Continued missed payments can lead to arrears, damage your credit file and, in some circumstances, repossession of the vehicle.
If you fall behind on your car finance payments, AutoMoney Trust will contact you to understand your situation and discuss the support available. If you are struggling to maintain your payments, it is important to get in touch as early as possible, as we may be able to help you understand your options and prevent your account from falling further into arrears.
Ongoing missed payments may result in default interest, reminder letter fees, and information being reported to credit reference agencies. A record of missed payments could remain on your credit file for up to six years, which may affect your ability to obtain credit in the future.
If car finance arrears remain unresolved, your hire purchase agreement may be terminated and steps may be taken to recover the vehicle. However, under UK law, if you have paid at least one-third of the total amount payable under your agreement, a court order is generally required before the vehicle can be repossessed.
If the vehicle is repossessed and sold, you may still be responsible for any remaining balance if the sale proceeds do not cover the amount outstanding on your car finance agreement.
If you are experiencing financial difficulties, please contact AutoMoney Trust as soon as possible. You can also visit our Existing Customers page for more information.
If you're worried about making your next car finance payment, contact AutoMoney Trust as soon as possible, ideally before the payment is due. Speaking to us early allows us to understand your circumstances and discuss the support or options that may be available before your account falls into arrears. Taking action early can help reduce the impact on your finance agreement and improve the likelihood of finding a suitable solution.
Depending on your circumstances, we may be able to discuss short-term payment arrangements or signpost you to free, independent debt advice if appropriate. Speaking to us before you miss a payment can often lead to better outcomes than waiting until your account falls into arrears.
Missing car finance payments can affect your credit file, result in default interest or other applicable charges, and, if the situation remains unresolved, could put your hire purchase agreement at risk. Acting early may help minimise these impacts and keep your agreement on track.
At AutoMoney Trust, we treat every conversation in confidence and are committed to treating customers fairly. If you're experiencing financial difficulties, we'll work with you to understand your circumstances and explore a suitable way forward wherever possible.
Late or missed car finance payments may be reported to the main UK credit reference agencies and could remain on your credit file for up to six years. This can negatively affect your credit score and may make it more difficult or more expensive to access credit in the future, while keeping your payments up to date can help maintain a healthier credit profile.
A missed payment may affect future borrowing decisions, with lenders potentially offering different terms, higher interest rates, or declining an application depending on your overall financial circumstances. The impact can vary depending on how late the payment is, whether the account returns to good standing, and if arrears continue over time.
If you are experiencing difficulties keeping up with your car finance payments, it is important to contact AutoMoney Trust as soon as possible. Speaking to us early gives the opportunity to understand your situation and discuss what support or options may be available before payments are missed.
Keeping your finance agreement up to date and making payments on time can help maintain a healthier credit profile. For more detail on how lenders review applications, see our guide to credit checks for car finance.
Yes, you may be eligible for voluntary termination (VT) of car finance if you've paid at least 50% of the total amount payable under your hire purchase agreement. Under section 99 of the Consumer Credit Act 1974, customers have a legal right to voluntarily terminate your hire purchase agreement, provided the required conditions are met.
Car finance voluntary termination allows you to return the vehicle and end your hire purchase agreement without making the remaining monthly payments. If you've paid less than 50% of the total amount payable, you may still be able to request voluntary termination, but you'll need to pay the difference before the agreement can be ended.
The vehicle must also be returned in reasonable condition, and any outstanding arrears or missed payments will need to be cleared before the agreement can be concluded.
Choosing voluntary termination on a hire purchase agreement may be recorded on your credit file and could be considered by future lenders when assessing applications. Before deciding whether this is the right option for your circumstances, we recommend speaking to AutoMoney Trust. Our team can explain the process, discuss any alternatives and help you understand the potential impact on your finance agreement.
Car finance can affect your credit score positively or negatively depending on how you manage your agreement. Making regular, on-time payments can help build a positive credit history and demonstrate responsible borrowing, while late or missed payments can negatively affect your credit score and make it more difficult or expensive to access credit in the future.
If payments are not made on time, they may be reported to credit reference agencies, which can lower your credit score and make future borrowing more difficult or potentially more expensive.
When you apply for car finance, a lender may carry out a hard credit search, which appears on your credit file and can cause a small, temporary change to your credit score. This is a normal part of the application process and helps lenders assess whether finance is affordable and suitable for you.
For more information about how applications are assessed, read our guide on Credit Checks for Car Finance.
