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Repossessed car or goods

Act fast and get help to avoid repossession

Page reading time: 3 minutes

When you borrow money to buy a car or other goods, that loan is often secured against an asset (for example, the car). If you fall behind on your repayments, the lender may take the asset back (called 'repossession') and sell it.

In this situation, the faster you act, the more chance you will have of keeping your car or goods.

If you receive a default notice, do not ignore it. Talk to your credit provider or get free legal advice immediately.

When your car or goods can be repossessed

A credit provider (lender) can't repossess your car or goods without a court order if you owe less than:

If you owe more than this, they can repossess your car or goods, but only if:

Your car can't be repossessed if it's parked on your property — this includes your garage and yard. If your car is parked on the street, it can be towed away.

Credit providers can only come onto your property with your written consent or with a court order.

What to do to avoid repossession

Act quickly and you may be able to avoid repossession. You can:

Pay the amount owing

This can be either:

Ask for a hardship variation

If you're willing to pay back the loan but don't have the money, ask your credit provider for a hardship variation. They may offer you:

You can also ask your credit provider to postpone legal action.

Make a complaint

If you can't reach an agreement, contact the Australian Financial Complaints Authority (AFCA) to make a complaint and get free, independent dispute resolution.

Get your car or goods back after repossession

If you want to get your car or goods back, it's important to act quickly.

Within 14 days of it being repossessed, the credit provider must send you a notice including:

For 21 days after sending that notice, the credit provider can't sell your car or goods. You have a chance to get it back if you pay:

During those 21 days, you might find someone who will buy the car or goods for at least the estimated value. If you do, give the buyer's details to the credit provider in writing.

If your repossessed car or goods have been sold

If you don't pay or make other arrangements during the 21-day period, the credit provider can sell the car or goods. They have to sell it for the best possible price.

After it's sold, the credit provider will write to you stating:

If there's an outstanding balance, you need to pay it immediately. If you're in financial hardship, ask the credit provider to set up a repayment plan.

Where to get help

Talk to a financial counsellor

Financial counsellors offer free, independent and confidential help to people with money problems. They may also negotiate with your credit provider for you.

Get free legal advice

If you're facing legal action, you can get free legal advice from community legal centres and Legal Aid agencies.

Woman standing with her arms crossed.

Eva's car is repossessed

Eva takes out a personal loan to buy a new car. When she loses her job, she falls behind on repayments and the bank repossesses her car.

The bank estimates the car's value at $15,000. Her parents offer to buy it at that price. So, with Eva's agreement, the bank sells the car to them.

With repossession and sale costs, the outstanding balance on the loan is $18,000. After the $15,000 from the sale is deducted, Eva still has to pay the bank $3,000.