What happens if your car gets stolen on finance?

If your car is stolen while on finance, you're still responsible for the remaining payments unless you have GAP insurance. GAP (Guaranteed Asset Protection) insurance covers the difference between what your insurer pays and what you still owe on the vehicle.

GAP insurance, short for Guaranteed Asset Protection, is designed to help in situations like this. Without it, you must continue making your finance payments until the agreement is fully settled, even if your car is no longer in your possession.

Understanding these details helps you navigate the process smoothly and avoid further stress during an already difficult time.

What to do if your car is stolen

If your car is stolen, stay calm and act quickly. Panicking will only slow you down.

First, confirm that your vehicle hasn't been borrowed by a friend or family member without your knowledge. Once you're sure it's been stolen, you must immediately report the theft to the police. Then, contact your insurance company and your finance provider to inform them of the situation.

Here’s astep-by-step guide to help you through the process of reporting and managing the theft of your financed car.

1. Inform the authorities that your car was stolen

If your car is stolen, call the police right away on 101. Provide them with your vehicle’s registration number and any other identifying details.

Next, describe the circumstances of the theft. Share when and where it happened. Mention whether you witnessed the crime. The more details you provide, the better equipped the police will be to investigate.

2. inform your insurance company your car has been stolen

Once you've notified the police, contact your insurance company to report the theft. Provide them with the crime reference number issued by the police, as you'll need this to proceed with your claim.

Your insurer will request further details, including your name, contact information, and policy number. After you provide the necessary information, your insurer will begin investigating your claim.

3. Let your finance provider know your car has been stolen

Inform your finance provider of the theft as soon as possible. They’ll need details similar to those requested by your insurer, such as your crime reference number, contact information, and vehicle details. They will also require confirmation from your insurer that the vehicle has been stolen.

During the insurer's investigation, you must continue making your finance payments. If you don’t have GAP insurance and the insurance payout doesn’t cover the remaining balance, you’ll be responsible for paying the difference.

4. Inform the DVLA that your car has been stolen

Contact the DVLA to report the theft. Although the police will notify them, you’ll still need to inform the DVLA if your insurance company settles your claim. You can do this online or by post.

Additionally, apply for a tax refund from the DVLA, as this won’t happen automatically. If approved, you should receive your refund within 4 to 6 weeks.

Will you receive a VED refund for your stolen car?

If your stolen vehicle isn’t recovered within seven days of reporting the theft, you may be eligible for a vehicle excise duty (VED), commonly known as road tax refund.

However, if you pay your road tax in monthly instalments, you won’t be eligible for a refund. In this case, contact both the DVLA and your bank to cancel your VED payments.

What happens if your car has a private registration?

If your car had a private registration, you can request for the number to be switched over to another vehicle. However, note that you must meet the following conditions:

• Your car must have been stolen at least one year ago.
• You must have reported it to the authorities at the time and must have a valid crime reference number.
• Your car must have been under MOT at the time it was stolen.
• You must have proof from your insurance company stating that they will allow you to transfer your registration number to another vehicle.

Can a finance company report your car as stolen?

A finance company can only report your car as stolen under specific circumstances.

If your finance company provided an unsecured loan, such as a personal loan, they do not own the car—you do. Therefore, they cannot report the vehicle as stolen. However, if you financed the car with a secured loan, like a Hire Purchase (HP) or Personal Contract Payment (PCP) agreement, the car remains the property of the finance company. In this case, they can report it as stolen.

Other factors, such as how much of your finance plan you’ve repaid, may also influence this. Whether or not a finance company can report a vehicle as stolen depends on the situation.

Сan a finance company report a car stolen for non-payment?

No, a finance company cannot report a car as stolen due to non-payment. If you fail to make your finance payments, this is considered a breach of your finance agreement, but it is not a criminal matter like theft. Instead of reporting the car as stolen, the finance company may take steps to repossess the vehicle, depending on the terms of your finance agreement.

Should you take out GAP insurance?

GAP insurance proves invaluable when there's a shortfall between your insurance settlement and your remaining finance balance. While not legally required, it's worth considering if you can afford it.

This insurance covers the difference between these amounts, providing peace of mind by ensuring you’re not left out of pocket if your car is stolen. It’s worth checking whether GAP insurance is included in your current policy.

While GAP insurance isn’t legally required, it’s a valuable option if you can afford it. If you discover that your policy doesn’t include GAP insurance, you can always arrange additional cover through your insurer.

Get in touch with our brokers

No one wants to think about car theft, and it’s understandable why. It’s a stressful, costly, and sometimes traumatic experience. However, being prepared is essential. After reading this article, you should feel more confident about the steps to take if your car is stolen while on finance.

If you’re interested in exploring car finance options, contact our brokers. At Carplus, we work with a wide range of lenders and car finance companies, offering access to over a hundred car finance deals. Whatever your financial situation or credit score, we can help you find a finance arrangement that suits your needs.