If your car is stolen while on finance, you must report it to the police, insurer, and finance company in that specific order to protect your claim and credit record.
You usually must continue making finance payments until the insurance claim is settled and the agreement is closed.
Summary: If your car is stolen while on finance, you must continue making payments until the insurance claim is settled, after which the insurer pays the finance company, and any shortfall or surplus is resolved.
When a car on finance is stolen, the finance company remains the legal owner until the agreement is settled. This means your comprehensive insurance payout is usually sent directly to the lender rather than to you.
The insurer will pay the current market value of the vehicle, not the amount you originally paid or the total finance balance. If the payout is less than what you still owe, you are responsible for paying the difference. If it is more, the remaining amount is returned to you after the finance agreement is cleared.
Summary: Yes, in most cases you must continue making your finance payments until the insurance claim is finalised and the agreement is officially closed.
Even though your car has been stolen, your finance agreement remains active while the insurance claim is being processed. Missing payments during this period can result in late fees, contract breaches, or negative marks on your credit report.
Once the insurer pays out and the finance company settles the agreement, payments will stop. If you are struggling to keep up with payments during the claim period, it’s important to speak to your lender as soon as possible to discuss temporary support.
Acting quickly helps protect your finances, your credit record, and your chances of a smooth insurance settlement.
Call the non-emergency number 101, unless the theft is in progress or involved violence. You will receive a Crime Reference Number (CRN), which you’ll need for your insurer and finance provider.
Notify your insurer as soon as possible and provide your CRN and vehicle details. Delays could affect your claim. Your insurer will assess the car’s market value and begin the settlement process.
Tell your lender that the car has been stolen and share your CRN and insurance claim reference. They will coordinate directly with your insurer regarding the payout.
Once the insurance claim is settled and the car is written off, you must tell the DVLA that the vehicle has effectively been sold to the insurer.
If you provide your insurance company with all the information they need and the crime reference number to prove your case, they’ll have three months from the date you contacted them to settle your claim. If they need further information from you, the claims process may take a little longer. This usually only happens if the claim is for an accident, and they debate who is to blame.
They’ll review your claim and let you know their decision. If everything goes smoothly, they’ll work with you to get any money you’re owed. If they deny your claim, they’ll explain why and let you know if you can appeal the decision.
Your insurer should pay you the market rate for the stolen car. This is usually the amount you would receive if you had sold the vehicle, considering its age, mileage, and overall condition. If you have a vintage car, they should pay you the valuation that was agreed in your insurance policy.
If you’re unhappy with the amount your insurer offers you, you can challenge their decision.
Summary: If the insurance payout is lower than your outstanding finance balance, you must pay the shortfall unless you have GAP insurance.
Because insurers pay market value, it’s possible for a finance balance to be higher than the payout, especially in the early years of an agreement.
If you have GAP (Guaranteed Asset Protection) insurance, it is designed to cover this difference. Without GAP insurance, you are responsible for paying the remaining balance to the lender. Some lenders may offer payment plans to help manage the shortfall.
Summary: If the insurance payout exceeds what you owe, the finance company will settle the agreement and pass the remaining money back to you.
This situation is known as positive equity. Once the finance agreement is cleared, any surplus funds belong to you and can be used toward a replacement vehicle or other expenses.
If your car is stolen and you don't have insurance, you should act as quickly as possible and do the following:
If your car is stolen without insurance, you will still be responsible for repaying the finance balance in full, as there is no insurance payout to settle the agreement.
Summary: If your car is recovered before the insurance payout, it may be returned to you; if it’s recovered after payout, the insurer usually becomes the legal owner.
If the police recover your car before the claim is settled, your insurer will inspect it to assess any damage. If it is deemed roadworthy, it may be returned to you.
If the car is found after the insurance company has paid out, ownership usually transfers to the insurer, even if the vehicle is later recovered.
Summary: Yes, if you believe the insurer’s valuation is too low, you can dispute it and escalate the complaint if needed.
You can provide evidence such as recent sale prices for similar vehicles, service history, or independent valuations. If you’re still unhappy after complaining to your insurer, you can escalate the matter to the Financial Ombudsman Service, which can review the dispute independently.
Summary: The police usually notify the DVLA initially, but you must update them once the insurance claim is settled.
After the insurer pays out, the vehicle is treated as sold to the insurance company. You must update the DVLA using your V5C logbook or by writing to them if you no longer have it. This also allows you to claim a refund for any full months of unused road tax.
Summary: Yes, if your car is not recovered, you can usually claim a refund for any full months of remaining road tax.
Once the claim is settled, you can apply for a refund through the DVLA. Refunds are typically issued for complete months only, not partial ones.
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A stolen car on finance should not affect your credit score as long as you continue making your finance payments while the insurance claim is being processed.
If payments are missed during this period, it could result in late payment markers or defaults being recorded on your credit file. Once the insurance payout is made and the finance agreement is settled, the account will be closed as normal.
If your financed car is never recovered, your insurance company will usually treat it as a total loss and pay out the market value of the vehicle.
That payout is sent to the finance company to settle the agreement. If the payout does not cover the full finance balance, you are responsible for the remaining shortfall unless you have GAP (Guaranteed Asset Protection) insurance.
Yes, you usually still have to make finance payments even if the theft was not your fault.
Finance agreements are not fault-based. Payments normally continue until the insurance claim is settled and the agreement is officially closed, regardless of how or why the car was stolen.
Insurance claims for stolen cars typically take up to three months to be settled, although some claims are resolved sooner.
Delays can occur if further information is required, if the car may still be recovered, or if there is a dispute over the vehicle’s valuation. Your insurer should keep you informed throughout the process.
Yes, your finance company may be able to offer support while the insurance claim is being processed.
This can include explaining your obligations, liaising with the insurer, or discussing temporary payment arrangements if you are experiencing financial difficulty. You should contact your lender as early as possible to discuss your situation.
If your stolen car is recovered damaged, your insurance company will assess whether it can be repaired or should be written off.
If repairs are approved, the car may be returned to you and your finance agreement will continue. If the car is written off, the insurer will pay out the market value and the finance agreement will be settled in the usual way.
No, a finance agreement cannot usually be cancelled simply because the car has been stolen.
The agreement remains active until the insurance claim is settled and the outstanding balance is paid, either by the insurer or by you if there is a shortfall.