Car finance: Voluntary termination of a PCP or HP

A guide to voluntary termination of your car finance agreement. What legal rights do you have?

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Voluntary termination is one of the most misunderstood aspects of PCP car finance, so we’ve put together this comprehensive guide to explain your right to end your agreement early if you need to. 

We have previously explained the ins and outs of settling a PCP early, but today we’re looking at a different option for ending your PCP before the end of your contract.

We will look at a consumer right that is built into every regulated personal contract purchase (PCP) and hire purchase (HP) car finance agreement – your right to voluntary termination (VT).

This guide will explain what a voluntary termination is, why it exists and how to go about cancelling your agreement by VT. We’ll also answer a couple of the most common questions about voluntary terminations:

Voluntary termination may be an option to prematurely end your PCP or HP car finance agreement

What is voluntary termination?

Voluntary termination of a PCP or HP is the legal right of a borrower (you) to cancel your finance agreement early and walk away in certain circumstances. Car finance companies don’t like it, plus it is usually explained poorly (or not at all) by dealers. Luckily for you, The Car Expert is here to help!


Often people’s circumstances can change over the course of a car finance agreement, that leave you unable to make your monthly finance payments. You might lose your job, your personal circumstances can change in different ways, or other unforeseen factors might make it difficult to keep up with your monthly car payments.

Depending on the circumstances, you may be eligible for voluntary termination of your car finance agreement with nothing more to pay and no penalties.

Your legal right
UK law provides you with the right to voluntarily terminate a regulated HP or PCP agreement (Consumer Credit Act 1974, Section 99). Your contract documentation will detail your rights.

The law is there to protect consumers who can no longer afford their monthly payments. Equally, it provides protection to finance companies to ensure borrowers can’t simply walk away from their obligations at any time. It does this by setting the minimum repayment amount at 50% of the total amount payable (which we’ll explain shortly).

Exploiting the safety net
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. Usually, you haven’t paid off enough to cover your car’s depreciation, so the finance company is taking back a car that is worth less than the outstanding finance amount.

Understandably, finance companies do not like this one bit. But there is nothing they can do to stop it as the law protects your termination rights.

There is a lot of confusion about voluntary termination, and that suits the finance companies just fine.

The reality is if you do voluntary termination properly, they can’t stop you. What’s more, voluntary termination will not affect your credit score or credit rating. However, some finance companies may decline any further finance applications from you.

How voluntary termination works

You can end your agreement and return your car to the finance company as long as:

  • You repay 50% of the Total Amount Payable (not the total amount borrowed, as you need to include interest and fees, and not half of your scheduled monthly payments)
  • There are no damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)

Assuming you have complied with both of the above, you’ll have nothing further to pay.

The Total Amount Payable is the total amount borrowed plus interest and fees. It also includes the Guaranteed Future Value (GFV) on a PCP. This means that you usually don’t reach the voluntary termination point until very late in a PCP agreement. It is not simply the halfway point of your agreement, as that is unlikely to be anywhere near the 50% repayment point on a PCP.

For a regular hire purchase (HP) agreement, you will usually reach the 50% repayment point about halfway through the agreement.

The Total Amount Payable and termination amount must both be clearly shown on any applicable car finance contract, so you should be able to find it easily enough. You must pay off the termination amount specified to enact a voluntary termination of a PCP or HP.

It makes no difference if you bought your car new or used; the law is exactly the same for both.

The second point relating to damages is somewhat vague and confusingly written, and we’ll look at how that affects you when your VT your finance agreement below.

Voluntary termination of a PCP or HP: Where do I start?

There are a few problems you may run into when trying to exercise your termination rights.

Firstly, finance companies and car manufacturers generally dislike voluntary termination and would prefer the clause be removed from the law. You can expect them to show little interest in helping you.

Often, this means they’ll try to drag the process out as long as possible. Also, they may try to make you do a lot of running around. This is because, until you terminate the agreement, they can keep charging you.

Secondly, the damage clause is a little vague. It states that there must not be any “damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”, but there is no definition of what that means, or what constitutes “normal wear and tear”.

As a result, the finance company can and will try to claw back money from you. They will charge you for damage that would not be considered “reasonable care”, and will often use this clause as an excuse to try to pin you for excess mileage.

Usually, this involves threatening letters and large invoices for minor scratches or excess mileage. There will often be various forms and legal jargon to try and scare you into paying up.

LegalBeagles has some excellent advice about documenting your car’s condition with dated photographs to prove it is in “reasonable” condition when you hand it back.

Finance companies cannot charge you for excess mileage (which we will cover in more detail on the next page), although you can be sure they will try.

Thirdly, if you have defaulted on your loan prior to your attempt to terminate the agreement (ie – missed payments), they can potentially refuse to allow it.

If you want to terminate your PCP or HP, plan it in advance. Keep paying your monthly bills until you can exercise your termination rights. The rules are very different if you are terminating the agreement from a position of strength, rather than the finance company cancelling the contract and claiming costs because you have missed payments.

If your financial position is looking wobbly, it is better to be decisive and act early. If your situation collapses and you are no longer able to pay your bills, you may well end up unable to terminate your car finance agreement either. You may have to go down the path of Voluntary Surrender, which is very different to Voluntary Termination (see below).

Luckily, there are some good resources around like this one from LegalBeagles. It contains a template letter you can send to your finance company.

Voluntary termination, not voluntary surrender
Be clear in your language and do not get sidetracked by anything unrelated. Specifically, point out that you are exercising your legal right to voluntarily terminate your car finance agreement as set out in your contract and the Consumer Credit Act 1974.

This is important so that the finance company can’t accidentally or deliberately misconstrue your termination for voluntary surrender, which is a very different thing and something you don’t want to do.

Under a voluntary surrender, you give back the car but still owe whatever is left to pay. The finance company will sell the car at auction (adding on extra costs for collecting and disposing of the vehicle) and then come after you for whatever you still owe.

This is pretty much a worst-case scenario, as the finance company will still be chasing you for money even though you’ve already given back the car.

You don’t have to sign forms or other documentation
Simply send them your letter (email is acceptable, but recorded delivery is better) and stick to your guns. Do not fill out any “Voluntary Termination packs” they send you, even if they insist that you have to. You don’t – it’s a trap to get you to sign away your legal rights.

Leases do not have voluntary termination rights

There are many types of car finance, and not all of them are equally protected. If you have a lease (such as a contract hire or operating lease), then you are more limited in your options.

It’s expensive getting out of a lease early, and there is limited support available to help you. You are simply renting the vehicle, with no intention of eventually owning it. As a result, you are not covered by VT rights like you are with a PCP or HP.

If you are a private borrower financing your car from a manufacturer finance company, you’ll generally have a PCP or HP. Therefore you should have voluntary termination rights to end your agreement.

Lease agreements (usually a form of contract hire) are usually preferred by business users. However, a number of finance companies are now promoting personal leasing for private individuals. This is partly due to the absence of voluntary termination rights in a lease.

If your agreement has voluntary termination rights, they will be clearly spelled out in your contract. Make sure you understand what type of finance agreement you are being offered before you sign on the dotted line.

Next page: Will a VT affect my credit rating? Can I be charged for excess mileage?

For the best independent and impartial car finance advice on the internet, always check with The Car Expert:

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Stuart Masson
Stuart Masson
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.

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  1. Obviously it’s not something to be taken advantage of – as you point out – but useful information well presented in an even-handed way. Great resource!

    • Hi Stuart,

      I have recently sent Mercedes finance a letter to end my hire purchase agreement under the half rule.
      I’ve recieved a letter back asking me to sign a voluntary termination confirmation before they will give me a date for collection. I’m very hesitant to sign this but they said I can’t end the agreement without signing and returning the letter. Any suggestions?

    • Hi Danny. No, you are not required to sign their forms. As long as you have given them written notice, you have done all you need. If you have a look at the forums at, they are adamant that you should definitely not sign the Mercedes forms, as you may be agreeing to charges that you should not have to pay.

    • Hi Stuart, was hoping you could help me, I have paid more than 50% of my car and now in a position that I want to give it back, but I am 25,000 miles in excess of which it states in my contract that I would have to pay 11p/mile?? Iv calculated this which it comes to just over 2.5k?? I mean my car has been kept in emmaculate condition? Do I need to pay this?? Even if it is in my contract?

    • Hi Zul. As stated in the above, excess mileage is a hotly debated issue for voluntary termination. Most legal experts agree that you can’t be charged for excess mileage on a voluntary termination, but you can bet that the finance company will come chasing you for that £2,500 regardless. You will probably have a fight on your hands to avoid paying it, but if you are prepared to have that fight then you should win it eventually.

      However, if you are that far over your mileage allowance, it’s probably not an accident and I’m wouldn’t be surprised if the finance company is pretty pissed off with you and prepared to fight you to reclaim at least some of the mileage charge.

    • Hi Stuart, thanks for the reply, I guess I will have a fight on my hands, does this mean being taken to court? Or will it involve a lot of letter exchanging? Also, do I get an invoice from the finance company for the excess charges or do they invoice me instead? Additionally, if I don’t pay back the excess mileage would this affect my credit score? Finally, once I have given the car back am I within my rights to terminate my direct debit with the finance company via bank straight-away? Or do I have to wait direction from the finance company? Thanks again for your help

    • In terms of how to deal with any dispute with the finance company, you will need legal advice which we are not in a position to provide. As a start, I would recommend visiting, which is an excellent forum for consumer advice. However, if it comes to threats of legal action then you may well need to engage the services of a solicitor.

    • Thanks Stuart, I have actually registered with legalbeagles and is in fact much more helpful with a lot of people willing to help, thanks again

    • Yeah, they are generally excellent and are experts in consumer rights & consumer law. Like this site, they are impartial and independent, and purely exist to help people. Even when the law is on your side, it doesn’t mean dealers and finance companies will play nicely, so so it’s good to have assistance to work through your issues.

    • Hi Stuart
      I got a brand new car on finances from Ford on the 1st of May I’m paying it over 3 years, within a week of picking it up I got a new job and a company car and now I’m not driving the new car at all its just sitting on my drive and its only done 300 miles on the I’m being tax on my company car so I’m paying for 2 cars is there anyway I can give the car back to Ford?

    • Hi Xenia. Nope, it’s all yours. You can sell it and settle the finance, but you will lose thousands. Alternatively, you could try to renegotiate your job package to pay cash in lieu of a company car.

    • hi stuart , i have only 3 months left to end my contract , ive just put in a VT, forms have come back , and they are saying unless i sign them i cant end the agreement with them ( mercedes)
      plus are now saying i have a shortfall of 552.01 … but it was sold to me to pay a higher monthly instalment for the mileage of 15,000 per year , so that stands the car in 45,000 miles , however today it is at 35, 000 , obviously 10,000 under , so surely that stands for something …. confused .

    • Hi Rebecca. You don’t need to fill in any of their forms, as Voluntary Termination is your statutory right and you you only need to give them clear written notice. If you choose to fill in their forms, be aware that you may be signing away some or all of your rights.

      Secondly, you cannot claim a reduction in the VT amount because your mileage is less than expected. The VT amount is 50% of the Total Amount Payable under the agreement you signed, and the figure should be written into your finance contract.

    • I had no knowledge of voluntary termination until I went into a garage and looked to
      Part exchange my vehicle. As it turns out as I was £3,500 I’m minus equity to do a part exchange. When I purchased my original vehicle I had no idea about finance or credit and didn’t have a good credit score. At the time I didn’t even know I had a bad deal.
      I had paid well over half of my HP finance agreement at this point and found a car that I liked. The garage said that I had a good credit rating and that they could offer finance for the car I liked. But when it came down to the deal the finance company rejected the minus equity. I was advised to do a voluntary termination. They seemed trustworthy and to be looking out for me say it would save me £3500 on top of my finance. I believed this whilst checking on multiple times that it wouldn’t affect my credit. They reassured me constantly that this is my legal right and it would have no impact.
      I did this sent all the proof they required that this was in action . Once you take these steps you cannot go back! As soon as I provided this info, the finance company came back again adding another 600 to my original deposit and said that cause I was filling a voluntary termination I was a risk and added an extra 50 to the proposed monthly payments! Be careful anyone thinking that this does not affect credit! It does, dealers will use it against you to back you in a corner!

  2. I am getting my new car on finance tomorrow and and using my old car as part payment. My old car has recently had battery issues. Will this effect the deal?

    • Hi Chris. It depends on 1) whether the battery problems were there when the dealer originally appraised the vehicle, and 2) whether they notice while checking it over tomorrow. Realistically, the chances are that they won’t look too closely, you’ll sign the car over to them and drive off in your new car, and they will have to sort it out. If they are sending the car to auction, they probably won’t care too much. If they are going to keep it and sell it themselves, they may get a but grumpy, but there’s not much they can do once they have signed for it.

  3. I am vt a car which i have paid more than half of sent a letter off today to terminate agreement , even though they said on the phone i had to get a pack sent out from them and fill it in . Speaking ti them on the phone they said i have to pay nearly 2,000 pounds in excess millage as it states in contract but i thought this only applied if i fullfilled the contract not vt , and how can that superceed cca 100 ? Any help

    • Hi Lizzyanne. As the article states, there is no provision in law for the finance company to charge you for excess mileage when you VT a car. Given that your mileage is significantly over your agreed value (by what, 20K miles?), they’re understandably peeved that your giving back a car that is worth much less than they were expecting. They will certainly try to recover whatever they can from you (and they can get you for damage, for example), but they can’t charge you for excess mileage. Doesn’t mean they won’t try, though.

    • Hi stuart thanks , Yea it seems they had millage at 5k per year Ive done just above average at about 13 , would this stand up in court though if i vt under cca 1974 where as Long as Ive paid half and taken resonable care it says i should have nothing more to pay i dont see 13k per year as unreasonable . There is dsmage to bumper and i do expect to pay for this but not millage

    • I can’t advise what may or may not stand up in court; you would need to speak to a lawyer and refer to your contract. They would argue that you should take responsibility since you signed a contract based on 5,000 miles per year, but the law does not provide for them to charge for excess mileage. As I see it, they would have to make an argument that the condition of the car is worse than would be expected for fair wear and tear based on 5,000 miles per year.

    • Hi , i got a pack from finance co to sign and send back , not doing though already sent à letter stating was doing vt and quoted cca 74 and section 100 sent sd so know they recieved . Thé pack they sentout says requires sig and sent back wants you to sign saying you will pay any excess millage , trying to catch people out .

    • I was wondering what the outcome was with the excess mileage invoice after you VT your car ? I am in similar situation as yourself at present – many thanks

    • Hi Stuart,
      I hope you can help :) I’m thinking about voluntary terminating my PCP contract with MINI Finance, I understand this doesn’t affect your credit rating but it does state on your history that a VT has been made, with no reason as to why it has been done.
      My question is, would this affect any mortgage or loan applications in the near future?
      Also, I’m thinking of going with Nissan and having a PCP with them, would VT’ing my PCP with Mini affect this too?

    • Hi Luke. VTing your car should not affect any mortgage or loan applications, or a PCP application with another car finance company – it’s your legal right, not a default.

    • Yes, you should be able to. For example, if you have paid 40% of the total payable, you can pay an additional 10% to bring you up to your 50% and then voluntarily terminate. The only thing that may prevent this is if your agreement does not allow you to pay any additional payments or overpayments, but that would be very unlikely.

