Car repossession

What you need to know if your car is about to be repossessed

1. Have a valuation done on the vehicle.
2. Take photos to document the condition of the vehicle when/if it is repossessed.
3. Ask where the vehicle will be stored and when it is likely to be sold.

Consequences of not paying your car loan payments

• Consequence 1: Your car may be repossessed

  A default notice may be issued to the borrower, who has 30 days to respond.

  If you have defaulted on your loan (usually by missing repayments) your creditor will issue you, as the borrower/owner of the car, a default notice. You will then have 30 days to respond to the notice. After the 30 has expired the creditor can take steps to repossess your car, which may require a court order (e.g. if the vehicle is parked on private property and they have not been given written authority to enter and take possession of the car). To better understand your rights, as they apply to your specific situation, you should seek legal advice or call a Financial Counsellor once you receive the default notice.

  If your car is going to be repossessed, take photos of your car - they may be useful to show its condition before it was repossessed.

• Consequence 2: After repossession you may still owe money to the creditor

  The creditor may charge a fee for repossessing and selling your car. Your car my also sell for less than you owe on the loan. This can leave a debt after the sale of your car which you will be responsible for paying.

• Consequence 3: You may have a negative credit listing

  If your car is repossessed, you may receive a negative listing on your credit file for five years. This may affect your ability to successfully apply for credit in the future.

• Consequence 4: You may need to arrange alternative transport

  If your car is repossessed, you’ll need to arrange alternative transport to get to work, the shops and so on.

What to do if your car has been repossessed

1. Get legal advice.
2. Contact the creditor to find out if there is anything you can do to stop the sale of your car e.g. setting up payments, whether they will accept an offer to settle the debt with a full and final payment as in some circumstances, a reduced lump sum may be accepted.
3. Talk with a Financial Counsellor who will explain the process and the timing of the court proceedings. You can contact the National Debt Helpline on 1800 007 007.