Car Finance

Car finance is covered by the Consumer Credit Act 1974, which states within section 123 that a negotiable instrument cannot be used as payment (same applies to credit cards, but not loans and mortgages). After 90 consecutive days of non-payment, the company can declare your account to be in default, which then becomes a default liability as opposed to a car finance or credit card debt. Therefore, the Consumer Credit Act should no longer apply. The problem is, that it doesn’t automatically become defined as a default liability, as the timeframe after 90 days is at the discretion of the finance provider. So, you need to ensure that the debt has been defined as a default liability and that no more interest is being added to the debt.

That being said, car finance is the MOST difficult to deal with, as the car finance company may very well instruct agents to come and take the car at anytime day or night, so it would need to remain out of site from them when parked at home. If they are unable to locate the vehicle, they often report it to police as stolen, so that you will be pulled over by police, arrested, and the car taken and returned to the finance company. Despite your protestations to police, they will take no notice in regards to your claim that it’s been settled, although they will likely de-arrest you but take the car anyway and tell you to sort it out with the court if you’re unhappy about it.

If you have car finance and you struggle to pay a few hundred pounds per month, my recommendation is that you would issue a promissory note stating that you will pay (for example) £20 per month. Cancel your direct debit, and setup instead a standing order for the £20 per month. That way, they can never classify your account as being in default after 90 days, because the requirement for default is that NO PAYMENT has been made in that time period ✌️❤️✌️