  4. I’m about to sign a PCP contract for a used car from Evans Halshaw. I asked the salesman to send me an example set of terms and conditions so I can be sure what I am getting myself into. He told me he’s emailed me a contract from another customer and just blocked out all the personal information. He seems to have done this with paper/post-it notes and if I tilt my screen I can clearly see he’s actually covered up all MY personal info!!! I plan to use the halves rule and just end the contract after I’ve paid off the necessary 50%. The contract has me down as doing 6,000 miles a year – I realistically do around 10-12,000. I specifically asked the salesman if having more mileage than this would mean I’d have to pay any excess mileage charges. He assured me that I wouldn’t.
    Now, in the covered up part of the contract, I can see it clearly states that if I “end the contract early (I assume this includes the halves rule), the maximum total mileage (6,000 miles P/A * 48 months agreement) will apply in proportion to the reduced period of hire and your obligation to pay any Excess Mileage Charges will accrue immediately prior to termination. Accordingly, if the vehicle’s mileage exceeds the adjusted Maximum Total Mileage you will have to pay the Excess Mileage Charge for depreciation for each mile covered in excess of the adjusted Maximum Total Mileage”. I think the salesman is trying to pull the wool over my eyes coz he called me to say he’s desperate to rush the sale through. What do you make of it? TIA

    • The salesman is clearly not being entirely honest with you, as you can deduce from the fact that he’s lying about the contract info (incidentally, there’s absolutely nothing wrong with them e-mailing you a copy of the contract you would be signing, as you have the right to take it away to read before signing anyway – so no idea why he bothered to cover it up at all…). The law makes no provision for excess mileage if you are voluntarily terminating as described in the article above, only for damage beyond normal wear & tear. The LegalBeagles links in the article point towards people with plenty of experience in this area, and are well worth a read.

    • Thanks for the quick response! I know the law makes no provision for it, but it seems to state clearly in the contract I would sign that they will charge me??!?!

    • They will quite probably try, and some finance companies will send official invoices and try to intimidate clients into paying – they are trying to recoup their losses, since you are returning a car worth considerably less than they expected. But they can’t actually make you pay for excess mileage, unless you have damaged the car beyond what would be reasonable wear & tear for the contracted mileage.

    • Thanks again for the quick response. I don’t like how the salesman has tried to pull the wool over my eyes tbh. Looking at the payment details he has also covered up, he made no mention of the £149 acceptance fee added on to the first payment….it all feels a bit too wishy washy for me. Its a car a really really really want, for a pretty decent price and am reluctant to pass it up :/

    • If I did decide to back out of this deal, would I be able to get my deposit back? I paid £200 on my credit card plus an additional £105 for them to retain and then move my private plate from my current car (which I planned on part exchanging) and then placing on the new car? I can’t imagine they’d have any grounding to deny me the £105 back, but where do I stand with the £200? TIA

    • The £105 is a DVLA fee to put your current number plate on retention. Chances are, this would have been actioned (since it can take up to 4 weeks to go through, moving at the DVLA’s snail-like pace) and therefore you won’t get your money back. But since you will need to do this anyway, you haven’t really lost anything. As for the £200, that’s a matter of negotiation. Clearly they have been deceiving you and you have evidence of this. If they try to be difficult, you can kick up a fuss and you should eventually get it back.

    • Depends – did you sign a V317 form for the number plate to be retained? It is perfectly normal for a dealer to arrange this on your behalf, but they would have to have your V5 (plus MOT) and your signature on the form to do so.

    • I haven’t signed anything at all to do with transferring the plate. All I did was pay for it in anticipation of the transfer

    • Well that was pretty easy…called up the salesman to say I’d known the finance contract was in fact my own. He said he wasn’t sure of the data protection implications of emailing out the contract so blanked it out (albeit unsuccessfully). I told him I just wanted to walk away as the contract wording was very dubious and its too much hassle. He agreed to the full £305 refund, took my card details over the phone and that was that :D.

    • Hi again Stuart…just a quick update on the situation. It has been over a week since the salesman promised me a full refund of the deposit and DVLA fee over the phone and lo and behold, my credit card has not been refunded at all. I called up the dealer today to speak to him, but was told he was on holiday and was asked if he (the guy on the phone) could assist me. I explained the situation and he went to speak to the manager and came back quickly with the response “you’re not getting it back”. When I said I should get the £105 back, as this is separate from the deposit for the car, he replied that usually they ask for a £500 deposit, to which I countered that was irrelevant. I recorded the original call with the salesman where he promised the refund and will try and use that as leverage (legally you’re allowed to record a phone call without telling the other person as long as it is for personal use ( Things may get sketchy when it comes to passing that recording on to a 3rd party who wasn’t on the call, but we’ll see. I’m gonna try calling again tomorrow and if no luck, I’ll go straight to the head office.
      I wonder if there is any consumer credit law protecting me as I paid via credit card?

    • I would definitely recommend talking to your credit card company to see if they can assist. There are certainly provisions in the event of technical problems if you have paid with a credit card, but I’m not sure how helpful they will be if you want your deposit back on a car you haven’t bought. And you should certainly go to their Head Office and set out your complaint against their dealership, as they should be able to assist (although it will depend on the exact ownership of the dealership). You can also speak to the finance company to complain that the dealer is mis-selling the finance, which has significant implications for both the finance company and the dealership. Failing all of that, you can complain to the Financial Conduct Authority regarding the dealer’s practices in the selling of finance. Essentially, if you make enough noise they should eventually give you the money back to get rid of you.

    • I phoned my fin co today to say id already sent a letter to vt ( copied from this site) and im not signing the vt pack they sent me to sign ( this states i will agree to pay excess millage) she said they needed this and i quoted the cca 74 where you write to people you are making pymt too , she then said she will use my letter as long as im agreeing to their terms of canx which i said i wasnt ( calls recorded) i told Her they cant claim excess millage and that i knew my rights , she continued to say it was in my terms and i signed ( i said this cant superseed government legislation ) she said it does and i will get a bill and they take people to court over it and win ??

    • If they think that they can supercede legislation then they’re dreaming. I suggest having a look at the info available at LegalBeagles (link in the article above), where they give a lot more explanation on the machinations of these sort of issues.

  5. Hi there, I’m coming up to the half way period of my 5 year finance agreement through Santander i believe the type of agreement is HP/Conditional Sale and I am seriously considering using the voluntary termination to end my agreement with them because I am struggling to save any money whilst having to make these payments. What I am worried about is it affecting my credit rating for purchasing a mortgage, my question is do you think i am better off just to continue until the agreement has ended or use the voluntary termination to get out of this agreement so i can properly save for a house.

    • Hi Nathan. I can’t advise what will will work out best for you financially, but a Voluntary Termination is a legislative right and cannot be used to affect your credit rating. It does mean that Santander may be less inclined to offer you a mortgage, as you have failed to complete a previous agreement with you, but it should not affect your chances with other lenders.

  6. I’m stuck paying well over the odds for a car that’s not worth the money I have to pay.
    I’ve paid well over 50% of the total owing with only around 10 payments left.
    I am taking another car out with another finance company paying less a month back for a car much better. At the moment I look to be stuck paying 2 finance agreements. While I can afford but don’t think I should have to especially learning now I could voluntary terminate my contract.
    But I’m nervous n how things like this work out… What will I have to pay if anything ?? Would I be able to spread the cost f I had anything??

  7. We are only 18 months into contract with our car and we have had nothing but bother since we bought they car (paying guts of 2k in repairs up to now and now my clutch is starting to slip and we have been quoted £970 inc vat to repair – could honestly cry. I am calling car finance company on monday to find out about a settlement fee to see if we can trade car in or see if they will consider VT. Do you think they will if we haven’t paid 50% off yet ?

    • Hi Margaret. Sorry to hear that you are having so many problems. Unfortunately the finance company won’t care one iota, which means that they are absolutely not going to allow you to VT the car without paying 50% of the Total Amount Payable (even then, they don’t like it but have no choice but to allow it). Chances are you will also be in a difficult position if you want to part-exchange the car as you will probably have quite a lot of negative equity. I’m guessing you have bought a used car, otherwise these sorts of problems would be covered by the car’s warranty. Without that, you’re unfortunately stuck with it for now or paying a lot to get rid of it.

  8. Due to some unforeseen circumstances I am now having trouble meeting payments for my car, I also feel I am paying over the odds for it. (£300/month for a Fiesta).
    I am looking into the possibility of a VT, but the car needs an MOT and some minor repairs, which I can’t really afford.
    Would this void my chances of a VT ?

    • The car will need to have a valid MOT when you hand it back, and the issue of the repairs will depend on whether it is reasonable wear and tear for the car’s age. If it is more damage than is reasonable, then you will be billed for the damage.

  9. Hi Stuart – Are you familiar Porsche Lease Purchase agreements, they are defined as a type of HP and I want to ensure before committing that VT would be applicable as I am aware that pure lease agreements are exempt from the regulatory rule.

    • Hi Rob. If it’s an HP, then Voluntary Termination rights should included. A Lease Purchase is a form of Hire Purchase so it should be in there. There has to be a clause listed in the finance agreement which explains your VT rights, so you should be able to see it before you sign anything. Have a read of this introduction to car finance which covers different finance products, and our car finance glossary.

    • Hi Mark. When you confirm the VT with the finance company, they will have a process regarding the collection/return of the car. That will include inspecting for damage, making sure they have all the keys, books, V5C logbook and any other bits. Their representative will sign the V5C and then you post the yellow section back to the DVLA to confirm that you have handed back the vehicle.

    • If the car has not passed the service due date, you should be able to hand it back without servicing it. However, if the service date falls due before you are giving the car back, you should get it serviced. Your finance agreement requires you to have the car serviced on time – if you don’t then you are in breach of your finance contract and they can probably refuse to allow you to VT the car. I don’t know how strict the finance company would be in your instance, but as a rule finance companies don’t like VTs so they will make it as difficult as possible.

  10. Hi Stuart,

    I recently bought a BMW z4 in august, I pay £300 a month on a HP agreement. The agreement is over 4 years. However unexpectedly my financial circumstances have changed and I am now finding it hard to make the monthly payments as well as my general living costs.

    I know that I am in negative equity. But I was wondering what your advice would be?

    • Hi Robert. Best advice is to make your tough decisions sooner rather than later. It probably still won’t be easy, but it usually gets worse the longer you leave it if you can’t make your monthly payments.

      Speak to the finance company and discuss your situation with them. Depending on the type of finance plan you have, they may be open to restructuring it to help out. If you don’t get any support from them to reduce your monthly payments, your best bet is to try and sell the car and take out a (hopefully) small personal loan for the negative equity. It might be a bitter pill to swallow, but it might be your least-worst option.

    • Hi Stuart,
      I have a PCP agreement with Ford. I have only paid 11 payments of my 68 month contract. My settlement figure is £7183.09.
      I have checked on the like so auto trader and my car is worth around £6800.
      Am i allowed to sell the car and pay the negative equity?

      Thanks for your advice.

    • Hi Hannah. Yes, you should be able to sell your car and pay off the settlement to the finance company. Make sure you contact the finance company before you do this, as they may have some requirements. For example, some finance companies insist that your buyer pay them direct, rather than paying you and then you paying them.

    • Sorry – just checked my paperwork and it is a 36 month credit agreement HP.
      The total amount payable is £10761.06. So I am only about 30% through the agreement.

    • You can still settle the agreement, regardless of whether you are eligible for voluntary termination. As of right now, you are 11 months into your agreement. Of the £10,761.06 total payable, you have paid off less than £3000, and if you settle now you will have to pay £7183.09. You can sell the car, but if you get less than £7183.09 then you will have to make up any difference. So if you get £6000 from a buyer, for example, you will have to pay the finance company an extra £1,183.09 to clear your debt. Have a read of this article about settling a PCP (or HP) early.

    • Yes, that is what the settlement figure means, you pay it anyway you like and it’s settled.

  11. Hi Stuart, We have two payments remaining to reach the half-way stage on a Personal Loan with Santander and want to voluntarily terminate – can we still do this with a Persoanl Loan ie. it’s not a conditional one? Evans Halshaw sais we should have no problem, but Santander appearing to be playing hard ball. Any advice appreciated as I feel we have been given duff information from EH. Thanks in anticipation.

    • If it’s a personal loan, you do not have Voluntary Termination rights. Check your finance paperwork – if you have VT rights then they will be spelled out clearly in a specific clause. A personal loan is not secured against the vehicle, so the finance company does not have any interest in the car – you simply owe them the money you borrowed + interest and fees. Voluntary termination only applies to secured finance agreements such as a PCP or HP.

  12. Hi Stuart,

    I brought a ford mondeo 3 years ago on a 5 year plan. Meeting monthly repayments is a real struggle. However the car has not been serviced. Would the finance company be able to refuse a VT based on this?


    • Hi Pete. It may depend on whether your finance plan is a PCP or HP. With a PCP, your finance agreement requires you to have the car serviced in accordance with the manufacturer’s service schedule, and usually by an official franchised dealer. Failure to do so is a breach of contract, which means the finance company does not have to let you VT the car. It also invalidates your GMFV at the end of the agreement. If you have a Hire Purchase, you will need to check your contract and see what it says. Any breach of contract means the finance company can refuse a VT, so it will depend on your circumstances. If you have an HP, you may be better off selling the car privately, as you will have paid off a fair chunk and it may be worth more than your outstanding finance amount.

  13. Hi Stuart. My wife bought a car on the 13th of this month via the dealerships HP. We have decided that the repayments are to high and want to pay for the car outright using our savings. The car cost £6,000 and we paid £1,000 deposit plus they allowed us £1,500 part ex on our old car. Can we cancel the HP agreement and pay for the car outright and if we do so will we incur any other costs from the finance company.

    • Hi Pete. If you are quick, you should be able to cancel within the 14-day cooling off period and not incur any fees at all. Have a read here for a bit more info on cancelling your finance within 14 days. If you don’t get it done, you can still cancel but may have to pay some fees. It will still work out to much less than all the interest you would pay over the term of the HP.

  14. To pay off your finance you say you only need to pay 50% of the amount owed is this including the deposit which was put down initially. Sadly lost my job before Christmas and no longer able to afford the finance didn’t realise it was possible to terminate early without paying it all off.

    • Hi Ross, sorry to hear about your situation. Your finance documentation should highlight the exact VT figure, but it should be 50% of the total amount payable (which equals the amount borrowed + interest + fees). It should not include the initial upfront payment as you did not borrow that money.

  15. Hi Stuart,

    Very interesting article and please keep up the good work.

    One thing that I think a lot of people misunderstand about PCP is the fact that the depreciation element of a PCP is a ‘repayment’ loan, whereas the balloon payment is ‘interest only’; thus; the latter element of the PCP never reduces and you pay interest on it at the full amount for the entire term. This is why a PCP is more expensive than HP or a conventional loan where the entire credit balance is repaid on the ‘repayment’ basis.


  16. Hi stuart i wounder if you can help/advice me i took out a lease from kia with 6000 miles a year after 4 months my situation changed im using 10000 miles a year i called kia who said they will not increase my miles i offered to pay more a month i also called santander the finance company both declined now looking into vt it works out cheaper for me to return half way as im going to pay near £1000 excess if i carry on till the end i was then going to look at just buying a car take out a loan now i presume santander will decline me if i take out a loan for a car to purchase outright what am i best doing applying with other companys or for a car loan they shouldnt decline me if my credit score is excellent and can repay monthly payments i sort of feel stuck in what to do as i will need a car.

