Repossessed Cars: FAQs
When a buyer purchases a vehicle and makes his/her repayments on time as per their agreement schedule there are often no issues and the hire purchase or loan period runs smoothly. However, due to personal circumstances or loss of employment a buyer is often unable to make their repayments and hence run into arrears with the loan company. This can lead to a car being repossessed. Below are some frequently asked questions regarding car repossession or when a car is being respossessed.
1. Where can I buy repossessed cars online?
If you are looking to buy repossessed cars online we would highly recommend Government Auctions UK. This site has agreements with auctioneers and the police services to sell repossessed cars. It is by far the best option on the web with legitimate deals being closed daily.
2. When can a hire purchase company repossess my vehicle?
When you sign a contract agreement with the hire company a time frame is stipulated within the contract based on payments made, this prevents the car being repossessed without a court order if less than a certain amount has been paid. This is sometimes one third of the total payment or in other cases half of the total payment. If you have paid less than mentioned percentage of the total payments and the vehicle is parked on public ground then a hire purchase company has the legal power to repossess your vehicle without going through the lengthy procedure of obtaining a court order.
3. How can I reduce the risk of repossession?
Please note that bailiffs cannot reposess the vehicle if the car is in your drive or on a third parties property. They CAN however take the car if it is parked in the road.
Many people try and trick the car bailiffs by parking the car in the next road. Please note that this a common mistake as the bailiffs always check the surrounding roads and side streets for the vehicle.
4. Does the finance company need to take me to court to get my vehicle?
The only time that court action will precede car repossession is after you have paid the agreed percentage of total payments. eg. one third / one half
5. Will they just take my car without telling me?
No, you will always be given issued first witha default notice for non payment followed by a repossession order. So make sure you open all your post. The repossession notice will allow you at least 15 days to make arrangements to avoid car repossession.
6. I have had a change in circumstances and do not need the vehicle. What shall I do?
The rules and regulations regarding handing back your vehicle depend on how long you have had the car for.
The general rule is that if you have paid more than half of the total amount outstanding then just give the vehicle back and there can be no legal comeback for you or your family.
Always read the terms and conditions of the hire purchase agreement as we have noticed they can somewhat vary.
Always read the small print. Remember theses contracts are drawn up by clever and cunning solicitors who want to make it as difficult as possible for you to cancel the finance contact.
7. I have only had the car for 3 weeks and I have just lost my job, What can I do?
You may be forced to pay expensive early redemption penalties if you want to hand the vehicle back. This amount can vary but the general pattern of what you are made to pay is the difference between the payments already made and half the original price of the vehicle. In addition there may be various administration fees to pay.
8. My friend has offered to buy the car off me even though there is outstanding finance on the vehicle. Can I sell it to him?
It is actually against the law to sell a car if it still has finance on it. Please make sure you always settle outstanding finance before ownership is changed.
9. What are the key factors determining what my monthly regular payments will be?
- Interest rate – normally quoted as the Annual Percentage Rate (APR)
- Repayment Period – terms of loans for cars will normally be in the range of one to three years or can be as high as five for a new car.
- Deposits – can be very low for some schemes such as contract hire or will often be determined by value current be traded in or sold privately.
- Credit checks will be made by lending organisations and you will be asked for personal details including income, loans, bank and credit card details.
- Signing Credit Agreements – there is a legal five-day period for cancelling an agreement following signature. Note that this does NOT apply if signed on the issuing premises.
- Terminating credit agreements – there may be penalties for early termination of a credit arrangement and so read the small print.
10. What advice would you give me on buying a car on finance?
- Decide whether you want to own the car or prefer a hire arrangement.
- Make sure you can sensibly afford repayments.
- Compare interest rates for different schemes offered.
- Check if payment protection insurance is provided in the event of loss of income
- Read and understand the terms and conditions particularly about early termination.
- Sign agreements away from premises as it gives you five days to change your mind.