If you have decided to purchase your new wheels using a hire purchase or lease agreement, failure to keep up with the payments could lead to your bike being repossessed. Although a finance agreement may offer what seems like affordable monthly payments, it doesn’t take much to fall behind if you lose your job, or suffer a drop in income for whatever reason.
In this scenario, the lender is quite within their rights to take back possession of the bike, if you have not met your obligations in regard to regular payments. You may think that because you purchased the bike and paid the deposit that you own it, but in reality, you are simply leasing it until such time as the finance has been paid off. Although you are the registered keeper of the bike, you are not the owner, and this legal loophole means the finance company can take your bike back if you cannot keep up with the repayments.
If, for whatever reason you have recently had your beautiful bike repossessed, there may be remedies available to you that can help you to straighten out the debt owed, and most importantly, reclaim your beloved bike.
As sad as it may sound, your lender has zero interest in your bike They are however, very interested in getting as much money back for it as they can. Most finance companies want to be shot of the goods, and will, therefore, send the bike to auction for sale as soon as they possibly can.
After repossession, however, there may be a relatively small window of time for you to pay what you owe and retrieve your bike. The timeframe in which you can appeal to the lender will vary depending on your agreement and their standard procedures.
If you are in a position to clear the debt you owe on the bike or pay off the finance and any interest due, you will be able to get your bike back. Usually, though, this is unlikely as you were probably suffering from financial difficulties in the first place.
The best option is to speak to your finance company as soon as the bike has been repossessed. They may be willing to come to an arrangement with you, but technically, the original agreement is broken and they are not obliged to help you in any way.
Because there is usually a shortfall between the amount the finance company can sell the bike for at auction and the amount you owe, they will still come after you for the outstanding amount. If you are unable to pay this in full, they will usually seek a court order to obtain the outstanding monies from you. In some cases, a lender may be prepared to come to an agreement with you, rather than pursue you through the courts.
Nobody wants to be in debt or to fall short of their obligations and sometimes circumstances are completely beyond our control. If you are having any financial difficulties that mean you may not be able to keep up your repayments, speak to your lender as soon as you can to see if they can help.
Repossession is traumatic, with bailiffs knocking on your door and seizing your bike, so avoiding this should be your primary concern.
Take care when you enter into a finance agreement. They are not a way of obtaining goods for nothing. You have a legal obligation to make your repayments and failure to do so can lead to repossession, county court judgements and can leave you with a credit score so low you will struggle to get credit ever again.