What Happens If a Car on Finance Is Stolen?

If a car on finance is stolen, tell the police, your insurer and your finance company straight away, and keep making your payments. If the car is not recovered, the insurance payout goes to the lender first to settle the agreement. Anything left over comes to you, and any shortfall is yours to pay.

Who do I need to tell, and in what order?

1. The police. Call 101 and ask for your local police. Have the registration number, make, model and colour ready. You will be given a crime reference number. If the theft is happening in front of you, call 999.

2. Your insurer. Give them the crime reference number and tell them the car is on finance. Policies usually require you to report a theft promptly.

3. Your finance company. On hire purchase or PCP the lender owns the car, and most agreements require you to tell them about a theft.

The police tell DVLA about the theft, and tell them again if the car is found. The official steps are on GOV.UK: what to do if your vehicle has been stolen.

Do I still have to make the finance payments?

Yes. The agreement carries on until it is settled, so keep paying while the claim is dealt with. Missed payments can be recorded on your credit file. If the payments become difficult, speak to the lender early rather than letting one bounce.

What happens to the insurance payout?

If the car is not recovered, or is recovered too badly damaged to repair, the insurer pays its market value at the time of the theft, less your excess. That money goes to the finance company first.

• If the payout is more than the settlement figure, the balance is paid to you.

• If it is less, you owe the lender the difference.

If you think the insurer's valuation is too low, you can challenge it with evidence of what similar cars are selling for.

What if the payout does not clear the finance?

This is the situation GAP insurance is designed for. Depending on the type of policy, it covers the gap between the motor insurer's payout and either the finance still owed or the price you originally paid. If you have a policy, contact the GAP provider before you accept the motor insurer's offer, because many policies require that.

If you have no GAP cover, ask the lender how the shortfall can be repaid. See our guide to negative equity for how these shortfalls arise.

What do I need to do with DVLA?

• If the insurer pays out, you must tell DVLA the vehicle has been sold to the insurance company. You can do this online or with the V5C log book.

• Your vehicle tax is cancelled once DVLA has been told you no longer own the vehicle, and any full months left are refunded automatically.

• If the car had a private registration, you can apply to get it back if you reported the theft to the police and the car had a valid MOT and vehicle tax when it was stolen. If the car is not found, there is a six month wait before the number can go on another vehicle. GOV.UK has the details.

Common questions

What if the car is found after the insurer has paid out?

Once a claim has been paid, the car normally belongs to the insurer. Ask your insurer what your options are if you would like it back.

Will I get a courtesy car?

It depends on your policy. Many courtesy car benefits apply to repairs rather than theft, so check the wording or ask your insurer.

Can I take out finance on a replacement car?

You can apply once you know where you stand with the old agreement. A new application is subject to status and affordability checks, and a lender will take any shortfall you still owe into account.

Need a replacement car in Barnsley?

anycolourcar.com is a used car dealer and service centre in Barnsley, South Yorkshire. When your claim is settled you can browse cars in stock, read about finance or call Sales on 01226 574410. Our guide to car security covers ways to make the next one harder to steal.

We are a credit broker, not a lender. Finance is subject to status and affordability checks.

This guide is general information, not financial advice. Updated October 2026.