Stolen car on finance: what now?

Stolen car on finance: what now?

The only thing worse than having a car stolen, is having a car on finance stolen. If you’re still paying it off, it can feel like adding insult to injury. Thankfully car theft is rare, but it does happen. If it happens to you, try not to panic, there are things you can do to make the whole experience easier to deal with. Grab yourself a cuppa and read on.

What to do if your financed car is stolen?

Tell the police

If your car on finance has been stolen, it’s important to take action straight away. Firstly, report the theft to the police using the non-emergency number, 101. They will let the DVLA know and give you a crime reference number (CRN). Keep this handy as you’ll need to share it with the insurance company and finance provider. Give the police as much detail as possible, including:

  • Your personal details: name, address, contact information, plus the names of anyone else who may have been using your car.

  •  Vehicle details: make, model, registration, age, colour, VIN number, and any other identifying features.

  • Location, date and time of theft.

  • Any further details of the theft or what happened in the run up to it: if the keys were left in the lock for example, any previous signs of a break in or if you witnessed the theft.

  • Insurance details: name and contact details of policy provider, policy number and details of policy.

  • Additional information: proof of ownership, any finance agreement paperwork, vehicle log book (V5C).

    Tell your insurance company

    After you’ve reported the theft to the police, you’ll need to let your insurance company know what’s happened and make a claim. They will ask for your CRN, details about your car and the details of the theft. Be as clear and accurate as you can. Once the insurer has everything they need, they will investigate the claim and contact you once they have made a decision. Make sure the insurance company gives you a reference number for the claim.

    Tell your car finance provider

    After you’ve informed the police and the insurance company, it’s time to tell your finance provider. They will ask for both your CRN and your insurance reference number. You will need to keep paying off your finance agreement while your case is ongoing, unless your insurance policy covers the outstanding balance. (Check the terms of your insurance policy for clarity here, it’s quite a big detail to be found in the small print.)

    If there is a payout, the insurance company will firstly repay the legal owner of the car, which is usually the finance provider. If there is any money left over, that will go to you. 

Stolen car on finance: the legal stuff

Getting all your legal responsibilities sorted as soon as you can means saving yourself any further headaches down the line. If you make sure you’ve done all the paperwork that you are responsible for, you can then relax a bit and let the authorities, finance and insurance companies do their jobs.

Make sure you report the theft of a financed car to the finance company! If you don’t, you will be responsible for paying the outstanding balance of the loan, even if the car is found.

Telling the finance company straight away means that they can work with you and the insurance company to fairly recover the remaining balance of the loan.

Read the small print

Carefully read through your finance agreement paperwork to make sure you are clear on your responsibilities in the case of car theft. Your contract will probably include a section outlining what to do in this scenario. This will include letting the police, insurance company and finance company know about the theft as soon as possible, and to continue paying the finance agreement until the matter is resolved.

Assuming you’ve given the insurance company all the details they need along with the CRN, they will have three months from the date you informed them of the theft to settle your claim. It’s important to be aware that any insurance company settlement won’t be for the remainder of your finance agreement – the insurance company will pay out what they believe to be the current value of the car. In other words, the payout will be equal to the amount you could expect to get if you’d sold the car on the open market. If there is a shortfall between the insurance payout and the amount outstanding on the finance agreement, you will need to pay the difference.

You’ll need to inform the DVLA once an insurance payment has been made. Once it’s settled, you are free to start a fresh finance agreement on another car and put this experience behind you.

GAP insurance

To protect themselves from further financial loss, some people take out something called Guaranteed Asset Protection (GAP) insurance on top of their regular car insurance. GAP insurance is designed to cover the shortfall between any outstanding amount owed on a finance deal and the payout from the insurance company, in the event of a car theft or write off. Check your main insurance policy carefully to see whether it might be worth considering GAP insurance.

Road tax refund

It's worth knowing that if the stolen car isn’t found within a week, you can get your road tax refunded. Contact the DVLA and tell them that this is what you want to do. You can also do this by completing a V33 form. If you pay your road tax (officially known as vehicle excise duty or VED) monthly via direct debit then you won’t get a refund, but you’ll need to cancel any future payments with your bank and the DVLA.

Car theft: what happens next?

A car theft is a traumatic experience and there’s a lot to think about, but there is light at the end of the tunnel.

If your stolen car is found and returned to you, you’ll need a letter from the insurers to confirm this. If the insurer makes a payout and the car is then recovered, the insurance company will take ownership of the car. If your stolen vehicle is never found, the insurance company will settle with the finance provider.


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