Can my car be repossessed? HP and PCP rules
Car finance lenders have strong rights, but the Consumer Credit Act sets firm limits on how and when they can use them.
Applies to: UK-wide
What to do now
- Find your agreement and work out what you have paid against the total price.
- If a default notice has arrived, note the date and contact the lender before it runs out.
- If you need the car for work or family, tell the lender in writing and offer what you can afford.
How repossession works
| Stage | The rule |
|---|---|
| Default notice | The lender must give you at least 14 days to pay the arrears. If you pay in time, the agreement carries on. |
| Less than a third paid | After the notice runs out, the lender can end the agreement and take the car from a road or public place without a court order. |
| A third or more paid | The car is protected goods under section 90. The lender needs a court order to take it back, unless you agree at the time. |
| Entering premises | Under section 92, the lender needs a court order to enter any premises to take the car, however much you have paid. |
If the lender breaks the one-third rule
If a lender takes protected goods without a court order or your consent, section 91 says the agreement ends, you are released from any further liability under it, and you can recover everything you have paid. Get advice quickly and complain in writing.
If the lender goes to court
The court can make a return order, but it can also make a time order letting you pay the arrears at a rate you can afford. If you need the car, reply to the court papers, explain why, and offer what you can afford with a budget from the budget calculator. Court procedure differs in Scotland and Northern Ireland, but the Consumer Credit Act rules apply across the UK.
What FCA rules expect
Lenders must treat customers in arrears with forbearance and due consideration. That means considering options such as reduced payments or a payment break before ending the agreement, and taking your circumstances into account.
Other kinds of car loan
- Personal loan: you own the car, so the lender cannot repossess it. It would need a court judgment and enforcement, like any unsecured debt.
- Logbook loan: secured by a bill of sale, with different rules. Get advice quickly if you have one.
- Personal contract hire: you never own the car. The lease terms set what happens.
After repossession
The car is usually sold at auction. Ask for the sale price and an itemised list of costs. Any shortfall becomes an unsecured debt — what happens if you can’t pay car finance.
You never have to pay for debt advice. MoneyHelper (government-backed), StepChange, National Debtline and Citizens Advice all give free, confidential advice with no obligation.
Common questions
Can my car be taken without a court order?
Only if you have paid less than a third of the total price, a default notice has expired, and the car is not on premises such as your home. Once a third is paid, the lender needs a court order unless you agree.
What if they take my car without a court order after I have paid a third?
Under section 91 of the Consumer Credit Act, the agreement ends, you are released from further liability and you can recover what you have paid. Get advice and complain in writing.
Do I still owe money after my car is repossessed?
Usually, if the sale does not cover what you owe. The remaining shortfall becomes an unsecured debt.