    • Hi Bash. You don’t have VT rights on a lease like you do on a PCP or HP. A lease is simply a rental, so you are bound by your contract with the leasing company (Santander). There is no simple and cheap way to end a lease, so you are stuck with the terms you signed on for unless you want to pay a huge termination penalty. Taking finance elsewhere will probably not help your situation as you will still have to pay a penalty but will also be paying interest to another finance company.

    • Hi stuart im sorry it was hp i had not lease it states in my contract i have a right to terminate once ive paid x amount and the car is in good condition please can u readvice me thanks sorry for misinformation

    • Hi Bash. If you have an HP or PCP then it’s surprising that the finance company won’t allow you to amend your mileage. A VT may be a viable option for you, or you could save the extra £1000 over the remainder of the loan so you have it ready to pay the excess. If you VT the car, you will need to pay a deposit on your next car anyway, which will probably be more than £1000. You are right that Santander probably won’t finance your next car, but it shouldn’t stop you getting finance elsewhere.

  17. Hi Stuart,

    Ive read over a few comments here and you seem to know your stuff!!

    I have got a new Mercedes A class, bought in June 2014 from my local dealership. It is a PCP deal and I pay £300/month for it – along with a 30/month service package.

    When doing the deal the guy selling me it did not mention anything about paying money if I wanted to hand the car back early. The impression I got was I could hand the motor back and simply walk away (something he also said) but after reading various comments on here, I am un-sure if I may have to pay something if I wanted to get rid within the next couple months.

    Iam currently saving for a house and doing not bad, but could ideally do with something around the £180-200/month range.

    Basically is it as simple as handing the car back and walking off with nothing? I didn’t have to put a deposit down, they just cleared my finance agreement on my old car. They also serviced it for me so that isn’t due until Sept 2015.

    Any comments would be appreciated. Thanks

    • Hi Arnie. You can only VT your car and walk away once you have reached 50% of your total amount payable. On a PCP this only usually happens a matter of months before the end of the agreement anyway. If you want to change the car at this point, you will have considerable negative equity because the car is worth less than what you still owe. Have a read of this article about settling your PCP early, as it will apply to your situation.

  18. Hi! I’m potentially due to leave the country (for at least a year, outside of EU) in a month or so and I am 2 years into my 3 year Ford Options plan.. what’s the way to get out of this? Ideally I’d obviously like to not be liable to pay thousands before leaving! The Ford was brand new when acquired and has done WAY over the mileage (should have been 18k, currently already done 30k).

    Any advice would be helpful! I’d like to have all the facts before I speak to them.

    • Hi Angel. You are probably at or close to the point where you can VT your car. Check your paperwork on your Ford Options contract, as it should tell you what the amount is (half of the total amount payable). Work out how much you have paid them so far, and that will tell you if you have reached this mark.

    • Heres a tip princess, if you start a contract and try to quit it halfway through to travel the world, don’t complain that your liable for thousands. And don’t get a pcp for WAY lower miles than you actually do then complain about it.

    • How exactly ‘Jungle’? This individual has clearly showed no intention of honoring her legally binding contract and wanted to know, quote “whats the way to get out of this”.
      She also blatantly ignored the mileage clause which she was trying to then avoid paying for. Its people like her who caused the credit crisis and frankly I hope Ford took every penny from her they could or drove her bankrupt.

  19. hi stuart, I took on a car on finance for £11,000 but after 6 months and payments of £1600 my circumstances changed and i could no longer afford the car, I contacted the finance company who agreed to take the car back they then applied the “half rule” on my account but are now pursuing me £600 for excess mileage and for future payments totalling £6000(original balance due) plus £3000 interest (again on top of the agreement interest in the (£6000 balance due) even though they accepted the car back and applied the half rule to the account? how can they pursue for future payments totalling £9999.08, excess mileage £606.68, have £1600 of my payments plus a car worth at least £6500 when returned – so they are looking to gain £18725.16 from me when the amount borrowed was only £6588 and the total amount due was £11,862.36 – none of it makes sense

    i’ll try and explain it easier

    The original amount borrowed was £6588 the full amount including interest to be repaid back on the agreement was £11,862.36 (it’s on the statement)

    I made payments of £1619.40(statement) and returned the car

    they then made a half rule adjustment on account for £5931.18

    On top of this they are still trying to pursue £6118.12 future repayments? but £6118.12 + £5931.18 + £1619.40 = £13,668.70 this is £1806.34 more than the original agreement amount? This is clearly incorrect

    And what’s even more worrying the “future repayments” amount of £6118.12 already has the interest from the agreement accounted for but for some reason Moneybarn are adding more interest onto the original interest so this “future repayments” total is £9999.08 so they’ve added interest twice to a payment that no longer should exist?

    I’m actually bemused at these calculations all this info is clearly set out on their statement but they are still pursuing me in court in a couple of weeks its crazy

    • Hi Chris. I don’t know how they have come up with those calculations. If your Total Amount Payable was £11,862.36, then your VT threshold should be £5,931.18. You have already paid £1,619.40, so you should owe £4,311.78.

      They can’t charge you for excess mileage, only for damage. If you have failed to make regular payments or not serviced the car according to its schedule, you lose the right to VT the car. For more information, go to

    • Hi stuart thanks for getting back to me, they are trying to charge for the full amount of the credit then they’ve added £606 for excess mileage then added “future payments on top” then interest on top of it all then theyve deducted £5931.18 for a half rule adjustment?
      I have also checked over the conditional sale agreement and there is nothing on it in relation to the deal, no car info no monthly payments no APR no amount borrowed or amount to be paid back or anything to do with excess mileage, the car had full service history and no damage it was purchased for £7000 I only had it for 6 months so worth at least £6500 – do they need to take into consideration their net proceeds from the sale of the car? it states on their statement that if the vehicle is returned to them they will deduct the net proceeds from the sale of the car from the outstanding balance
      I feel they are trying to get the full amount from the agreement plus mileage costs plus keep the car it’s shocking – their solicitor won’t listen to me when i’m trying to explain this to him or anything else to do with their errors

    • Hi Chris,

      By the sound of it, your agreement may not have a VT clause in it at all, otherwise there would be none of this conclusion. Voluntary termination is only applicable to a PCP or HP finance agreement. There should be a specific clause which indicates your VT amount, which would simplify the whole matter. If you don’t have that clause, you do not have the legal right to give it back and pay half. Sorry.

      And if you bought the car from a dealer for £7,000, then it is almost certainly not worth £6,500 to sell it now. See our article on depreciation, which applies to all cars whether new or used.

    • Hi Stuart,
      Thanks for getting back to me I took out this agreement in jan 2013 had the car for 6 months handed back to them July 2013 there statement states “on returning the vehicle to us we will deduct the net proceeds from the sale of the vehicle from the outstanding balance”
      I have had the car valued today on glass guide and traders value is £5100
      The “signed agreement” is only 2 pages none of which has any disclosure of the deal i.e APR, amount borrowed, full amount due, payments dates and amounts or mileage or even info on the car make or cost or mileage,
      The agreement has sections on security/insurance of the car
      Missing payments charges – the account was up to date not in arrears
      Ombudsman FCA section
      Right to settle early section
      Right of withdrawal section within 14 days
      Termination section that states – you have the right to end this agreement to do so you should write to the person you make payments to they will then be entitled to the return of the goods and to half the total amount payable under this agreement that is £5931.18 if you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods you will not have to pay any more
      Repossession section – your rights if you do not keep to your side of this agreement but you have at least paid one third of the total amount payable under this agreement that is £3954.12 we may not take back the goods against your wishes unless we get a court order. If we do take them without your consent or a court order you have the right to get back your money under this agreement
      The 2nd page is just info stating I confirm to accept the info within this agreement and data protection info
      There is no info regarding the actual agreed terms i.e. payments interest etc and if their statement states they’ll deduct the net proceeds of the sale can I argue that point?

      Thanks again for your advice I really appreciate it

    • If you didn’t specifically declare that you were terminating the agreement as per the termination clause, they don’t have to treat it as a VT. Unfortunately, given that this all happened nearly two years ago, you can’t go back and do it differently. Your best bet is to engage your own solicitor and try to agree a settlement with them, as they have the legal high ground. A solicitor could also advise whether they are breaching the law by not providing all the required information in the contract. If you simply keep trying to argue with them on your own, you are likely to lose and the longer it takes, the more they will be able to claim from you. It could also significantly affect your credit rating.

    • Hi Stuart id did terminate in writing and they have applied the half rule on the statement – does this help my case?

    • A court will review all documents and correspondence presented over the whole period, and their side is likely to be far more experienced at arguing these cases. Get yourself professional advice; there’s nothing more I can say to assist you.

  20. Hi I need a little help, I have been reading some of the above messages about exceeding our mileage. We have just VT our c1 exceeding our limit by roughly 5000 miles, they are trying to bill us £244. The car was in good condition we have charges of £85 for damages which we believe are wear and tear we walked round with the lovely chap who examined our car he said its in pretty good nick for a 34 month old car. We have photos of all around the car but you can’t see any diets or scratches.
    Cheers in advance for your help :D

    • Hi Stephen. It’s perfectly normal for the finance company to ask you to pay excess mileage and damage, and it is perfectly normal to tell them where to go (politely, of course!). They can’t force you to pay for any excess mileage when you VT, and they can only charge you for damage over and beyond normal wear and tear. They are simply trying it on in the hope you will pay, as they are probably losing money by you VTing the car.

      Hold firm and point out that they have no legal basis for their claim under the VT clause. See for more information.

  21. HI Stuart

    I financed a new A Class in April 2013 on a three year deal at £279 per month with the Agility Finance Package

    It has warned me I am in need of a service at 15,550 miles, I have now done 25,000 miles, however I cant afford the £200+ they have quoted for servicing on top of my monthly train bills to work (unexpected change of job).

    I will be able to get the service done by the time I hand back the car, but it will be a late service compared to what they recommend.

    Will this have a detrimental effect when I hand the car back at the end of lease and will I be liable for any fees?


    • Hi Simon. Yes, having the car serviced on time every time (usually within 1 months or 1,000 miles of the service’s scheduled date, whichever comes first) is a requirement of your Agility PCP agreement. If the car does not have a complete MB service history and you try to claim the GMFV at the end of your three years, they will penalise you by approx. £900 per missed service.

    • Hi Stuart, Iam also in the similar agility PCP deal for an A class mercedes, monthly payments of £300 per month. I have had the car for 6 months now and possibly looking to hand it back this summer. Do you envisage any costs ? Or is it as easy as handing the car back and walking away to go find a cheaper deal somewhere else (house purchase pushing me to hand it back) thanks

    • Hi Arran. You have to reach 50% of the Total Amount Payable, so unless you have very short-term PCP and a very high deposit, you are going to need to keep the car for a lot longer than another 6 months. The amount you need to pay off should be listed in your contract with Mercedes-Benz Finance. If you want/need to get rid of it early, you will have to pay a fairly large amount to MB Finance.

  22. Hi Stuart,

    I plan on handing back a 2007 mini around April te as that’s when it’s halfway through the hp term. I have owned the car since it had 78k miles and it’s at 108k now. I have had 2 services carried out when the dash said it needed servicing but not by a bmw/mini dealer. Will this affect my right to vt. Also there is some corrosion on the alloys and some stone chips at the front of the car otherwise it’s good for having done 108k and I think the clutch is close to being worn out. Will they come back to me on these points. TIA. Alan

    • Hi Alan. Firstly, halfway through the term does not necessarily equate to half of the Total Amount Payable. Check your agreement details, as it should tell you exactly what you have to pay in total to give the car back (Total Amount Payable includes deposit, interest and fees, so half of that doesn’t necessarily equate to halfway through the term).

      The only stipulation is that you must have taken reasonable car of the car. They can’t ping you for not having it serviced by MINI as long as you have followed the required service schedule. There may be some argument over condition with regard to stone chips and wheel corrosion, but you can decide whether it’s worth getting anything fixed before you give it back.

      Whether the finance company wants to have an argument about charges for vehicle condition often depends on how confident you are in dealing with them. If you make it clear in writing that you are exercising your right to VT the vehicle as per clause X in your contract, and don’t let them sidetrack you regarding any other issues, they will usually accept it and move on. If you start asking them how to go about the process, they will usually give you answers which suit them (ie – telling you that you have to pay for mileage, wear and tear, servicing, etc. which is not true).

  23. ive got a car on pcp with Citroen it finishes in may but they have left me in a hole the settelment fig is just over £5000 my car is only worth £4000 so they say so im arround £1200 down already still got another £800 to pay over the next few months plus the £430 to hand my car back to them at the end of the agreement and i think ive worked out about £600 fo extra milage i was pointed in the direction about phoning up to vt/vr my car i was just wondering would i have a leg to stand on and im hoping to get another pcp but with a diffrent car company would this stop me??? if you could shine any light on this id be gratefull thank you

    • Hi Kyle. Yes, as the above article states, as long as you have repaid more than 50% of the Total Amount Payable, made all your payments on time and had the car serviced according to schedule, you can voluntarily terminate the agreement and give the car back. It is your legal right and will have no negative impact on your credit rating.

    • Kyle why don’t you try reading the article? And Citroen hasn’t left you in a hole, your the bell end what bought a Citroen.

  24. Hi I was wondering if anyone as ever heard of a finance company accepting you for finance then putting a clause in where the person apply for the finance is the only person allowed to drive the car and then they wanted prove that no one else was on the policy .

    • I haven’t heard of it personally, but there’s no legal reason why they can’t do so as a condition of financing the vehicle. Does sound a bit unusual though.

  25. Stuart

    I am 3 years into a 4 yr finance deal on my car and have found out that I have negative equity of about £1500. I am in the process of trying to get a new vehicle however I have a dilemma, do i VT the current car or try and get the new dealership/finance company to put this shortfall on the new car finance? Some finance companies won’t do this and will ask me to pay the £1500 before they do a part exchange. I could VT the car but there are a couple of small dents on the vehicle which probably do not come under wear and tear and will need repair, I have done over 2000 excess miles, the car has passed its MOT but the MOT people said the tread on the tyres was just above the legal limit and my tax runs out at the end of March. Time is running out and this could prove quite costly.



    • Hi John. You are confusing early settlement with Voluntary Termination. If you are going to VT the car, then assuming you have repaid 50% of the Total Amount Payable, you simply hand it over to the finance company. They can only charge you for any damage that is over and above normal wear and tear. Mileage is irrelevant as long as the car is in good condition. This is your legal right, regardless of the equity position. The negative equity is not your problem, although obviously the finance company will not be happy about inheriting a car that is worth £1500 less than their settlement figure. But that’s their problem.

      Most of what you are describing above is related to settling your PCP early and starting a new agreement. Most finance companies will not allow you to refinance your negative equity (and in reality, you don’t want to do this anyway, as it makes you new car much more expensive and creates even greater negative equity problems during your next agreement), so you would need to settle this with your current finance company before starting a new agreement.

      Usually road tax is the least of your ongoing costs, so don’t get too worried about having to pay your road tax in March. When you sell the car, you will get most of your unused tax back anyway under the new DVLA rules which cam into place last October. Take your time and do it properly rather than rushing, as you are far more likely to get a good result. The tyres may or may not be a big expense, depending on the size & type of tyre. If you are part-exchanging or VTing the car, it doesn’t matter what brand of tyres are on it (unless it’s a performance car like a Porsche), although we would always recommend quality tyres instead of cheapo tyres for safety’s sake.

