Advice returning car on finance – can they make you pay the shortfall???

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This topic contains 3 replies, has 2 voices, and was last updated by Stuart Masson Stuart Masson 1 week, 1 day ago.

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  • #121842 Reply



    My partner has a car on finance through Black Horse. He rang them and asked them if he could end this as his ex wife has the car as part maintenance but she no longer wants it, they said as he has paid over half then he can send it back at a cost to us and they will send it on to auction.

    However, talking to family and friends who have done this they say that Black horse have gone back to them stating they must pay the “shortfall”. The car my partner has is only worth £2k max and he owes £4k on it. So my question is can they do this??

    Thank you in advance.
    Any help is much appreciated.


  • #122072 Reply
    Stuart Masson
    Stuart Masson

    Hi Sam. If it’s a voluntary termination then the car can be returned as long as you’ve paid 50% of the total amount payable. However, not all car finance agreements have voluntary termination rights so you will need to check your paperwork.

    You also need to be clear that you are voluntarily terminating the contract. If you simply ask to return the car, they will take this as a voluntary surrender, which is a different thing entirely and would mean you’d need to pay any shortfall.

    For more information, have a read of our guide to voluntary termination.

  • #123420 Reply


    Hi Stuart
    I am past the stage where I can terminate my rights to a HP Agreement with Fiat Financial Services. I have paid the 50% required and would like to return the car. I have contacted the finance company and they have told me I need to pay excess mileage. The car was purchased through Arnold Clark, however I was advised by the salesman that the mileage would not be an issue as long as I returned the car prior to the 4 year agreement. This sounds like a PCP deal, however my paperwork is a HP Agreement.
    One paragraph in the agreement does mention excess mileage, however no where does it state the mileage within the agreement.
    I am a little confused about what kind of agreement I have, and do they have the right to charge me excess mileage.
    Thank you for your help and I look forward to hearing from you.

    • #123506 Reply
      Stuart Masson
      Stuart Masson

      Hi Deborah. A PCP is a form of HP agreement, which is why your paperwork says HP.

      The finance company will always tell you that you need to pay excess mileage. However, the legal community is of the majority opinion that they can’t enforce that, and finance companies will not go to court as they know they will almost certainly lose.

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