Paid over half your car finance?

There is a provision in most regulated agreements that rarely gets explained at the point you would want it. Here is what it is and when it applies.

Understand your options before the dealer explains them

  • What the halfway figure is, and where to find it on your agreement
  • How ending early differs from handing a PCP back at the end
  • What 'reasonable condition' means in practice, and how to evidence it

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What the halfway point actually means

1

It is a statutory right, not a favour

Regulated hire purchase and PCP agreements carry a right to end the agreement early. It comes from the Consumer Credit Act, not from the finance company’s goodwill.

2

Half the total amount payable

The threshold is half of the total amount payable under the agreement, not half the payments made. That figure is printed on your agreement and includes fees and any final payment.

3

The car goes back

You return the vehicle in reasonable condition for its age and mileage. Reasonable condition is the part people underestimate, so it is worth photographing everything.

The questions we get asked most

What if I have paid less than half?

You can still end the agreement, but you would need to bring the total paid up to the halfway figure first. Some people find that cheaper than continuing; many do not.

Does it hurt my credit file?

Ending an agreement this way is recorded. It is not the same as a default, and it is not the same as settling in full either. It is worth knowing which mark you are choosing before you choose it.

Is this the same as handing a PCP back at the end?

No. Handing a PCP back at the end of the term is one of the ordinary end-of-agreement options. This is a right to end it early, part way through.

One email a week about running a car for less

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Understand your options before the dealer explains them

  • What the halfway figure is, and where to find it on your agreement
  • How ending early differs from handing a PCP back at the end
  • What 'reasonable condition' means in practice, and how to evidence it

Free. Choose email, text, or both. Unsubscribe from any message.

Motor Moola is a free newsletter about running a car. Choose how you would like to hear from us.

Your details are stored securely. You can ask to see the record we hold, or withdraw any of these permissions, at any time.