  26. Hello there, first of all can I say a massive thank you to you for providing the information on this website. I’ve just VT’d my agreement with Moneybarn which to my suprise they did with no questions asked or any unhelpfulness. The only thing that they did raise which I need to clarify here is that I have done approximately 8000 miles more than in my agreement and they want approximately £800 paying. Obviously this is a large amount of money, do I have to pay it? I am guessing so as its in my agreement. The car that I VT’d is in excellent condition and I have really looked after it so when they come to inspect it they should not find anything wrong. I am going to take detailed pictures of the car inside and out as well as all the invoices and service history so Moneybarn should have no come back. Thanks again!

    • Hi Andrew. If it is a VT rather than an early settlement, then you don’t have to pay anything for excess mileage. Once you point out that you are well aware of your rights under the Consumer Contract Regulations (as linked in the article above) which only makes reference to the vehicle’s condition, they should back down.

      They are basically hoping that you’ll pay it, and I would put money on it that someone would be getting a bonus or commission for any monies reclaimed for the company in this way.

  27. Hi,

    Can you please clarify if the 50% paid is 50% of the original amount borrowed, or 50% of the total amount in a settlement figure obtained now?

    I am 36 months into a 48 months PCP and have been offered a company car therefore wish to return the car.

    So, for example if the original loan (including fees and interest) was £18k, and the settlement figure now is £8k, I can write to them, state that I wish to VT and providing there is no damage I should own no further money?

    • Hi Tom. The figure is 50% of the Total Amount Payable. This should be clearly stated in your PCP agreement. It is neither of the amounts you suggested. Total Amount Payable is everything you have borrowed + interest + fees.

      If you settle early, there is a recalculation of the interest payment (because you will not pay interest on the last year of your agreement if you settle now) so the settlement figure is reduced. This does not apply to a VT situation.

  28. Hi, I took a car out on finance 18months ago and I’m willing to pay the rest of the 50% borrowed. I havnt had my car serviced within the 18 months will this affect the voluntary termination? Thanks

    • Hi John. If you are giving the car back under the VT clause, then there is nothing specific that refers to servicing. However, the finance company can dispute whether the car can be defined as being in good condition if its mechanical maintenance schedule has not been followed (I’m assuming it was due at 12 months but you haven’t done it?). It’s a very grey area – if you have a PCP, they could also potentially argue that you have breached your contract by not having the car serviced on time, and therefore refuse to allow you to VT.

  29. Hi stuart,i have a car taken out on citroen elect 3,the car is due to be returned at the end of may but i wish to return it at the begining of april due to personal circumstances,i phoned up citroen who told me that if i had paid 50% then i could apply,however due to the fact i put a large deposit down my monthly payments were very low at £89,and i only have 2 payments left
    the final balloon payment would have been £4700 so even if i pay the final 2 payments i will still have paid less than the balloon payment £3204 vs £4700 so less than 50%. does this mean that it will be impossible to hand the car back 2 months early (im going out of the country for some time so it will be a massive problem if i cant)

    • Hi Richard. You should be able to voluntarily terminate the vehicle. It’s unlikely that the balloon is going to be more than 50% of the Total Amount Payable. However, even if it is, then it shouldn’t be a problem. You should be able to give the car back in April and make your final two payments to bring you up to the end of the PCP term. The finance company gets the car a couple of months early but you’re still paying what you would owe, so it shouldn’t be a problem.

  30. Hi Stuart, Thanks again for answering my question above. I have spoken to my lender (Moneybarn) and basically quoted what you had put in relation to the excess mileage and the response I got from them was “you have signed a legal document which clearly states that you will pay for any excess mileage at the rate of 10p plus VAT over and above 15000 miles per annum.” They then basically said If I refuse to pay this then they will hand the matter onto a collections agency who will come to my house to request the full payment and the guy also said a “black” mark will be placed on my credit file. Additionally, I had a car auction company come to initially inspect my car and they have told me I will be billed anything up to £1000 for “paint work damage to the front of the vehicle”. This is absolute garbage, there are a few stone chips but bear in mind the car has done 85,000 miles, surely stone chips are to be expected? The rest of the car is pristine and has been regularly serviced at main dealers. Could you advise if they are just using bullying tactics here or if i will really have to pay for the stone chips? Note I have taken detailed pictures of my car to be used as evidence if necessary. Additionally, forgot to say, yes this is a VT not an early settlement.

    • My guess is that it is simply bullying. There’s no provision for their contract to override your statutory rights. The issue of stone chips is always difficult, as small chips can need a full bonnet and/or bumper respray, but the definition of what is acceptable wear & tear is quite grey.

      I suggest having a look at for more information about going about a VT.

  31. Hi I am trying to work out where I am, due to an expanding family I am in need of a bigger car and my 3 door just cant cut it with 2 kids…

    I am almost halfway through the term of my finance (BMW select) and I am trying to work out when I can VT, is it half way through the term of the finance or when 50% of the total amount payable?

    My Payments are spread out over 4 years and I have a balloon payment at the end, do I need to incorporate this into the total amount payable? this would move my VT 2/3s of the way into my contract I think.

    any advice would be appreciated.


    • Hi Billy. The VT point is 50% of the Total Amount Payable (including the balloon), so it is usually fairly late in the term of a PCP. The amount should be clearly stated in your contract, so you can work out how much you have paid since you started and that will give you an idea of how close you are to your VT point.

  32. Hi Stuart,

    I bought a car from CAR TIME show room from Bury, UK, they misrepresent the car information on the advertisement and also during the process of sale sales executive hide the facts. During the sale I particularly asked Sales Executive that car has any damage repair and repainted, he said car is in genuine condition and no repair or repaint be done. But when they hand over the car I get car checked by local garage and they informed me that car has damaged repair and repainted front and back bumper and also side doors. Car Time garage also damage the driver side door while fixing the driver door rattle noise. I have already launched complaint with finance company. Now car time offered me £500 pound to close this complaint. But my concern is they misrepresent the car in advertisement and during the time of sale where they did not disclose damage repair, repaint and any other faults which should be checked at their garage before advertisement. I want to ask what my rights are and where I stand? Your advice will be appreciated..

  33. HI Stuart,
    I purchased a 6 month old vauxhall astra from a main dealership with a r year finance deal. The vehicle obviously came with the original three year warranty but I was concerned that should anything happen after that period I would have to foot the bill. To cement the deal, the dealership gave me a Network Q warranty to cover the remaining two years, which unknown to me, was of no use whatever because I was using the car as a driving tuition vehicle. The dealership knew that it was going to be a training vehicle as we had purchased from them before.

    There was no charge made for the Network Q warranty and I can only presume that they provided this at their expense to ensure the deal was made.The vehicle has now got major engine problems which run well into 4 figures and both the dealership and Vauxhall just say it is out of warranty. GMAC the finance company, agree that one of the faults was indeed identified in inside the manufacturer’s warranty period. I have even taken this to the ombudsman and they say that they cant help as the original dealership is no longer trading.
    Can I VT this vehicle as I have paid more than half the amount owed and I cant afford the repair bills..

    • Hi Peter. Firstly, if there are records showing that a fault is identified/reported within the manufacturer’s warranty period, it shouldn’t matter whether the original dealer no longer exists. Any Vauxhall dealer should be able to undertake the warranty work and claim the costs back from Vauxhall. If you have evidence of an issue being reported under warranty, contact Vauxhall head office and ask them how best to proceed. If you kick up a fuss (politely, of course!) and refuse to be fobbed off, you should eventually get somewhere.

      The Network Q warranty issue is a lost cause, unfortunately. Your beef there is with the dealership and they no longer exist. It may be worth checking to see if they were part of a larger group, as there may be be a head office for them if they have showrooms elsewhere. Don’t like your chances of getting anywhere, however.

      As for VTing the car, the finance company simply won’t accept the car with major engine problems. In their defence, it’s absolutely nothing to do with them (GMAC is a separate company to Vauxhall, even if they are both ultimately owned by GM).

  34. Hi, sorry you probably get asked this all the time, my wife and I voluntarily terminated our Clio on a hp scheme, they inspected the vehicle and found no damage and we thought that was it, now they’re asking £440 in excess mileage, I know you’ve stated that they cannot charge us for excess mileage but is that laid down in any government legislation? Legal beagles refer to the consumer credit act 1974 but I’ve had a look at that and I cannot find anything referring to excess mileage on it, I can’t turn round to renault and say I’m not paying because everyone on the Internet says I don’t have to, I’ve considered legal representation but that would cost more than just paying renault.

    • Hi David. It’s a common question, but there is no provision for a finance company to charge for mileage on a Voluntary Termination. They almost always try, but that doesn’t mean you have to pay it.

      Hold firm and point out that they have no legal basis for their claim under the VT clause. has some more information, but the legislation you refer to only requires that you have cared for the car in a reasonable manner.

      The VT clause in your contract should also state this.

  35. I bought a car from CAR TIME show room from Bury, UK, they misrepresent the car information on the advertisement and also during the process of sale sales executive hide the facts. During the sale I particularly asked Sales Executive that car has any damage repair and repainted, he said car is in genuine condition and no repair or repaint be done. But when they hand over the car I get car checked by local garage and they informed me that car has damaged repair and repainted front and back bumper and also side doors. Car Time garage also damage the driver side door while fixing the driver door rattle noise. I have already launched complaint with finance company. Now car time offered me £500 pound to close this complaint. But my concern is they misrepresent the car in advertisement and during the time of sale where they did not disclose damage repair, repaint and any other faults which should be checked at their garage before advertisement. I want to ask what my rights are and where I stand? Your advice will be appreciated…….Please let me know how can cancel my agreement and return the car?

    • Hi Stuart,
      I have 3 more payments to make on my car to go past the amount required to VT. Can I pay these early in one sum and immediately VT the car?

    • Hi Alan. Yes, this should be possible. The law only states that you have to hit the 50% mark, so you should be able to pay the balance and VT the car immediately.

    • You will be locked in a battle of what you said vs. what they said, so unless you have anything in writing, you have no grounds to return the vehicle.

  36. Hi there I’ve currently got a 63 plate Ford Fiesta 1.25 zetec on pcp payments £260.81 per month for differing reasons I would like to change my car but don’t mind retaking out a new pcp as this kind if works well for me. Could you please tell me the pros and cons and whether it is actually worth changing my car now. It’s not for financial reasons that I need to change it. Rachele.

    • Hi Rachele. Yes, you can change if it suits your needs. Be aware that you will probably have some negative equity that needs to be cleared, so it may be a bit of an expensive exercise. Add upp your costs and decide if it’s worth the cost for you to change it now.

  37. Hi stuart i just recently took out a hp car finance with creditplus for a bmw 1 series which altogether the end result of the payment is around £13000. i can pay it off monthly but im feeling like i have made a mistake. im 3 weeks into the contract and i wanted to know what would happen if i just stopped paying for the car or whether it was possible to just allow them to cancel the contract and take the car back because i want a way to cancel the contract without having to put any other property or belonging of mine at risk due to settlement issues with the company. i’ve always been told that on a hp finance, if you cant pay or stop paying they just take the car back. is that true? what are your thoughts? i really need help

  38. Hi Stuart, Please let me know If I get independent Assessor report on car damage which was not disclose by the CAR TIME during the sales. Can I challenge them in the court? While HPI is clear on the vehicle. That mean the honour repair the damage and sold car to CAR TIME and they did not disclose to me even I particularly asked if any damage repair or repainted. As local garage advised me to get Independent Assessor certification then you can challenge them in the court and they have to take the car back…Your advice will be highly appreciated

    • The HPI has nothing to do with any minor damage or repairs. It will only advise if the car has been written off and repaired. You don’t have a case.

  39. Hi, I have a PCP contract for my car that runs over 36 months. After which I have the option to hand the car back or pay off/re-finance the rest of the optional final payment. My question is, can you VT half way through your initial agreement (i.e 18 months into my initial three year agreement), or does it have to be half of the full amount payable? Thanks for your help!

  40. Good article. I’ve found that the sales reps at the dealerships deliberately try and mislead you with PCP contracts, saying things like ‘When you are half way through your contract, you will be able to hand back the vehicle without charge, or change to a new car without charge’ when this is clearly not the case and could be many months or years until you reach 50% paid. They seem to be twisting the 50% of total amount payable into ‘50% of the monthly payments’.

    They also talk a lot about ‘equity’ with regard to upgrading early, making out that ‘the car maybe worth more than the payment outstanding, so you will have a nice deposit on the upgrade car’ seriously? has this ever actually happened to anyone?

    • Hi Andy. Yes, there is too much confusion about the 50% mark. 50% of the Total Amount Payable on a PCP is normally only reached at about 75% of the way through the agreement.

      And I always recommend that people expect not to ever get any equity. Consider it a bonus if you have anything left over at the end.

  41. hi Stuart – l know it is repetitive – does the 50% payable include the balloon figure on the end ?? Thanks Paula

  42. Hi Stuart I’m currently in a personal lease with audi and they are terminating the contract because the car was seized by police and compounded. But I borrowed the car to a friend who was Insured to drive it but got the car taken of him for another reason.I want to keep the car, anyway of getting audi to allow me to keep the car without termination.

    • Hi Ahmed. You will need specific legal advice if you wish to challenge the finance company over this matter.

  43. Hi Stuart,

    I have a 5 year HP repayment period on a used Jaguar, I’m now a month or so over my first year anniversary of repayments. I’ve added an extra 20K of mileage over that period, pushing it to 118K… I’m aware this is going to kill the car value in depreciation soon, if not already. I accepted that though as this was a ‘until end of [car] life’ agreement I made with myself. I’ve just parted with £850 to get new tyres for the car, that was the only MOT caveat this January. Other than that, it’s is pristine condition.

    The problem: I’ve had an offer to move to HQ in the USA (promotion), and the perks outweigh the benefits of remaining here in the UK, the car included. Clearly I’m below 50% of the period, but I read in one of your other articles that you can sell your car to make up 50% of the ‘total’ value of the finance. That would mean I’d have nothing to physically give back to the finance company, so I feel I’m perhaps misunderstanding you. Henceforth, are you able to inform me of my option given my situation? I’d hate to be in San Francisco paying for a car sitting on a driveway in the UK :)

    Thanks in advance, and thank you for this amazing resource.


    • Hi Nathan. I think you are misunderstanding me. Once you have paid off 50% of the Total Amount Payable, you can Voluntarily Terminate the agreement, which means giving the car back with nothing further to pay. So you have paid off half of what you owe and surrendered the car.

      In your circumstance, you can sell the car, but your settlement is going to be be quite high and probably quite a bit more than the car is worth, so you will have to pay out the balance. Have a read of this article about settling your agreement early. It’s based on a PCP rather than an HP, but the principle of early settlement is the same.

    • Hi Colin. It is likely to depend on whether the finance company has processed the termination. In theory, they should be happy for you to keep paying them money, but they may have already ended the agreement.

    • You can always check with your finance company, but third parties have nothing to do with VTs. You can refer RMS back to your finance company if they have any questions, since the finance company is the owner of the vehicle.

  44. I have just paid £1500 for my car to be collected under a VT and now another company have contacted me telling me I have to pay £250 damage costs as I have a few scratches on it. Is this right?

