What happens if my car has been stolen while I’m still paying finance?

If your car has been stolen and you're still paying finance, the last thing you should do is panic. Having your car stolen can be traumatic, but there are a few steps you can take to make the aftermath a bit less painful.

Let’s take a look at exactly what you should do if your car has been stolen, and see what the implications are if you still owe money on a finance arrangement.

What to do if your car is stolen

If you suspect your car has been stolen, you should call the police and your insurance company as soon as possible. But, before you do, it’s probably best to make sure there’s not been a mix-up and a friend or family member has taken it without you realising.

If your car has been stolen, it’s time to call the police using the non-emergency 101 number - although it might feel like an emergency at the time, it’s probably not going to be one worth dialling 999 about.

When you call the police, make sure you have some basic details to hand about the stolen vehicle, such as its registration, make, model and colour. If there are any modifications that would make it stand out, such as spoilers, unusual alloys, or a custom paint job, tell the police about those too.

The police will then give you a crime reference number, which you should make a note of. You’ll need to refer to this number when you call your finance and insurance companies to report your stolen car. The police will inform DVLA of the theft, so that’s one less thing to worry about. They’ll also inform DVLA if the car is recovered.

The next step is to let your insurance company know so they can start setting the wheels in motion on any stolen car claim you make. If you’ve bought the car on finance and you’re still making repayments, you’ll also need to inform your finance provider.

Let’s now take a look at what happens when you contact your insurer and finance company about your stolen vehicle.

How to tell your insurance company your car has been stolen

It’s important to let your insurer know as soon as possible that your car has been stolen - the quicker you get the ball rolling with any claim, the quicker it will be resolved and a payout made. Once your payout has been settled, you can get on with the more interesting task of finding your new car.

So long as you give your insurance company all the details they need and the crime reference number to prove your case, they have three months from the date you contacted them to settle your claim.

If they need any further information, the claim may take longer. But this usually only happens if you’re claiming for an accident and there’s some debate about who is to blame.

Your insurer should pay out the market rate for the stolen car. This is the amount you could have expected to get had you sold it, taking into account its age, mileage, and condition. If you have a classic car, they should pay you the valuation agreed in your policy.

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 car write-off. Read our guide to find out what happens if my car is written off while I’m still paying finance.

What happens if your car gets stolen on finance?

If you’re unfortunate enough to have your car stolen while on finance, it’s important to let your lender know as soon as possible. Once the police and your insurer are informed, get in touch with your finance company and tell them about your stolen car using the information you’ve already gathered from your insurance company.

Simply call them and give them the crime reference number you’ve been given by the police, along with any other relevant information they ask for. Importantly, though, you’ll need to keep paying your finance installments while your claim is being settled by the insurance company.

If your stolen car is later found and returned to you, you’ll need to get a letter from your insurance company confirming this. However, if your car isn’t recovered and returned to you, you’ll need to pay off the remaining balance on your PCP finance car loan or HP 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.

If there’s a shortfall in the money you get back and the outstanding amount owed to your finance company, you’ll need to pay this amount. If you’re in this position, speak to the team at Zuto to see if we can find a finance arrangement to suit your circumstances.

My car has been stolen: how to tell the DVLA

Although the police will inform DVLA of the theft, you need to let DVLA know when your stolen vehicle claim has been settled by filling in the V5C/3 part of your V5C registration document. This is registered as a ‘notification of sale or transfer’.

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 insurer.

If you don’t have the V5C because you were asked to send it to your insurance company and you’ve already done that, just explain this in your letter. You should also include the details of your insurance company, the date of your claim, your stolen car’s registration number, make, model and colour.

Will you get a VED refund?

If your stolen car is not found within a week, you can call DVLA and ask for a refund on your vehicle excise duty (VED, also known as road tax). You can do this by filling in a V33 form. To get this form, write to DVLA at the following address: DVLA, Swansea, SA99 1AL.

If you pay VED in monthly installments, you won’t get a refund but will need to make sure you cancel the payments with DVLA and your bank.

What if your car has a private registration?

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

Should you take out GAP insurance?

If there’s a shortfall between the amount you paid for your car or owe on finance and the settlement figure offered by your insurer if your car is stolen, then Guaranteed Asset Protection (GAP) insurance could cover this.

Although this insurance isn’t a legal requirement, it is worth considering if you get car finance to buy a vehicle. It’s also worth checking your policy to see if GAP cover is included, and if not, it might be worth arranging extra cover with your insurance company.

If you want to know how much car finance you can afford, our handy car loan calculator will give you a quick estimate and breakdown of costs without affecting your credit score. And for more help and advice around applying for car finance, give the team at Zuto a call on 01625 619944.

Zuto is a credit broker, not a lender. Representative 20.9% APR.