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Can I end my car finance early?

Yes. If you’ve already repaid more than 50 per cent of your Personal Contract Purchase (PCP) or Hire Purchase (HP) finance you can return your car through what’s called a Voluntary Termination agreement. There are, however, a few other ways to end your finance early…

For more information on financing your new car, read our in-depth Personal Contract Purchase and Hire Purchase guides.

Can I end my PCP finance early?

PCP finance agreements can be ended early if you’ve already repaid more than half the total finance amount – including interest and fees. Sign the car back over to the dealer through a Voluntary Termination clause and you won’t have to make any more monthly payments.

If you haven’t repaid 50 per cent of this amount yet, you can still end the agreement early by paying the difference. For example, if you’ve already paid back £20,000 and the total finance amount is £50,000 – you’ll have to pay an extra £5,000 to reach the magic 50 per cent mark. If you’ve already paid significantly more than 50 per cent back, you won’t receive any refund, however.

If you’d prefer to end your PCP agreement early and still keep hold of your car, you’ll need to call your finance provider and pay a settlement figure. This amount will include any outstanding finance and fees plus what’s called the car’s Guaranteed Minimum Future Value (GMFV) – the amount it’s expected to be worth when your finance term ends. Choose this option and the car will be yours to keep and there’ll be no more monthly payments to worry about.

Whichever option you choose, there’ll probably be administrative charges to consider. These should be outlined in your original contract.

Can I end my HP agreement early?

Ending an HP agreement is similar to wrapping up a PCP deal early. If you’ve already paid back more than 50 per cent of the total amount due, you’ll be able to hand the car back to a dealer in return for cancelling any future monthly payments.

If you haven’t quite repaid 50 per cent yet, you can make up the difference in a similar manner to ending a PCP finance deal early. You won’t receive any refund if you’ve already paid back more, however.

You can also choose to pay off any remaining finance in a single lump sum, called a settlement figure. This amount will cover your remaining finance along with any applicable fees, as set out in your initial HP contract. Unlike PCP, however, you’ll not have to pay the car’s GMFV. Once you’ve paid the settlement figure, you’ll be the car’s legal owner.

Your HP contract will outline if you’ll have to pay any extra fees should you decide to end your finance agreement early.

Can I end my lease early?

Unfortunately, if you want to end your lease early, you may have to pay off your whole leasing agreement – even if you decide to return your car ahead of schedule. If you’re struggling to pay for your lease, it might be possible to extend your agreement to reduce the amount you pay each month. You’ll have to contact your finance provider to negotiate these terms.

Can I end my finance agreement early if I’ve had a crash?

If your car’s been written off or stolen, you’ll need to end your finance deal early. The settlement fees you’ll have to fork our for should be covered by your insurance payout, however. This applies to HP, PCP and lease agreements.

If you’re covered by GAP insurance, you might not have to pay the full settlement fee. Read our in-depth GAP insurance guide for more details.

Save money on your next car

Head over to our new car deals page to view the latest carwow offers or let our car chooser tool narrow down your search. Already picked the perfect car? Use our PCP calculator to get a better idea of how much it could cost per month.

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