    • The issue of “reasonable care” is always open to dispute. However, any dispute should be between you and the finance company and no-one else.

  45. Hi Stuart, you kindly replied to me on one of the threads above and I’m looking for a bit more advice please. I’ve just VT’d my car and its now at a handling agent awaiting auctioning off tomorrow. The finance company have just written to me today and demanded £750 in excess mileage fees and an astonishing £328 for “stone chip damage”. More alarmingly, they want to charge me £44 for “jetwash”. Are these people for real? Surely they cannot charge me £44 to have the car washed? Note, prior to the vehicle being collected I did have the car fully valeted inside and out and have photographic evidence to prove this. Surely I can contest this? Additionally, you told me previously that I would not need to pay any excess mileage given i was VT’ing the car. Is that still the case and on what grounds do I have to refuse payment of this? Finally, and most importantly, the £328 charge for stonechips is absolutely absurd. Any motor dealer or mechanic will tell you, a vehicle which has covered 81,000 miles is bound to have stonechips. How can the finance company put me at blame for this, surely it should be classed as wear and tear? I note your comment above saying reasonable care is always open for dispute but surely this is ridiculous? I am considering taking legal advice on this because I have in no way shape or form neglected my car and always looked after it and had it serviced at main dealers. I’d be most grateful to hear your comments on this please.

    • Hi Andrew. Yes it is ridiculous, but it’s not that surprising. Stand your ground, and quote the terms of your contract (and the law) which give you the right to return the car without any charges for mileage or damage beyond reasonable care.

      Just because they have written a demanding letter/invoice doesn’t mean that you are obliged to pay it. Stay firm and make it clear that you understand the law and your contractual position, and they are likely to back down – at least on the mileage and jetwash(!). The stone chip damage is going to be a matter of interpretation, but £328 is not unreasonable if the car needs any paintwork. Again, it depends on what you and they each consider to be “reasonable”, and it is a grey area of the law.

      For more information, especially if you are considering taking legal advice, check out There are people on that forum who discuss VT issues on a regular basis.

  46. Hi Stuart, we are just about to VT our BMW and have followed all protocol with regard to ensuring the car is in showroom condition when it gets handed over. We have however done over the total mileage suggested on the contract and I know as you have made clear we are within our rights to not be liable for this aspect. In order for the collection be instructed though we have to fill out a form (and sign it) which says ‘Your maximum total mileage is stated on your agreement. If you have have said agreement this will be prorated to the date you return the vehicle and an invoice will be sent for any mileage charge due’. It then has a section for you to record ‘mileage at last srrvice’ and at the bottom says ‘please sign details below to confirm that you have read and understand the consequences of ending the agreement. My question is by signing this agreement, does it then make us liable for th excess mileage as we have then ‘agreed’. If we don’t sign it however, they won’t ‘instruct collection’. Not sure what to do? Maybe sign it and not put the mileage?

    • Hi Mandy. You don’t have to use their form – it’s a trap. You may exercise your legal right by informing them in writing that you are voluntarily terminating. As soon as you sign any kind of form agreeing to pay for mileage, you will be drawn into an argument over it and can reasonably be expected to be billed for it. Advise the finance company (in writing) that they are free to collect the car on whatever dates you have available, or you can deliver the car to them. For more info, visit, where they have draft templates you can use and there are plenty of stories of people who have successfully VTed their car.

  47. Hi Stuart, unfortunatley i have only read the above after i VT’ed the car and paid £98 in excess Milage. However i wrote to them with regars to the value of the car which was in excess of the final settlement figure, asking them do i get money back that they might make for the sale of the car, and was told no. Is this correct?

    • Hi Andrew. They are correct – Voluntary Termination gives you the right to return the car in lieu of any further payments. The value of the car against the amount outstanding on the finance is irrelevant, so in this case the finance company has come out in front. Normally it’s not the case, and the car is worth less than the amount outstanding. Plus they got an extra £98 out of you for excess mileage, so they’re probably delighted with how it’s worked out.

  48. Hi Stuart, I would just like to clarify something with you. I have a PCP contract on a 2 year deal. The total amount repayable is £15000 (inc interest and fees) the GMFV of the car at the end of the 2 years is £9000. When it says in the article you have to pay at least 50% before you can VT, is that 50% of the amount I would be due to pay over the 2 year contract therefore half of £6000 or is it half of the total amount borrowed therefore half of the £15000? I am 12 months into the contract now and have paid just over £3000. Can I VT now or not until I have paid £7500 which would actually be 6 months after the 2 year contract has finished anyway?



  49. I recently took a car out on a PCP with arnold clark. I just lost my job so i wont be able to afford the monthly payments to the finance company. i am still within my 14 day withdrawal period, what do i do? any advice? Im sure i can get out of my financial agreement with the finance company but what will arnold clark do? I have already informed them about this. Surely they have to take the car back off me if i cant afford to pay for it? Thanks

    • Hi Cal. Unfortunately there is no easy way out of the situation, regardless of the cause of your problems. Yes, you can cancel the finance, but then you will have to pay for the car, as you can’t cancel that. The dealer is under absolutely not obligation to take it back, as they have sold it to the finance company and you have taken delivery of it. If you stop paying the finance company, they can take you to court. Your credit rating will be affected and you could even be declared bankrupt.

      Your best bet is to get in touch with the finance company straight away and explain your situation. They may be able to reduce your payments for a period of time and extend the term or increase subsequent payments, however they are not under any obligation to do so. You always take out a finance agreement at your own risk.

  50. Thanks for the reply. Its the dealership that i need to speak to then, because i can cancel the finance but i need to convince the dealership to take the car off me. Can you offer any advice on how i can get them to do this? I have paid a deposit of £850, will that not be an acceptable price to pay in order to get them to take it back?

    • Your chances of getting to by your used car (because that’s what it now is) are very slim. If they do agree to buy it back from you, it will be for much less than you paid for it – for various reasons. Have a read of this article about why your car loses so much money so quickly (if it’s a new car, the biggest chunk is VAT, but it affect used cars to a large extent as well). So you may be able to get rid of the car, but it will likely cost you thousands of pounds, not just your £850 deposit.

  51. Can someone offer advice, my daughter is 3 months into a PvP and hates the car, she's just passed her test and is struggling to drive, so much so her confidence has took a battering.
    I expect a financial nightmare on the cards, she wants to swap it ideally for a slightly bigger 1.2 engine…

    • Hi Rob. The best solution to help your daughter is probably with some additional driver coaching and lessons to help her with her confidence, rather than replacing the car. It’s unlikely that the car is why she is struggling with her driving, even if it’s what she currently believes. Plenty of new drivers struggle with confidence issues once the instructor or helpful parent is no longer present and they have to battle traffic on their own.

      If you want to sell the car, it will be expensive. Have a read of our post about settling a PCP early.

      And there’s no guarantee that going through that hassle and expense will make her feel more comfortable on the roads than she is now.

  52. Hi I have been accepted for finance but already have a car on finance with negative equity, when iv payed half I intend to hand it back and take the new agreement with a different lender, the original agreement is 50% interest it's financially better for me to take new agreement at 7 % iv never missed a payment and all been on time but bit worried doing this may affect new deal iv got 5 more payments to reach halfway.its a 3 yr deal thanks.

    • Hi Kev. Make sure your finance agreement does allow you to voluntarily terminate (usually it has to be a PCP or HP); your contract should have the relevant information. The contract should also tell you exactly how much you need to have paid to be able to VT, as the amount is not the halfway point of your finance term, but half of the Total Amount Payable. If you have a PCP, it is often quite close to the end of the agreement rather than halfway through.

      Assuming you do have the right to VT, then it is your legal right to do so and cannot be used to negatively affect your credit score.

  53. Hi Stuart, I got a finance for a 5 year old car at the time, I had too take up a vt and was advised to do a vehicle inspection on the car. I was unable to do this but I returned the vehicle in a good condition and it just passed the mot.
    When the recovery guys came, I was given a form to sign as they've checked that there was no damage on the car.
    To my surprise, few weeks later, the finance company wrote to me demanding a sum of £4000 for cosmetic damage on the vehicle and that's what they need before the car can be in satisfactory condition for sale, which I did dispute. They said they only rely on the independent search and that I'm now liable to make this payment.
    This is rather ridiculous, as the car I bought was a used one and I asked that they return the vehicle to me and I can carry on with the payment, but they told me that they've sold the car. In other words, they've made their money back on the car and still charging me a sum of £4000 for the car that I can't get back. This is a complete rip off. can someone help pls. Thanks

    • Hi Favour. Disputes over vehicle condition are reasonably common when VTing, unfortunately. The legislation is vague, only mentioning "damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”. There is no determination of what that means, so it is open to interpretation and therefore abuse.

      You can certainly challenge them to explain how they have come up with a figure of £4,000, as it is almost certainly an over-inflated estimation. They will be hoping that you pay up to avoid being taken to court. They may be prepared to settle for a lesser amount, or you can stick to your guns and face them in court if they want to take it that far.

  54. Hi stuart,
    I was advised by car salesman to vt my pcp as my car will be worth much less otherwise. my car has a small scratch on the bumper and it was a new car. i was wondering would they charge me for the scratch?

    • Hi Waqas. I would recommend getting the scratch repaired before VTing the car. If it is only minor, it won’t need the whole bumper painted and should be quite inexpensive. If you don’t fix it and the finance company tries to charge you for it, it will be for a lot more money.

  55. Hi Stuart
    i handed my car back to RMS on 09/10/15 with the last paymen of £350.
    I have just received a letter saying under the terms and conditions with Peugeot they are required by law to issue a notice damage above wear and tear and excess milage. Also full vehicle polish Alloy wheel refurb total £120. My mileage on the car was 6519 and i signed the paper work that i was given by the man who picked it up.I am 65 lady driver and have kept this car in perfect condision as i have done with all my other cars This car was cleaned inside and out costing me £15 .I just cannot afford this ammount can you help me please

    • Hi Kathy. It depends on the circumstances of how the car was handed back. If it was a voluntary termination, they can’t charge you for excess mileage (although they may well try), but they can charge you for damage above normal wear & tear (which is a very loose description, and allows them to charge you whatever they want and force you to dispute it).

      If you reached the end of a PCP and were returning the car, I can’t see there being a problem with excess mileage if you have only covered 6,519 miles. As for condition, it should be specified in the agreement and they should have a schedule of charges for repairing any damage. The guaranteed minimum future value (GMFV) assumes perfect condition, so they can charge you for any repairs required according to the contract.

    • Hi Stuart
      There was no damage and i was at the end of my contract and just had to pay £350 for what they called Gap Insurance. What they want off me now is( Full Vehicle Machine Polish=£65 + Alloy Wheel Refurb+£55 Total £120) A week before they picked it up I had it fully cleaned inside and out this cost me £15 well worth it.I put the car in the garage fully covered it. The car was in perfect condition. There was nothing in the letter for claiming for damage just the the above .

      Many thanks for your reply Kathy

  56. Hi Stuart this is going to be a rather interesting one. I bought a citroen c5 on finance over 2 years ago ( of a 4 year period) so have paid over half the finance amount. However the car has suffered from a broken (hydraulic) suspension issue about 6 months ago, so has obviously been off the road since, I have continued to pay the finance as I was unaware I could potentially return it until now, the repair cost for the car is in excess of £1000 and am unable to afford this cost as I have my second child due at the end of January, I tried recently to cut my losses and get finance on another car and trade in the c5 but because the car was in such a high amount of negative equity I was unsuccessful, I would just love to be rid of the car now tbh but I’m pretty sure they would refuse a vt without me having to pay an extortionate amount of money on it, just wondering if there is any advice you could possibly give me, thanks in advance

    • Hi Scott. In terms of your eligibility to VT the car, you have to have paid more than half of the Total Amount Payable, which is different to simply being halfway through the agreement (and very different if it’s a PCP). Check your finance contract, and it should tell you the exact figure.

      You won’t be able to VT the car if it has major mechanical problems. I am assuming that you bought the car used, rather than new, otherwise it would still be covered by the New Car Warranty and you wouldn’t be having this problem.

      Unfortunately, you don’t have any good options – Citroën residual values are generally terrible, which means you are likely to be in significant negative equity for a long time. I would get some more quotes on the repair work, as an independent specialist might be able to fix it for a lot less than a Citroën dealership.

  57. Hi Stuart,

    I am looking to purchase a new car in the next couple of months and I’ve been doing some research on finance solutions. My mileage is a sticking point as it is entirely unpredictable. I do a lot of contract work so I am worried about being hooked in on a 10k a year mileage deal if I end up doing a lot more, on the other hand I don’t want to be paying out more if I do less.

    By the sounds of what you are saying, if I was to take out the finance on a 10k mileage deal, even if I ended up doing up to 25k, I would have the option of VT once half the finance is paid, even with excessive mileage?

    My question then is why does anyone ever pay excessive mileage at the end of their term? If you are able to VT once you have paid off half, then surely that option is available during the final month of the contract?


    • Hi Duncan. You are correct. The only catch is the vague reference to damage above normal wear. If you have done massively more mileage than your contract specified, the finance company will be able to chase you for damage (ie – wear) that would not be considered reasonable on a car with much lower mileage.

      Eventually a finance company will challenge the exact scenario you are describing, attempting to make a case for fraud. If you enter into a finance agreement and knowingly underestimate your mileage, and then do not take steps to rectify it with the finance company at any point during the contract, they could argue that you have deliberately misrepresented your mileage, which is considered fraudulent. To the best of my knowledge, it hasn’t happened yet, but if everyone was to do what you are suggesting, it would happen eventually.

  58. hi stuart,

    I am in the process of a vt, and I have just had the car assessed and taken back to the finance company today, but the quote the assessor gave me was disgusting. He said it would cost nearly £1,700 to get the car back to when it was new. But I bought the car second hand (5 yrs old,and had general wear and tear) He quoted me nearly £500 for a new windscreen (the stone chip was repaired by auto glass) The car was in very good condition inside and out. If they stick to there guns and demand £1,700 off me, which I can not afford, can I say “ok,I will pay the £1,700, but I will pay you £10 a month”.

    I can afford more but if they are going to be awkward with me, can I be just as awkward back??????????

    End of the day they will get there money back, well end of the decade!!!!!!!

    • Hi Chris. Unfortunately, the definitions of ‘damage’ and ‘normal wear & tear’ are vague, so it gives finance companies the opportunity to try and lever more money out of you in the hope that you will pay up to avoid legal action or any effect on your credit score. You can certainly argue with them for as long as you like; they will be hoping to wear you down so that you pay up to finalise the matter.

  59. Hi.

    I took out a used car on bad credit finance about 9 months ago & the repayments are stupidly high. I’m wondering if I could cancel the agreement after 16 months which is halfway into the agreement and ill of paid haof of the money.

    I was stupid to get the car and now realise it would be much cheaper to save and buy a used car.

    I have never missed a payment and it’s though a company called thecarfinancecompany

    Thanks for any help or advice :)

    • Hi Ben. You may or may not have the right to voluntarily terminate the agreement. Your finance contract should explain any VT rights and the amount you need to pay to be able to do it. Check the wording carefully.

      If you do have the right to VT the car, it is once you have repaid 50% of the total amount payable, which is not necessarily the same thing as the halfway point in terms of time.

