What happens if I can’t afford to make payments?

Help & Advice

If at any time you are struggling to make repayments, you should talk to the people you owe money to in the first instance and explain the situation. It is not in anyone’s interest for you to default on the borrowing so they should be happy to work with you to create a repayment plan that suits your new circumstances.

If you fall behind with payments with HP, Conditional Sale and PCP agreements, the finance company can take the car back. They will sell it and use the money to repay your debt. If they don’t get enough, you’ll have to pay the difference plus any court costs.

Until you’ve paid a third of the amount owed, the lender can take the car back without a court order unless in Scotland or the car is parked on private property. If you have paid, (or can pay) 50% of the total owed, you can choose to give the car back. You will have to pay for any missed installments due up to the time you end the agreement. You may also find it harder or have to enter into greater dialogue with a lender if you want credit in the future.

With a personal loan, the lender will expect you to sell the car and repay whatever you still owe you are under no obligation to sell the car though. As you own the car already, you can’t hand it back to anyone.

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