[sys_64738]

The bank uses title of vehicle as collateral. You own the vehicle but allow repossession for failing to clear the debt. But just because the car is repossessed doesn’t clear the debt unless the vehicle covers the debt wholly. Bank will sue for the difference.

[TheOtherHobbes]

The UK has some tricky loan contract law which allows a lender to do this, unless the purchaser challenges it in court it using a very specific procedure - which of course most of the population doesn't know about.

Many people are surprised by this. They assume repossession means the loan is paid off - until they discover they've lost their car and are still on the hook for more or less the current market value.