  60. Hello I’m looking for help or advice. I’m planning on moving to a different state in a few months so I’m trying to figure out what i can or shouldn’t do with my vehicle. Looking over my bill of sale. Here’s where I’m at: total price was $7500, with a down payment of $1,000. After interest the final cost would be about $8600.(high interest rate) My payoff balance on my monthly bill shows amount due $4000 and I have confirmed all interest has been paid. Can I use my rights under the “half rule” CCA 1995*??? If I’m eligible to do so it’s from my understanding all additional payments will cease, and i would only have to pay for some damages (if any) to the vehicle and that’s it??? And say if I am not at the halfway point i still have the right to do all this i would just half to pay the additional payments until it’s at the halfway point AND I’d have to pay for whatever damages(if any). If I’m correct i am eligible and entitled to such law. I would also like to know the additional steps in going about this process correctly.( I have just downloaded an example document to send out or bring to the dealer stating i want to use said act/right. Please forgive me as I’m only 21 years young and do not know much.. ALSO I LIVE IN PENNSYLVANIA IS THERE A DIFFERENCE…

    • Hi Tony. We are a UK-based site, so I’m not familiar with the situation in the US, although I understand it can vary significantly between the different states.

  61. Hi I’m after some advise I handed a car back to the finance company after 4 years they came and inspected the car and gave me a bill for £680 for damages so I’ve agreed to pay them £100 a month to pay this off but they have refused my offer and say they want more ,can they refuse my offer

    • You can try to fight it with them, but there is no clear definition of wear & tear, so it’s your opinion vs. theirs on whether any damage is acceptable for the car’s age and mileage. The finance company is normally prepared to keep fighting it, because they know most customers will give in and pay up. They are unlikely to agree to any payment plan, as they know customers are likely to stop paying and they have to chase the money all over again.

  62. Hi Stuart, I have read many of your comments and youll be glad to hear i will not be asking similar questions that you constantly get.. My query is linked to the Bavarian & Italian motorcycle sector that utilise Black Horse Finance for their HP,PCP & Personal loans. Have you had any complaints or queires regarding those that have VT’d their Motorcycles or Cars for that matter?

    • Hi Gordon. No, I haven’t had any specific feedback about Black Horse Finance, for either cars or bikes. The same principles apply when dealing with any finance company. Be polite, but stand your ground and don’t be pressured into abandoning your legal rights when VTing your car (or bike).

  63. Hi, Wondering if you can help. I have handed by car using the VT Clause. I have received a letter from the company telling me I need to pay excess mileage. My total mileage for the whole term was 23700 and limit was 2400. The excess mileage charge is calculated pro rata. Do I need to pay this could I fight it.. | They are telling em I need to look at my contact.Which I cant right now but will l when I get home.

    • Hi Gwen. No, as stated in the article above, you do not have to pay for excess mileage on a PCP. The law only makes provision for damage over and above normal wear & tear. It’s very common for finance companies to try and charge for excess mileage on a VT, but they cannot enforce it.

  64. Hello,
    just about to start proceeding with a VT, Finance company will send me an info pack. However they already let me know that I have to pay for an additional product that I took, being GAP insurance. I have paid over 50% back already. Is this right that they ask me for this additional sum of money?

    • Hi Anthony. Check your contract to see what payment arrangements were made for your GAP insurance. It is entirely possible that the payments were added onto your monthly car payment, and as such you may not have paid for the entire value of the GAP insurance. Unlike the car, you can’t VT the GAP insurance. However, make sure they are correct in saying that you haven’t paid all of your GAP insurance, rather than just taking their word for it.

    • Thanks Stuart. I hope this by goes smoothly looks like a hit and miss thing when it comes to things like fair wear and tear issues. One thing I am worried about is stone chips . in order to keep warranty on paint work valid they had to be repaired, which i did. However the show up as a slightly different colour. Can I argue my case that I followed. Manufacture’s requirements and therefore avoid any extra charges?

    • As you say, issues about damage and wear & tear are very hit and miss. You will probably be OK regarding the stone chips, but it depends on how much fuss they want to cause. There is no official legal advice one way or the other. As long as you set your case out that you did everything to follow their requirements, and stick to your guns, you should be OK.

  65. Hi Stuart,

    After a year into a 3 year PCP plan, we are considering VT. The vehicle, a Skoda Yeti 2.0 has been affected by the VW emissions scandal (we received a letter from Skoda a couple of weeks ago informing us of this). Is there scope here to cancel the contract as the product spec wasn’t as advertised at the time of signing?

    • Hi Jason. As far as I know, no-one has yet tested the VW dieselgate issue in court with regards to this. You are extremely unlikely to be able to cancel the contract and walk away scot-free, as you have had full use of the car for a year. Unless you can prove that the emissions were the key reason in you choosing the Yeti over another car (which you almost certainly can’t, unless you have a verifiable email trail discussing the matter in writing with the Škoda dealership before making your purchase), you can’t use it as an excuse to try and have the contract cancelled. And besides, no-one actually knows what the emissions results will be if/when the Yeti is re-tested after the recall update has been carried out; it may be that they are only slightly increased rather than drastically affected.

      You can’t use the emissions issue as an excuse to cancel the contract because you simply don’t want the car anymore. If you want to claim compensation for reduced resale value arising from the dieselgate scandal, or reduced performance or economy as a result of the recall modifications, you will certainly be able to do that if you can prove it.

  66. hello, i have a question if you could please help with it, i am looking to VT my car agreement but am around £1500 short of the 50%, i should be able to raise this but do i need to pay this first befoer sending the VT letter from legalbeagels website giving the finance company 14 days notice or can i send the letter then pay the balance?

    • Hi Stephen. Legalbeagles can probably advise better, but I would have thought you should have repaid the full 50% before initiating your VT, so that you have fulfilled your obligations and they can’t use it as an excuse to deny/delay the process.

  67. Hello Stuart,

    I have been trying to source information regarding the VT on my vehicle, Land Rover Discovery.

    To summarise it short, I bought the car June 2014 on a 36 months agreement and just now I am at the 50% mark to enable a VT.

    There were issues with the car mechanically, which I had to pay repairs/replacement, the garage washed their hands off it and i went nowhere with them. to date, I have paid over 1,500

    Issues starting to pop up along the months, replacing some issues myself.

    Last November, I took ill, and had to go to the hospital, and found that i had a breathing issue, which i am currently undergoing test, which will be reviewed later this month that I potentially have an asthma. I have since found that the vehicle have a lot of hidden mould sprouts. Someone pointed me out that I should check the MOT history which I have done so and was alarmed with the history and don’t know how they managed to keep the vehicle on road. So I sorn’d the car last November basically because of health issues, which I don’t want to affect my family and mechanically of the car.

    Since I sorn’d the car in November, to the day I type this comment, the inside of the car is full of moulds/meldrews.

    I felt that the car is not fit for purpose and shouldn’t be on road.

    I need advice on this one as i felt it is a bit different from the usual VT processes?

    • Hi Martin. It is unlikely you are able to VT the car at this point as you are 50% through the term rather than having repaid 50% of the Total Amount Payable (I may be wrong, depending on how you set up the contract, but the VT point for a 3-year PCP is usually quite close to the end date).

      I am assuming you bought a used car, rather than a new one (which would still be under warranty). Given that you have had the vehicle for 18 months and have been driving it until very recently, you are going to find it difficult to prove that the problems you now have already existed when you bought the car. You are unlikely to be able to prove that mould was there when you bought the car, as opposed to developing since you bought it.

      Unless you have solid physical evidence, you will not be able to claim that the car was not fit for purpose when sold as a used car 18 months ago.

  68. Hi Stuart. I have a question to ask you. I got a new car on lease, I only had the car for two months until I voluntary returned the car to the owner due to not afford the car. Now I got a letter with a early termination liability balance of 20,000 from the car. There’s no way I can pay that. That’s why I returned the car in the first place. What can I do? The guy that sold us the car from the dealer suggested me to avoid the letter and don’t pay the 20,000. My credit score already dropped, which I knew that was going to happen anyways. Should I fill bankruptcy ?

    • Hi Luisa. Leases do not have provision for voluntary termination, and you don’t have the right to give the car back after two months because you can’t afford it. For advice on your legal options, you can visit, but you may also need to get professional legal advice.

  69. Hi Stuart,

    I recently began a hire purchase agreement over the course of 3 years; I have paid off just over 1/3 of the total repayments (including interest) due to a £1,800 deposit and have only had the car since October but due to a change in jobs this year I do not want to/can’t afford to be paying this much for a car. Is the only option the ‘half rule’? Without losing out on money AND a car as I do need a car, this one is just turning out too expensive.

    • Hi Ellie. Your only other option is to try and sell the car privately, which may give you enough money to cover most of the settlement to the finance company. But you are still likely to have to come up with some additional cash to cover a shortfall, and that’s before you start to work out how to finance your next car.

      It may be that your best bet is to stick with this car until you hit the VT point. If you have a hire purchase, that may only be another six months or so.

  70. So just confirm…
    FCA have sent me a document, saying i have to sign it to arrange the hand back of my car. You’re saying I shouldn’t sign this? Yet they’re saying I can’t do anything without signing it…is it because I rang rather than sending a letter? Also there is damage to the car which I was quoted around £200 for from a garage. It was done by a friend when jacking the car!
    Do you reckon I should get this repaired before taking it back as they might charge me lots more?

    • Hi Samantha. You do need to claim your VT rights in writing, but you do not need to fill in their forms. Voluntary termination is your legal right (assuming you have a PCP or HP agreement), and the finance company cannot insist that you fill in any of their forms.

      It is usually cheaper to get the repairs done before you VT the car, but make sure they are done to the highest standard or else the finance company will try and charge you to have it re-done.

  71. Hi Stuart

    I am currently fighting BMW over an excess mileage charge of £1600, I have my VY notice as per template on legal beagles and sticking to my guns with there been no legal provisions to charge me but they have come bac saying the below; The CCA clearly states that any pre-termination liability is not affected by termination and that they can lawfully recover any excess mileage in addition to the 50%. They are saying as my mileage was accused before I ended the agreement that they are able to invoice me for this. They go on to say they have no control over the termination wording, and that the excess mileage puts the car out of good condition. The car is mint, the inspection report shows this and the guy that carried out the report even said it was mint.

    Please advise

    • Hi Rob. If the car is in ‘mint’ condition, you should have nothing to worry about. They can’t charge you for excess mileage, only condition/damage – and they are playing on the vagueness of that wording in the hope that you will pay up. They are highly unlikely to want to pursue the matter via court if the car is in mint condition as they would almost certainly lose. An excess mileage charge of £1,600 is fairly significant, which is why they are bothering to chase and threaten.

      At the usual average of about 10p/mile, you are about 16,000 miles over your allowance by the VT point and that’s why they’re annoyed with you, as it suggests a clear disregard for the conditions of the contract or an intention to VT from the beginning and never intend to complete the term. BMW Finance is normally fairly relaxed about VT issues, based on feedback from others over the years.

      If you are looking for specific legal advice, try the LegalBeagles forum or engage your own legal counsel, as we can’t offer legal advice.

    • Hi Stuart

      Thanks for the quick reply. The point that is confusing me in all this is that within section 99 of the CCA, it clearly states the following;
      (2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
      This is what they are trying to catch me out on and it all looks a bit confusing to me, BMW’s wording is that any pre-termination liability is not affected by termination and this means they can recover excess mileage costs??? They are also saying that my car wont be classed as ‘good condition’ due to the mileage, even though the inspection report said otherwise and the car was honestly mint / fully serviced / fully valeted etc.

      They say this is there final position so trying to scare me I think.

      What are your thoughts on the above point.


    • You will need proper legal advice to argue these points with them. Pre-termination liability is usually used to describe money owned for arrears or overdue payments, not mileage arguments.

      The mileage part is easier to argue than the pre-termination liability part – condition is not a function of mileage, even if it is linked to the car’s value. What they are saying is that the car’s value is reduced because of the mileage, but that’s different from condition. If the car is in excellent condition, you can easily argue that you have taken “reasonable care” of it.

      These are the two sections of legislation:

  72. Hi stuart,
    i have a car on PCP but it was a trade in for another car which owed money also. so its in negative equity. my financial situation changed when i lost my job and i am struggling to make the payments which are ridiculously high to cover the neg eq! £210 a month for a 6k fiat 500 ! i have had the car 6 months if i was to hand it back ( if this is possible ) do you have to pay the 50% all in one or do you finance the repayments ? thank :)

    • Hi Alana. If you VT the car, you will be liable to pay the balance of the 50%. You can try and negotiate a debt management plan with the finance company, but they do not have to agree. I’d also suggest reading the information on the forum at for help.

  73. Hi Stuart, nothing is owed and there have never been any missed payments so on this basis; the point they are making regarding pre-termination liability is invalid right? and has nothing to do with the excess mileage claim? if that is correct, I will eliminate this point and then just focus on the condition in which they shouldn’t have a case as the condition was excellent, regardless to the mileage. Thanks

  74. Hi Stuart

    You say pre-termination liability is ‘usually’ used to describe money owed in arrers / overdue payments? Neither of which is applicable in my case. Can you confirm that excess mileage charges can’t be included in this point. This is detailed in the CCA and the if this is a way for them to claw back mileage charges then the whole of this article is false and I’m hoping that’s not the case. Please advise. I am about to go back to them regarding the mileage not being classed as condition but just wondered where I stood as regards to there other point.

    Much appreciated


    • If you are wanting to engage the finance company over legal issues, you will need legal advice or take on any legal liability yourself, as we are not here to offer legal advice. I suggest you read the threads on VT at which discuss how to deal with finance companies, or engage the services of a solicitor.

      There is no definitive legal precedent for excess mileage under VT because the finance companies do not want to take these matters to court, as the legal arguments for claiming excess mileage are weak (their contract cannot override statute). The finance company is working on the basis that you will cave in and pay. To successfully defend yourself, you need to be comfortable and competent engaging them on the relevant points of law, which usually means engaging the services of a solicitor.

    • If you’ve been sent a legal notice then stop seeking free advice and get a lawyer like a normal person. You never intended to honour your contract and now your looking to get out of it without penalty. People like you will get valuable consumer protections overturned thanks to your greed and selfishness.

      Stu i don’t know why you bother replying to jerks like this. Judging by his comments he will screw up his fight with BMW, be forced to pay up and then try to sue you for his losses. Youre too polite to some of these ***holes

  75. I’m 13 months into a contract hire period on a Jag XF. I have no problem with the payments but have had terrible trouble with the cars suspension. It’s had 2 major repairs but is still the same. The dealer and Jag now say the car is fine. It’s not. It’s the worst car I have ever driven in 30 years of driving. The finance company are arranging independent testing with the view to taking jaguar and the dealer to court. Where do I stand in ending this agreement early.

    • Hi Ray. Your recourse is with the finance company, as it’s their car. Contract hire is a rental, so you don’t have voluntary termination rights, but you do have the right to a properly-functioning car since that’s what you’re paying for.

      For specific advice on how to engage with the finance company, I suggest visiting, which has an excellent forum for dealing with consumer legal issues.

