What happens if my car is stolen while I’m still paying finance?
What should I do if my car is stolen?
First things first, let’s have a look at what you need to do if your car is stolen. May seem obvious, call the police and call your insurer, right?
Well, yes, but there’s a bit more to it than that. And we suspect that if you’ve never had the pleasure of being the victim of a car thief, you’ll have no idea! So, if you walk outside to where your car should be, and find an empty space instead, first make sure your wife/husband/child hasn’t taken it without you knowing. If they haven’t, you should call the police and report it stolen.
If it’s not an emergency, which is probably won’t be, don’t use 999 – use 101 instead. When you get through, ask for your local police station. Of course, if you believe it is an emergency, use 999.
Have the car details to hand, like the registration, make, model and colour. If there are any modifications that would make it stand out, such as spoilers or unusual alloys, tell the police about those too.
The police will give you a crime reference number. Make a note of this, as you’ll need it when you call your finance and insurance companies to report your car stolen. The police will inform the DVLA of the theft, and if your car is found again, so you don’t have to worry about that.
Road tax refund
If your car is not found within a week, you can call the DVLA and ask for a refund of your road tax. You can do this by filling in a V33 form, that you have to obtain by writing to the DVLA, at their Swansea, SA99 1AL address.
If you had a private registration on the car, you can ask that it’s transferred to another car, but there are some conditions:
• a year must have passed since the car was stolen
• you must have reported it to the police and have the crime reference number
• you must have a letter from your insurer that shows they are happy for you to have the number plate moved to your new car
• the car must have been on the road at the time of the theft, by this we mean it must have been taxed, with a current MOT
Telling your insurance company
Next you need to call your insurer and let them know. It’s crucial that you do this as soon as you can, as the quicker you get the ball rolling with any claim, the quicker it will be resolved and a payout made. Then you can get on with the more interesting task of finding your replacement car.
From the time you contact your insurer, and as long as they have all the details they need, they have 3 months to settle your claim. If they need further information from you, the claim may take longer.
However, this usually only happens if you’re claiming for an accident, and there’s some debate about who is to blame, or something like that, rather than the car being stolen. When the car has been stolen you should only need to give them the crime reference number to prove your case.
What you may find is that your insurer wants to wait to see if the car is recovered. If they decide not to do this, and pay you out for the car, then it’s later recovered, they’ll keep it.
Your insurer should pay out what you would have been able to get for it, had you sold it. If this happens, you should call the DVLA and let them know that you’ve been paid out. To do this you need to fill in a V5C/3 form, which is a ‘notification of sale or transfer’ part of your V5C registration document. Along with this, you’ll also need to send a letter stating when you were paid out, how much you were paid and the name of your insurance company. Then you need to send the rest of your V5C to your insurance company.
If you don’t have this because you were asked to send it to your insurance company and you’ve already done that, it’s okay, just tell DVLA. Give them your insurance company’s details, the date of your claim, your registration number, make, model and colour, in a letter and don’t forget to sign it.
If you’re not happy with the amount they want to give you, you can challenge it. This would be the same process as challenging the amount being offered for a write-off, which we’ve covered in this blog.
What happens to the policy, once a claim for a stolen vehicle is made, depends on which insurer you’re with. Some will end the policy, others won’t and you’ll have to keep paying your premiums until the renewal date.
Telling your finance company
Now it’s time to let your finance company know. With the details you’ve already gathered for your insurance company, you now have all you need to inform your finance company too.
This is pretty straight forward really. Just call and give them the crime reference number you’ve been given by the police. You will have to continue paying your finance instalments while your claim is settled by the insurance company. If your car is later found and returned to you, you’ll need to get a letter from your insurance company confirming this.
If your car is not recovered and returned to you, you should pay off the amount still remaining on your finance with the insurance payout amount. Once that’s done, your agreement is finished and you’re free to start a whole new agreement for a new car.
Sometimes the amount you’re given by the insurer is not enough to cover what’s owing on the car finance. If this happens to you, the first thing you should do is check your policy to see if you were sold a Guaranteed Asset Protection policy.
This will probably have been sold to you as GAP insurance and pretty much does what it’s called – it plugs the gap between what you’re offered as a payout amount by your insurance company and what’s still owing on the finance. It should stop you being left out-of-pocket.
If you don’t have GAP insurance, you may end up having to pay the difference yourself.
Okay that’s all you need to know about what’ll happen if your car is stolen while you’re still paying finance.