Car repossession

Car repossession is a traumatic experience with lasting consequences. This is why it's important to understand your rights and options before it happens. Contact the creditor as soon as you’re aware that you cannot pay, with the aim of setting up a reduced payment amount for as long as you will need it.

If you cannot meet your car loan repayments:

  • Consequence 1: Your car may be repossessed

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

    The creditor will need to go through a legal process in the courts to be able to take your car. This process will take approximately 51 days from the date of issue of the default notice, so you have time to work out a way of making the payments (if possible).

    Do not ignore any letters or communications directed to you. The sooner you can discuss alternatives, the better.

  • Consequence 2: You may have a credit listing

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

  • Consequence 3: You may need to arrange alternative transport

    If your car is repossessed, you’ll need to arrange alternative transport to get to work and other places.

  • Consequence 4: You will incur a debt that must be paid off to cover the remainder of the loan

    You may incur a debt after the sale of your car which you will be responsible for paying. Contact the creditor immediately to set up a reduced payment that reflects what you are able to pay. Prior to repossession, take photos of your car - they may be useful to show its condition before it was repossessed.

What to do to prevent your car from being repossessed

  1. Know your legal rights by speaking with a legal representative.
  2. Before your car is repossessed, check your contract to confirm that your car is secured on the loan, for example held as security.
  3. Store the car in a secure place until you can speak with the creditor. It’s legally harder to repossess a car parked on private property than on the street.
  4. Have a valuation done on the vehicle and take photos to ensure the vehicle is in good condition when/if it is repossessed.
  5. Work out a budget that you are sure you will be able to stick to, then contact your creditor to set up a reduced payment agreement. Keep to the agreement that you set up with the creditor.

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

  1. Keep your car in a safe place while you are working with the creditor or financial counsellor to avoid the car being repossessed.
  2. Take photographs of your car before it’s taken away.
  3. Ask where the vehicle will be stored and when it is likely to be sold.

What to do if your car has been repossessed

Get legal advice
You can contact the National Debt Helpline on 1800 007 007.
Contact the creditor
Contact the creditor as soon as you are aware you cannot pay, with the aim of setting up a reduced payment amount for as long as you will need it.
Talk with a financial counsellor
They will explain the process and the timing of the court proceedings.

Please always seek legal advice if a creditor has informed you that
they are taking action and will be repossessing your car


Here are some free services that may be helpful:

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Looking for guidance?
Contact us today to organise a meeting with one of our financial counsellors.

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