  76. Hi there
    I have a Vauxhall insignia and it was recalled due to electric boot issues (ours was fine but we took it in to be done). 2 weeks later the boot failed to open and we’ve been fighting with them to fix it ever since. Apparently there was a leak which blew the circuit board to open the boot. They’ve said it’s not covered under warranty and they say we can’t prove they did anything to cause this. We refuse to pay to have it fixed as we believe they did something and it broke (the same way they did a full service and left the engine cover under the car off and lost a locking nut and tried to charge us for it!!)
    We’ve had enough and would like to get rid of it as we’ve found them shocking.
    We only owe 2 payments and own 50%.
    Are we able to give the finance company the car back with the faulty boot? Or will they make us fix it first?
    Many thanks :)

    • Hi Katy. I would assume that the finance company would consider it to be damage and insist that it be fixed. A quick check online suggests that several other people have had the same problem, so it is possible that the failure was unrelated to the recall.

      If you are unhappy about the dealer’s level of service, I would suggest contacting Vauxhall HQ and complaining, or you could try another dealership. If you do go to another dealership, they will charge you for the investigation work, and only refund you if it is accepted as a warranty claim.

  77. Hi

    I recently lost my job and ended up taking one on significantly lower pay so am considering a VT on my Audi.

    It’s a 3 year PCP which I’m 1 year and 9 months into, I had some deposit against it, it’s in excellent condition and the mileage is around right for the time I’ve had it (16,500 against 10,000 PA allowance).

    Are there any pitfalls I specifically need to look out for other than the obvious ones on condition? How are Audi finance when it comes to VTs? Flexible, nasty? How does the 50% thin work and being more than half way through am I covered for that?

    Any help or advice would be greatly appreciated.

    • Hi Brian. The figure you need to know is 50% of the Total Amount Payable, which should be noted in your finance agreement. You then need to work out how much you have paid (deposit plus all monthly payments so far) to see if you have reached this amount. If you have, then you can VT the car with nothing further to pay. If you have paid less than the 50% figure, you will have to pay up to that amount. It is not 50% in terms of time, as the amount also includes the balloon/GMFV amount.

      Condition and mileage are the two biggest sticking points on VTs, so if they give you any grief just stick to your guns. From feedback I’ve received, Volkswagen Financial Services (which is the actual finance company for Audi Finance) are generally pretty good with VTing, assuming you’re not massively outside the mileage allowance.

  78. Thanks for you advice.
    I don’t really want rid on the XF but there is something seriously wrong with the ride. Dealer has proved useless. I keep 100kg of sand in the boot to keep it stable and it only just does the job. It’s been there since it had 3k on the clock. On a £38.5k car jaguar should’ve ashamed of itself. Will persevere with the finance co.

  79. Hi I recently took out a lease Hire purchase on a Mercedes total cost 21249.75 monthly payments of 48*425.59 with an option to pay 5800.00 at the end of 48 weeks
    I recently received the yearly statement telling me I owed the total amount of 26504.56 this is because they have added the option of 5800.00 and not wited until the end of the 48 weeks at the end on to my original hire purchase. this is further confirmed when I looked at rights to terminate which state I can terminate when I have paid half what I owed which is 13252.40.
    Can they add this on to my total credit as I had the option to return the car and not to the balloon payment at the end

    • Hi Ray. Their numbers are correct. The total amount payable is £26,504.56 (which is repaid as 48 x £425 plus £5,800 at the end). Therefore the 50% VT amount is £13,252.40.

      The VT figure or any early settlement includes the balloon amount, because you have borrowed that money. If you get to the end of the 48 months, you can choose to return the car instead of paying off the £5,800 and keeping it. But it still has to be paid one way or another.

    • Paying them £5,800 in cash is optional, but ultimately you have a debt which needs to be settled. Your options are:
      1) Pay the outstanding £5,800 and keep the car, or;
      2) give them back the car, which they have valued at £5,800.

      From a contractual point of view, either option settles the agreement in full.

      If you want to VT the agreement, you have to factor in half the value of the final payment.

  80. The cash price for the car was 21000 I have the car for 48 months after which I can hand it back or either pay 5800 to keep it.
    at the end of 48 months I will only have paid 20426 (48*425.55) and can hand the car back what happens to the Balloon payment I assume that I don’t pay it as I don’t want to keep the car.

    • No, if you return the car then the agreement is considered settled. The finance company has calculated that the car will be worth £5,800 at the end of the agreement, so you either pay them the £5,800 or you give them back the car which is worth the same amount of money.

  81. hi me and my partner passed a car with finance last year, we are ng through a tough time and are having problems making payment. what can we do? my partner just wants to give the car up but we have where near paid half. what would happen if we just stop paying? we would rather they just took the car back

    • Hi Claire. You don’t have the legal option to walk away from the contract. If you simply try and give the car back, you will be billed for the full outstanding balance (not just the balance to get you to the VT point). Obviously, you won’t be able to afford that so you will default, so it will impact on your credit score and you won’t be able to get finance again.

      You can try to contact the finance company and see if you can work out an alternative payment plan. It may see you paying more in the long term, but reducing your monthly payments in the short term.

  82. Hi,

    I recently VT’d my car – I was not at 50% of the agreement and was aware of the final payment to make. I have a letter from them saying they would ask for this payment along with any other issues on inspection. There were no issues on inspection – just a little excess mileage.

    This was done on 22/12/15 – it is now 28/01/16. I have had no communication from them? I know the car has been sold at auction (I found it on autotrader). Should I contact them, or do I just hold out

    • Hi Will. I’m sure they will be in touch eventually, but you should keep all your records so that you know exactly how much you owe.

  83. Hi,

    I took out an agreement in September 2014 with £13,250 to pay back at £210 a month. The car was fr my husband, and we have now split leaving me to make the payments. I am wanting to VT but as I haven’t paid much back, is this possible?

    Many thanks!

    • Hi Liz. You can VT at any time, but you will need to pay off a total of 50% of the Total Amount Payable (presumably £6,625 if your TAP is as described above). This does include any deposit/upfront payment you made when you purchased the car.

  84. Fantastic article! Very informative.I have 6 month’s left on my 4 year PCP and I need to reduce my overheads so was looking to part ex the car.

    Turns out I have minus £2500 equity in the car at Todays trade in value (with the dealer) with £2800 left to pay. I am looking at VT’ing it therefore and purchasing something more reasonable.

    Theres no damage on the car (Alloys are scuffed quite well though) which I know I will be charged for. If I was to see out the term and hand the keys back instead of paying the GFV would they still charge me for damage to the alloys? In other words and I better of cutting my loses and accept the bill for the damaged alloys?

    • Hi Craig. There is no clear rule on what constitutes ‘fair wear and tear’, which leaves scope for finance companies to charge you for what they perceive as damage at their choice of costs. This will apply regardless of whether you VT the car now or hand it back at the end of the term. Some finance companies are fairly relaxed about scuffs and scratches, while others are more strict.

      However, if the wheels are “scuffed quite well” then you are probably better off having them repaired before returning the car, as it will probably be cheaper than paying whatever the finance company wants to charge you. For a fairly normal wheel design (ie – not a diamond-cut or polished wheel), you are looking at about £50/wheel from a mobile repair man. If you give the car back as is, the finance company may well charge you much more than that.

    • Hi Stuart – Thanks, just what I was thinking. I think whats stopping me from handing the keys back right now is not knowing what the final bill which I would with a part ex. Worried I won’t end up with enough money for a deposit on a new car or lease (which I might just do this time)

  85. Hi Stuart,

    I’m about to hit the half way point in my agreement (straight HP) when i make my next payment.
    I’m just checking that after 30 months (out of 60) that i am also half way from a £’s perspective, since thats what counts for VT.
    One thing ive noticed is that on the agreement, theyve added the £500 deposit i paid (“Advance Payment” in their lingo) to the “total amount payable”, the figure that has been halved to give the figure they quote on in the T”s&C’s under my right to terminate.
    This goes against one of the comments further up somewhere, but in any case am i right in thinking that if they have included the advance payment in the total, am i right to include it in my paid so far figure? That would make sense, but I want to make sure i’m in the clear before i exercise my right to VT.

    another one… part of their fees is £179 “option to purchase fee” added to the final payment. Should this make up part of the total amount payable for VT (where there is no intention to purchase)? on the basis that, for the avoidance of doubt, all calculations in finance agreements tend to work in the favour of the lender, i assume its just a name for a fee and is still a valid part of the amount payable, even for early termination.


  86. Hi, I got a car last year second hand through a dealer and now me and my wife are going to be moving to Canada later this year (at the time we didn’t know this and our old car had had it). What would be the best thing for us to do with regards to the car finance.


    • Hi Tom. You will need to sell the car and settle the finance. Unfortunately, there’s a strong chance that the finance settlement will be more than the car is worth, so you will have to come up with the extra cash to cover the difference. Have a read of our article about settling your finance early.

  87. Great read and thank you for doing it. It’s obviously something that is unfortunately becoming a more real option for people, my self included.

    I am going to start mine with VW tomorrow however am struggling to find the template letter. The link in the article seems to go to different page and was just wondering if you could point me in the right direction please

  88. Hi,
    I have bought a car at the end of nov 2015 for 12000 and have taken a Hire Purchase contract. The total cost of the credit is £13 792. I would like to end the contract (i know it’s soon) but I would like to know how much do I need to pay to the garage if I return it back. We have paid a deposit of 1200 and paid up every month 244 (since dec). Thank you for your help

  89. Great article and comments!

    Are you aware of reputable dealers advising customers to do this, possibly even with their own finance group in the middle, in order to make a deal more attractive? Do you know if the Finance Companies in this situation are more likely to condone the action if it means that there is potentially another deal with them to replace it?

    • Hi Nick. I know that some dealer do indeed advise customers to do this. I’m not sure that the finance company would be especially impressed about it being advertised in such a fashion.

      Finance companies evaluate any application on its merits, which would include previous history. I have heard of companies offering another agreement immediately after a VT, but have also heard of others refusing to finance a customer again.

  90. Hi Stuart

    Thank you for the information you have provided in the article. I have recently Voluntary Returned a Mercedes A Class and unfortunately I signed the VT Confirmation letter that Mercedes Finance sent out to me. They have now sent me a bill for £2421 for Excess Mileage and for damage costs. The damage is for a bumper repair that I had done by a Mercedes Benz Official repairer (I travelled a long distance and paid premium costs especially for this) and also had two wheel repairs done, by companies that were chosen by an alloy wheel insurance that was taken out with the Mercedes Finance. I sent Mercedes proof of my wheel insurance and the official repair certificate but they have not acknowledged it.

    Can you please advise me on the best course of action to take against Mercedes?

    • You will need specific legal advice on how to progress your case against Mercedes-Benz Finance. I recommend visiting legal for some tips, but you may need to consider engaging a solicitor to assist you.

  91. Hi Stuart!

    Fantastically useful article and incredible that you answer all of the comments. Great work!

    I read in one of the comments, in a situation of negative equity, you could sell the car and make up the negative equity gap with a payment. Would this be selling the car to just anyone for cash and using that plus extra to pay back the FULL amount still owed on the car?

    So, I owe £27,000 total on a PCP. If I could sell the car for £22,000, I would then need to pay the £22k + £5k gap to the finance company, am I correct? Is there anything preventing me from selling a car bought on PCP?

    Secondly, to look at a VT, I would have to pay half of the TOTAL amount owed of the car at purchase assuming you were to buy the car outright at the end of the contract, correct? It doesn’t mean half of the PCP minus the final bulk payment?

    • “I owe £27,000 total on a PCP. If I could sell the car for £22,000, I would then need to pay the £22k + £5k gap to the finance company, am I correct?”
      Yes, but you should contact the finance company first, as it is still their car. Some have certain rules about how you need to sell the vehicle (eg – the buyer has to pay the finance company direct, rather than paying you and then you paying the finance company).

      For VT, you owe half of the Total Amount Payable, which includes the final payment as it is part of your overall debt. Check out our car finance glossary which explains the terms in more detail.

  92. Considering VT on my BMW but concerned whether it’ll affect BMW allowing me to take out another PCP. I have a new car being picked up on March 1st with PCP arranged through BMW – just wondered if that was safe.

    Alternative is £1.5k negative equity which the dealer will clear, but if I VT I,d get that £1.5k off the price of the new car, so it’s money I don’t want to lose if possible.

    • Hi Richard. It will be a consideration, but there are plenty of people who claim that they VTed a car with BMW Finance and were able to get another one immediately.

      Also, if you already have a new approval in place, they are highly unlikely to cancel it if you then VT your old car.

  93. Hi Stuart, I posted some comments in early Jan and have since been battling it out with BMW over excess mileage charges. I have stood my ground and refusing to pay the charge based on all my research on your site / legal beagles but they are adamant that I need to pay them. They have started charging interest on the amount owed and now passed it onto collection company and said they will report me to the credit reference agency. Are they within there right to do this when I am still disputing the charge. They keep trying to point me towards the ombudsman if I wish to complain further. Any feedback on this would be much appreciated.

  94. I’ve VT a car with moneybarn after paying 60% and no missed payments. Moneybarn took an additional payment after I notified them in writing of termination on January 22nd. Car was collected on 4th Feb. Moneybarn are refusing to prorata a refund of the payment for Feb. Do I have a right to ask for the refund?

    • Hi David. Yes, you have a right to a refund, but that doesn’t mean that the finance company will make it easy for you. I recommend visiting, which provides excellent free and impartial legal advice. You may also need to engage your own solicitor to get what you are owed – and of course, the finance company will hope that you decide it’s all too hard…

  95. Stuart,
    I currently have a car on PCP that I wish to return early. The car has only had one service at 4,000 miles but is now due an 18,000 mile service. No 12monthly services have been carried out. The car was 14 month old when purchased with 6,000 miles on the clock. I have paid half the finance amount, should I get the vehicle serviced before returning it or will the finance company be looking to penalise me for the missing service history (Nissan juke on Nissan finance)
    Thanks john

    • Hi John. Yes you should get the car serviced – it is your obligation to take good care of the vehicle while you are the registered keeper, and failing to service the car will be considered “failure to take good care”. If you hand the car back without its servicing up-to-date, you can be sure that the finance company will charge you for a very expensive service, and they will magically find all sorts of work that will need doing at great cost…

    • Thanks Stuart I thought I had seen a link to termination letter templates on your site but cant find the link could you point me in the right direction. Excellent site with great advise many thanks

    • It should be in the article above and I think it’s somewhere in the comments as well. Sorry, out and about at the moment so I can’t re-link it until tonight or tomorrow.

  96. I have had a alfa coming up to a year on PCP but the last 3 week it has been in the garage as it has a fault which they are telling me they cant sort out we have had constant problems with the car throughout the year. after being back and forward between alfa and glyn Hopkins the dealer I have now contacted the finance company as I don’t want the car back and want to cancel as I don’t want a faulty car surely. will I be able to claim back the last 12 months of my payments? and my deposit

    • Hi Adam. It is rare to be able to cancel the finance and successfully claim back previous payments for a vehicle. Have a look at, which is a brilliant site for impartial consumer legal advice, but to have any real hope of getting your money back, you would need to hire your own lawyer and take legal action against the finance company.

  97. Hi Stuart, I did a voluntary termintaion due to my husband’s employment situation changing.
    I handed the car over and now I keep receiving letters about more payments that need to be made. Are they right to bill me for the car afterwards? The car was in good used condition.

    Thank you

    • Hi Nina. It would depend on what the bills were regarding. If you have not paid 50% of the Total Amount Payable, the finance company is entitled to bill you for the amount required to bring you up to that point. If they are billing you for damages, then you will have to dispute the matter with them if you believe the charges are not reasonable. If they are charging you for excess mileage, then you do not have to pay.
      Whatever the case, you need to pay up if you owe money or reply clearly to reject their charges if you do not feel you owe them anything further. Either way, don’t ignore their letters or you will end up facing ever-increasing charges once they start employing collections agents or lawyers.

