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.

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.

What to do if your car has been repossessed

Contact your creditor
As soon as you know you cannot pay your debt contact the creditor and let them know. Remember, they can’t help you if they aren’t aware of your situation.
Ask for financial hardship consideration
Ask for reduced payments, reduced interest or additional time to pay due to financial hardship. Legally, creditors must consider your request.
Return secured property
If possible, return the property if you can no longer make the repayments. Although you will still be responsible for the balance of the debt, it may be less if the property has been returned.

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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Contact us today to organise a meeting with one of our financial counsellors.

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