Car impounded? No insurance?

If you have bought your car with the help of a finance agreement with payments still outstanding, and it is now in a police pound, you should get legal advice. The precise situation between yourself and the finance company depends upon just what is in the contract that you entered into, and only a qualified lawyer who has read this agreement can advise you of your rights and liabilities.

There is a lot of difference between a situation in which you own the vehicle but have a loan from a finance company, and one in which you have entered into a high purchase agreement, and will only own it after the last payment has been made.

If your car has been impounded because it was suspected of being driven by someone who was not insured to drive it there is a real possibility that it could be confiscated completely by the police and either crushed for scrap or sold at auction. If it is subject to a finance or hire purchase agreement then it is possible that they will inform the company involved themselves and it is not unusual for someone to contact a pound to get their car back only to find that it has already been collected by the finance company.

If they did collect it they would have had to have paid the impound fees themselves. At the vey least they will probably want this back from you, plus their costs, and may even terminate the hire purchase agreement.

How does this leave me, legally?

This is something that you need to get legal advice about. It is common for car finance agreements to contain a clause stipulating that the vehicle is kept comprehensively insured, and that you do not do anything that could deprive the company of their financial interest in the car. If it has not been insured, and is now impounded, both of these may breach that contract and exactly what the finance company is entitled to do will depend upon the exact wording of the agreement.

What if the finance company doesn't know that it is impounded?

There may well be a clause in the contract that you must inform them immediately if the car has been seized by the police or any public authority. You would need to read the contract to check on this. After all, if you cannot get the car back, they may be able to do so.

So what is my next step?

If you can get the car released then you should do so without any delay. You might then decide to keep your head down and continue making your finance payments, on time, as usual. If you cannot, then it is imperative that you take the financial agreement to a lawyer, or at least to a Citizen's Advice Bureau, as soon as possible; certainly well before there is a risk of it being confiscated, and see how you stand legally.

Be aware though that even if you do get the car out you may still have breached one or more important conditions in your finance agreement and there may be repercussions from the finance company. Yet again, legal advice is essential.