Most of us assume that when it comes to something that is going to have such a serious impact as repossessing someone’s car, the law will be followed to the letter.
However, unfortunately there are some finance companies out there that tend to take matters into their own hands, repossessing vehicles without following the prescribed steps. Most of the time, these companies are able to get away with their actions simply because the people they are repossessing the car from either don’t understand the legal position, or don’t have access to any legal advice. Below are the basics on how and when unlawful car repossession can arise.
There are specific circumstances in which a finance company must obtain a court order in advance in order to be able to repossess your car. For example, if your car was repossessed by virtue of a hire purchase agreement and you have paid more than one third of the total price of the car under the agreement then this means that the car becomes protected goods. The consequence of this is that a lender is required to obtain a court order to repossess the car – if they do not then you may well have a valid compensation claim as a result.
Where the value of the car is less than one third paid or if you gave valid consent for the car to be taken then this protection may not be available to you. The relevant section of the legislation is section 90 of the Consumer Credit Act 1974 and this applies to repossessions that have taken place within the last six years.
In addition to being able to claim compensation for an unlawful car repossession, where a car has been taken without a court order in circumstances that require one then you might also be able to obtain a release from the liability in the contract (for example the hire purchase agreement), which effectively means that the debt ceases to exist. Compensation can include the amount you have already made in hire purchase payments to the finance company, as well as the cash received by the finance company if the car was sold on after it was repossessed.
Unfortunately there are some fairly unscrupulous businesses out there when it comes to repossessions and credit agreement defaults. If your hire purchase agreement falls within the above conditions then they cannot take the car without a court order, no matter how loud they shout! If you find yourself in a situation where your car has been repossessed and you don’t think the right process was followed then why not contact one of our team? We might be able to help you get compensation.