Representative Example: You could borrow £10,699 over 60 months with an initial payment of £495.89 (including £199 Admin Fee) followed by 58 monthly payments of £296.89 with a final payment of £495.89 (including optional £199 Option to Purchase Fee). Total amount repayable will be £19,012,40. 26.1% APR, annual interest rate (fixed) 13.3%.
What should I do if my financed car is stolen?
Having your car stolen is upsetting and even more confusing if you’re still paying it off through car finance. You might wonder who’s responsible, whether you still have to make payments, or what your insurance covers.
This guide explains what to do step by step if your financed car is stolen, how your finance and insurance providers are involved, and how to protect yourself from being left out of pocket. Whether you’ve got a HP or PCP agreement, this will help you understand your rights and what actions to take next.
If your car is stolen, report it to the police straight away. You’ll need a crime reference number, which is also required by your insurer and finance company. Once reported, contact your car insurance provider and your finance company to inform them of the situation.
Don’t delay, the sooner you report the theft, the sooner the investigation and any potential claims can start. Your finance company will still expect payments to be made while the case is ongoing unless told otherwise.
Yes, you’re still responsible for paying off your finance agreement, even if the car is no longer in your possession. This is because car finance is a loan agreement, you borrowed money to buy the car, and you’ve agreed to repay it in full, regardless of what happens to the vehicle.
If your car is confirmed stolen, your insurance company will usually step in to assess the value of the vehicle and issue a pay-out. That pay-out will often go directly to your finance company to reduce or clear your remaining balance.
However, the insurance pay-out might not always be enough to cover the full amount left on your agreement, especially if your car has depreciated quickly or you’re still in the early stages of your loan. In that case, you’ll be responsible for paying the difference between what the insurance covers and what you still owe.
Most fully comprehensive car insurance policies do cover theft. Once you’ve reported the theft to both the police and your insurer, the insurance company will begin an investigation. If the car isn’t found within a set period, they’ll usually offer a pay-out based on the market value of the vehicle at the time it was stolen.
It’s important to be honest and accurate when answering your insurer’s questions and provide any documents they request, such as your V5C, finance details, service history, and proof of keys. Any missing or unclear information could delay the process.
Keep in mind that the final pay-out might be lower than what you originally paid for the car, especially if the vehicle has depreciated. And if you’re still paying off finance, the insurance settlement may not cover the full balance.
This can happen if your car has depreciated in value faster than you’ve repaid the finance. For example, if you owe £12,000 but your car is valued at £9,000, you’ll be left with a £3,000 gap to pay yourself.
That’s why some drivers take out GAP insurance (Guaranteed Asset Protection). This type of cover pays the difference between the insurance pay-out and the outstanding finance balance.
Without GAP insurance, you’ll need to pay any remaining balance in full or agree a repayment plan with your finance provider, even though you no longer have the car.
It depends on your finance company. In most cases, they’ll expect you to continue making your regular payments until the claim is resolved. Stopping payments without agreement can affect your credit score and may be treated as a missed payment.
That said, you should speak to your lender. Some may agree to pause payments temporarily or help you set up a short-term plan while you wait for the insurer’s outcome. Keeping them informed with the situation, will allow them to offer help and support with your agreement.
If your car is found before the insurance claim is settled, the insurer will inspect it to see if it’s still roadworthy. If the car is damaged but repairable, they may either arrange to fix it or deduct the repair cost from any potential pay-out.
In some cases, recovered stolen vehicles are taken to a police-approved compound. If this happens, the compound will contact both you and your finance provider to confirm that the car has been recovered and removed from the stolen vehicle database.
It’s very important to let your finance company know as soon as you find out the car has been compounded. There may be charges you’re responsible for, such as recovery and storage fees. These costs can build up the longer the car stays at the compound.
Your insurance provider and finance company can usually work with you, to help get the vehicle released. Whether the finance agreement continues or the insurer pays out will depend on the condition of the car and whether the claim has already been processed.
Always keep your lender updated, as they still legally own the vehicle until your agreement is complete.
While you can’t always prevent theft, there are some simple steps you can take to protect yourself if it happens in the future:
These steps won’t stop theft completely, but they can make it easier and less stressful to deal with if it happens again.
GAP insurance is especially helpful. It covers the shortfall between what your insurer pays out and what you still owe on your finance agreement. This can stop you from being left with a debt for a car you no longer have.
