If you’ve yet to pay off 50% of the loan then you’ll have to make up the difference if you want to hand the car back. You can return it, but you’ll probably have to pay back any remaining money you owe on the contract, so if you still have a year left, then the lender will expect a year’s worth of fees up front.
How can I get out of a car finance agreement?
- Speak to the finance company.
- Pay the settlement figure and sell the car.
- Part-exchange the car for a cheaper new one.
- Use Voluntarily Termination (VT) to end the agreement.
- Use Voluntary Surrender to return the car.
- Speak to the finance company.
- Pay the settlement figure and sell the car.
How do I voluntarily terminate a car loan?
A voluntary termination can be used at any time within your contract, although it is typically done past the halfway point of your agreement. All you need to do is inform your dealership that you wish to use voluntary termination in writing. This can be done via email or through a signed letter.
Is it worth paying off car finance early?
Paying off your car finance early can save you money on interest, but it won’t always be the best decision. It could be worth paying off your finance early if: When you finance a car through hire purchase or PCP, you won’t own the car until you make all your payments, so paying it off early means you own it sooner.
What happens if I end my car finance agreement early?
If you don’t want to keep the vehicle, you can hand the car back, whereupon many people choose to start another PCP agreement. How can I end my PCP early? PCP agreements can be ended early so long as you’ve paid 50% of the total finance amount back to the finance company.
What happens to my credit if I give my car back?
Credit Consequence According to credit reporting bureau Experian, if you give your car back to the lender, your credit report will list “voluntary surrender” next to the account along with any balance you still owe, because the value of your car wasn’t enough to cover your loan.
Can you return a car if you have already repaid your finance?
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.
Why are there termination clauses in car finance agreements?
Voluntary termination clauses in car finance agreements are there to protect consumers. But there’s no doubt that some borrowers will exploit the clause to allow early cancellation of a PCP or HP if the numbers are favourable. Although voluntary termination provides a safety net for consumers, it generally loses the finance company money.
