purchase a new or newish car, so you have that reliability. Having that peace of mind that the car will start in the morning so you can get the kids to school or get to work on time is a big thing.

However, as you may already know, there are risks associated with taking out finance. So, what would we class as alternatives? We’ve thought about this and written an article for you to have a read of that will give you a couple of ideas. You’ll find that in our article Why you should avoid car finance and what could be better options in the purple box below.

Credit can be very easy to access which makes it tempting for a lot of people. Always remember that the vast majority of people who turn to credit, do so because they cannot afford to purchase what it is they want.

If you’re considering car finance its probably because you cannot afford to purchase the vehicle you are interested in outright. If you cannot afford it, should you be even considering purchasing it? This is the question you should be asking yourself!