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Nine Out Of 10 Car Loan Defaulters Keep Car According To Latest Figures PDF Print E-mail
Friday, 13 November 2015

Leading recoveries law firm, Ascent, has revealed a significant increase in the proportion of customers who have avoided having their car repossessed after falling behind on their vehicle loan.


The latest findings from Ascent follow in-depth analysis of over 2,000 rehabilitation visits of UK car drivers that it has engaged with and who have missed payments on their car loan.

During the first three quarters of 2015, only 10% of loan defaulters had their car repossessed. Out of the 90% of those who were able to keep their car, 62% came to a financial arrangement to bring their arrears up to date within an acceptable time frame. In 25% of cases the arrears were paid off in full whilst 3% paid the entire loan off.

David Whittaker, Chief Operating Officer from Ascent said: “The landscape of the motor finance market is changing. Driven by the FCA’s ‘Treat Customers Fairly’ principles, we have seen a shift away from the short and sharp collection and recovery practices of the past. With change comes an opportunity to consider what options and measures are appropriate to manage a variety of ever present challenges, arrears management being one.

“Repossession and shortfall collection activities are still necessary tools of the trade. However, they are now being complemented or replaced by extended periods of forbearance and customer rehabilitation visits.

“Reconnect and rehabilitation visits now play an extremely important role within today’s collections and customer outcomes environment. The focus being the assessment of a customer’s current financial situation where important factors as vulnerability and affordability can be discussed and captured.”

Ascent, which was the first major debt recovery law firm to achieve full FCA authorisation, has a national team of employed field agents that specialise in the rehabilitation of motor loans.

David added “Given the sensitive nature of this kind of interaction with customers, almost always in their homes, it’s important that trained professionals with the necessary skill set are chosen to deal with these instructions professionally and compliantly.

“Reconnect and repossession are two very different things and should be managed separately by specialists at different parts of the collection cycle. Reconnect and rehabilitation visits can prevent escalated actions such as pre legal collections and repossession.”
 
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