Can I keep my car in a Trust Deed?

If you own the car outright

If the car is yours — fully paid, no finance — your trustee will consider its value as part of your assets. In practice, a car of modest value that you genuinely need (for work, family, or because of where you live) can usually be kept. There’s no single fixed cut-off, but a reasonable, essential vehicle is generally treated sympathetically.

If you own a high-value car, its worth may need to be taken into account. Sometimes this is managed by you contributing an equivalent sum, or occasionally by changing to a cheaper vehicle. Your trustee will explain what’s reasonable in your case.

If your car is on finance (HP or PCP)

Most car finance is Hire Purchase (HP) or PCP, where the finance company owns the car until it’s paid off. That means the car isn’t yours to keep or give away as you wish, and the finance is treated separately from the Trust Deed.

If you want to keep the car, the finance generally needs to be maintained and paid outside the Trust Deed. If it’s unaffordable, the agreement can be ended and the car returned, with any shortfall becoming an unsecured debt. We cover this in detail on our car finance arrears page.

Motability vehicles

If your car is provided through the Motability Scheme, it isn’t yours — it’s leased — so it doesn’t form part of your assets and generally isn’t affected by a Trust Deed. You’d continue the Motability arrangement as normal.

What counts as a ‘reasonable’ car?

There’s no official price limit written into the rules; the principle is proportionality. A Trust Deed shouldn’t leave you without transport you genuinely need, but it also isn’t there to protect a luxury asset while creditors go unpaid. A trustee weighs up value, need and your circumstances — so the only way to know where your car sits is to have it assessed.