Repossession and recovery.

In March 2020, Julie borrowed $16,000 from a lender to purchase a car. A couple of months later, Julie crashed the car.

Luckily, when Julie entered into the loan, she had signed up for insurance and a ‘restart waiver’. This meant that the balance of her loan not covered by the insurance claim proceeds was wiped by the lender, so she could start fresh with a new loan.

Julie brought a new car, with a new loan of $20,000 from the lender. Soon afterwards, Julie’s loan fell into arrears. Julie applied for a period of financial hardship which the lender accepted, but once that ended and another few months had gone by, Julie’s loan arrears had ballooned to $3,000.

Eventually, the lender repossessed Julie’s car for non-payment of the arrears.

Julie complained to FSCL.


Julie said the lender had calculated her arrears incorrectly, as she thought she had credit from the first loan which should have been carried over. Julie also said she’d been making some repayments, so she didn’t understand how the arrears got as high as $3,000. Julie said the lender had repossessed her car without warning.

The lender said they had calculated Julie’s arrears correctly and had warned Julie of their intention to repossess the car for months.

The lender said when their repossession agent went to repossess Julie’s car, firstly they started discussions with Julie about a potential payment plan. However, the agent then noticed the immobiliser on the car had been tampered with. Despite the discussions about a repayment plan, the agent decided to repossess the car on the spot since it was deemed ‘at risk’.


We reviewed the account statements for both loans, the loan terms and conditions, and the correspondence between Julie and the lender regarding the credit from the first loan and the repossession.

We found that Julie had a credit of $300 from the first loan which was carried over to the second loan at the outset.  The arrears on the second loan appeared to be added up correctly but we asked Julie to provide her bank statements if she thought any of her repayments were missing, which she declined to. We also asked Julie to let us know if she had any concerns about the affordability of the loan from the outset, but she assured us she had no concerns.

We thought the lender gave Julie adequate warning of the repossession, but they ‘shifted the goalposts’ a few times for her as to what she needed to do to avoid repossession. Therefore, we could see how Julie might have thought the lender wouldn’t actually proceed with the repossession.

Ultimately, we thought the lender was entitled to repossess the car. Julie had admitted her brother tampered with the immobiliser while fixing something else on the car. The lender’s terms and conditions allowed them to repossess the car if the borrower or any other person tampered with the immobiliser.


We told Julie the lender was entitled to require her to pay the arrears before she could recover the car. There were also repossession and storage fees of $800 on the account, but lender offered to let Julie pay these off by a repayment plan of $50 per week on top of her usual repayments.

Julie agreed to this outcome. We tried to get Julie to sign a settlement agreement, but she stopped responding to us.

The lender told us Julie had paid the arrears, recovered her vehicle and started the repayment plan. We closed our investigation of Julie’s complaint given her complaint appeared to be resolved.

Insights for consumers

If your loan is falling into arrears and you think they haven’t been added up correctly, it’s important to talk to your lender as soon as possible to work out what you’re liable to pay.

There are usually further costs associated with repossession, making the debt harder to repay.