  98. Hi Stuart,

    Spoke to Renault Finance today regarding VT, which I am eligable for as just paid over 50% of the finace agreement.. they have said I will owe over £1000 on excess mileage, as for some reason, and I have explained this to them, but all they say is “you have signed the paperwork”.. when I got the car, I made sure to tell the sales person, I do high mileage and yet he put it as 10,000 per annum.. do I have to pay the excess and what can I quote to them if they say I do.. I’ve read something regarding the Consumer Credit Act 1974 but just want to be sure over this as I’m not paying the excess if I don’t legally need to,

    Hopefully you can point me in the right path,

    Many thanks,


    • Hi Darren. As explained above, excess mileage is always disputed by finance companies, but the weight of legal opinion is that they have no basis to claim it. If you read through the various comments on this article, you will find dozens of people in a position similar to you.

      You should be able to get them to drop their excess mileage claims if you hold firm, but they may threaten legal action or call in collections agents if they think you are likely to pay up.

  99. Hi Stuart

    After having a read through of previous questions, I fear I may well be flogging a dead horse here, but here goes.

    I have a 2009 A3 on HP and am over the 50% repayment figure but the car has a mechanical fault to such an extent that the bill is expected to be approx. £3,000.

    Coupled with the fact that I now have a company car, I just want rid of the A3 that’s on HP but am in no position to pay £3k on fixing the car.

    The mechanical breakdown is through no fault of my own, it is actually part of a known issue with certain Audi engines of that age that was featured on BBC Watchdog, however mine does not fall into the necessary criteria for Audi to fix FOC.

    Do you see any possible scenario where I get to cut all ties with this nightmare and call it quits? The car would have held its value very well had it not broken down and as it stands at the mo is still worth about £4k. Maybe take the £4k that’s on offer for the car in its current state and hope I can get a settlement figure close to that number rather than look to VT it?

    Cracking thread! Cheers in advance.

    • Hi Ross. You won’t be able to VT the vehicle if it has a major mechanical fault (well, you can, but the finance company will invoice you for the repair work). You should be able to find your settlement figure very easily by simply calling the finance company and asking them for it, and you can then work out what will be your best (or least-worst) option.

      Have you already approached your Audi dealer about the goodwill fix or are you assuming that it won’t be eligible?

  100. Firstly, this information is very misleading and obviously not 100% correct. By Law, you have the right to exercise your right under the consumer credit act 1974 section 99 and terminate your contract at any time without further reason. You do NOT have to have paid at least 50% of the amount owing or borrowed before termination, and any arrears you built up will be added to your final bill after termination. That is the law. Section 100 of that same act states what you may be liable for under the original terms of the agreement. Nobody who loves their car and has invested money through repairs and keeping it on the road is simply going to hand it back and walk away. People who terminate their contract are 99% of the time in financial difficulty.

    • Hi Adrian. You are correct that you don’t have to have already paid off 50% before you can initiate a VT of your car. The article states “As long as you repay 50% of the Total Amount Payable, you are entitled to terminate the agreement and return the car to the finance company,” which is correct (note it says ‘repay’, not ‘have already repaid’). Ultimately, you have to pay off 50% before the termination is finalised and you are free of any further payments. In reality, customers are going to be at or near the 50% point before a VT becomes a valid option, as it is not worthwhile early in the agreement (you would usually be better off selling the car and settling any negative equity).
      In respect to your second point, you are fundamentally incorrect. The VT law may have been designed to protect those who are in financial difficulties, but that law has been exploited on a massive scale by those using it to their advantage. Many people VT their cars and walk away instead of running an agreement to its conclusion, especially on a PCP. If you give a car back at the end of a PCP and claim the GMFV, you are basically doing the same thing as a VT, except you have more obligations regarding servicing and mileage. If you scout about on the web, you will find many forums where people boast about VTing every car they own rather than keeping it until the end.
      You can read several earlier comments on this article from people who have blatantly exceeded their PCP mileage agreements and then terminated their agreement to avoid excess mileage charges. By declaring a low mileage and then VTing the car, you can have a lower monthly payment and dodge the mileage charge that would apply at the end of the agreement.
      I have also previously worked for a franchised dealership of a premium Bavarian car manufacturer where the Finance Managers actively encouraged prospective customers to take a 60-month PCP and VT the agreement instead of running full-term on a 36-month PCP with higher monthly payments.

  101. Hi I have VT’d my vehicle. The finance company have come back requesting a further monthly payment that they say I missed even though they accepted the VT as I was over 50%, I’m pretty sure that they have this wrong as although I may have missed the payment I remember paying off the arrears further down the line. They also want a small sum for damage and some mileage excess. Should I reply saying that the agreement is terminated, I have paid 50% and so no further payment towards the finance is payable. I wont be paying the mileage as you suggest but might offer them the small damage fee as a gesture of goodwill to resolve the dispute?

    • Hi Richard. How you handle the damage charge is up to you – if you agree that there are repairs required, then by all means pay for them. Ultimately it’s all negotiable.

      With regards to how you handle the extra payment they have requested, I suggest you visit the forum and ask their legal experts there on how to handle it, as it may depend on how your missed payment was handled at the time. I would have thought that you shouldn’t need to pay this, but you may need to fight your corner a bit to get them to withdraw their claim.

  102. Hello

    I am 11 months away from being 50% paid, I have a fee to pay to cover the last 11 months to allow me to VT. However I received the info pack and its stating that Black Horse will have to record this with credit agencies as a default on my credit score. Surely if I am paying nearly £5,000 to bring the payment up to 50% this won’t be a default but just an VT?

    • Hi Henry. A VT is not a default, as you are executing your legal right to withdraw from the agreement. It will be noted on your credit report, but it will not affect your credit score.

  103. I have a Skoda Fabia on a PCP. Vehicle cash price = £13472.50. Advance payment is £3000 made up of £2500 from P/E and £500 deal contribution. Amount of credit is £10472.40. This is over 41 months. Monthly payment is £110. The VT amount in the contract is £6736.30. If I have worked it out right, does this mean that I have already paid £3000 towards the VT amount, leaving £3736.30 left to pay before I can VT? This would be 35 months to pay. This is just out of interest as I recently bought it and don’t want to but just want to fully understand my options.

    • Hi Nathan. You are correct in that your upfront payment (aka deposit) counts towards the VT amount, so you are already £3,000 along the way from the beginning.

  104. Hello
    I got a new clio on 14 plate. I am really happy and would be fine to continue till the end of my agreement however we are looking to move house and the car payments are having a massive impact on how much we can borrow. Do you think I will be able to give the car back this year? It is still like new and I am massively under on my mileage.
    Thank you

    • Hi Donna. Whether you can “give it back this year” will depend on how much you have paid off from the Total Amount Payable. If you haven’t already paid off 50% of the Total, you would need to pay extra to reach that mark and voluntary terminate the vehicle. If you bought the car new in 2014, you are probably not that close to this point yet.

      Your finance contract will tell you what the VT point is, so you will need to work out how much you have paid off so far (initial deposit plus all monthly payments) to find out how far you still have to go.

      Being massively under your mileage allowance doesn’t help you in a VT situation, although it would be useful if you decided to sell the car and pay of the balance outstanding. For more information, read our article on settling a PCP early.

  105. Hi Stuart,

    I am currently 3 years in to a 4 year contract with FleetPrices on a VW Scirocco I hired in March 2013. I no longer wish to keep the car and I am 12000 miles under my Mileage limit. The car is in very good condition and has no excessive damage. Can I terminate my contract as I have paid over 50%? When I called about a termination last year, I was told that I would have to pay off the remainder of my contract to end the agreement and they said I could save some money by lowering the annual mileage, which in the end wasn’t much of a difference anyway. Is there anything I can do without having to pay a ridiculous amount of money to end my agreement?

    • Hi Hasan. Your termination rights will depend on the type of finance agreement you have with Fleet Prices. My guess is that it is a lease (contract hire), which means you do not have the right to voluntarily terminate the agreement. So you either pay a large sum to end the lease early or you stick with the car for another year.

  106. Hi Stuart, I’m currently 3 months into a PCP deal with Audi and my circumstances have changed and I no longer need the car. Will I be able to return or do I need to wait until I’ve paid half the car?



    • Hi Andrew. You can settle the finance agreement now, either by voluntary termination or by selling the car and putting the proceeds towards the finance debt, but either way will cost you a significant amount of money. The agreement does not allow for changed circumstances, and ending a PCP ahead of schedule is not normally optimal. For more information, have a read of our article on settling a PCP early.

  107. Hi Stuart Masson

    I am looking to buy an A3 saloon but my plan is to pay off the balance before the term. I also don’t want to go on HP finance as my monthly repayments will be too much. The audi salesmen suggested that if I aiming to clear the balance befire the term but want to keep my monthly repayments lower until then, PCP plan would be better suited for me. The car is 22k and I am putting a 11k deposit down. So the balloon payment is 12k,,, but as mentioned, I want to pay this off within 6-8 months.

    I guess my question is.. can I make partial payments on regular balance to clear balance asap and will I be charged interest on this…so although my balloon payment is 12k, which is what I will owe at the end of my term, will I be paying more than 12k? also teh audi salesmen has quoted my monthly repayments at £147.14. It it possible to pay off a PCP plan early or is there a fee for this

    many thanks

  108. I had a new 2015 vauxhall Antara, I pay £280 a month, !2 months old and had a service Unfortunately My job has changed (NHS cuts etc) and I’m now on a lot less a month and need to make some finacial changes. Does the VT 50% take off what has already been payed? and include the final payment.
    This is my second car I have had this way, the last Took in at 3 years old and started again so didn’t have to pay anything.

    • Hi Nick. The VT amount is 50% of the Total Amount Payable, which includes your deposit and all monthly payments (as well as any overpayments you may have made). It does include any final payment or balloon. The exact figure should be listed in your finance contract, and you should be able to work out how much you have already paid. This should give you an idea of how much more you need to pay to be able to VT the car. You can also call the finance company and they should be able to tell you this figure.

  109. Hi Stuart. I would prefer to own my car outright at the end of the term and hence I am putting a large deposit down 15k with remaining balance of 7k- car sold to me 22k. My question is that although my monthly repayments will be higher, I am aiming to settle the 7k way before the term ends….with HP finance are you able to pay off the 7k before the term ends? which would essentially mean I also avoid interest payments too. Do HP fiances allow this? thanks

    • Hi Tim. Yes, you can definitely do this. There is usually an admin fee for settling early, but it will be outweighed by the interest saved. For more information, have a read of our article on settling a PCP early. The same principle applies to an HP, but you are in a better position because you don’t have to worry about the balloon payment.

  110. Hi Stuart,

    Last week I took delivery of my new ford car from Dee’s of Croydon and drove it home very happy. Until I noticed the car didn’t have the features I requested. For example power folding mirrors. Full electric Windows, auto beam headlights. I called the dealership and asked them why they said I didn’t add this to the order to which I added I did. He said it’s not on his notes or the order form to which I realised he’s basically calling me a lier and washing his hands off the situation. I spoke to general manager and she said there’s nothing they can do to add those features onto the car and that I don’t have any right to cancel the PCP plan and bring the car back. Please help me I’ve had the car since the 31st March 2016 and I feel I am being penalised for their mistake. And I want out because of this. They are rude and made me feel very uncomfortable with this situation.
    Any advice would help me greatly.
    Many thanks

    • Hi Antonio. If the features you are talking about are optional extras, then they should have been listed on the vehicle order form.

      If the extras are not listed on the form, then you don’t really have any grounds to complain as it is your responsibility to make sure that what you are signing is correct.

      If the extras are listed on the order but have not been supplied on the car, then you have every right to return the car and point out that the specifications are not as per the contract (although you should have really checked thoroughly before driving off in the vehicle).

      If you do have cause to demand a refund, have a read of our recent article about how to handle a dispute with a dealership.

  111. Hi Stuart,

    I am 3 years into a 4 year HP agreement and unfortunately I will need to exercise a VT. 50% paid though.

    The car is way below allowed mileage allowed but there are slight damages on the cars interior caused by my me lifting my wheelchair in and out of the vehicle as I am paralysed and can’t walk.

    I’m just wondering if I will be charged for this damage? I know the issue is based on fair wear and tare but in my situation it is just from normal use as a wheelchair user.

    Maybe I’m totally wrong to even think this way? Not to sure! Any help would be most helpful

    Many thanks

    • Hi Steve. Hard to say whether or not you would be billed for damage – it largely depends on who is inspecting the vehicle and what they decide. You may get a bill and be able to argue your way out of it, or they may simply accept is as fair wear and tear.

  112. Hi stuart i took out a PCP On a brand new audi 14 months into it now at £400 a month i feel for that monthly fee i want a higher spec car payments is not the problem. I was told i had to clear my account of 24k and he told me to sell the car but car isnt mine to sell? I asksd audi salesman can i hand car back and look at new model with same payments said not until i clear 24k… can you advise to private sell car and have some negative equity or can i hand it back and walk away

    • Hi Alec. You are correct in that the car isn’t yours to sell, but usually the finance company is happy for you to sell as long as they get paid their settlement as part of the sale. Talk to Audi Finance and ask them if they have any requirements for how you go about this. You will have to cover any negative equity between the sale price and the £24K settlement.

  113. Hi was wondering come October i would of had my pcp agreement for 2 years would be half way through the agreement i dont even do a quarter of the millage that am allowed to do

  114. Hi Stuart, my car is being collected today by a representative of RCI Finance. They say they are going to charge me £100 for doing this (the alternative was to drive it to my nearest drop off in Bristol, which is 70 miles away).

    Is this a charge I should pay? If not, what should i refer to to stand firm that I don’t have to?

    • Hi Alice. There is no real guidance, so you would need to refer to your contract. You can certainly try standing firm on the grounds that there is (probably) nothing in your contract which allows them to charge a fee for collecting the vehicle.

  115. My car goes back to merc in a couple of weeks, the car is in great condition apart from a thumb size dent will they charge for this?

    • Hi Jamie. Depending on where the dent is located, and the opinion of the inspector, they may count it as fair wear and tear. It is impossible to predict.

  116. Hi Stuart, my husband has a van on HP with black horse, his work situation has now changed and as he’s more than half way through contract BH has agreed he can VT with no additional payment. We received a letter from them dated 19th April with a form for us to sign and send back with £75 for them to arrange collection of the vehicle. They will hopefully receive this on 26th April, are we therefore ok to cancel our direct debit now which is due to be paid on 28th April ? It says on the form that it can take up to 14 days for them to arrange collection.

    • Hi Marie. Once you have informed the finance company in writing that your are exercising your right to VT the vehicle, you can cancel the direct debit, as you are terminating the agreement immediately. It doesn’t matter how long it takes for the collection to take place.

  117. Help please, I have had a letter from a receiver company on behalf of Peugeot finance, telling me the car i handed back, had an inferior repair to its paintwork ( car was keyed by vandals, and repaired by local mechanic ) and billing me for over £700 to put it right. I am no longer the registered keeper of the car, my payments were up to date, and only handed it back under the 50% rule, as we no longer needed 2 cars as partner got job local to home. Do I have to pay this company the £700? If I ignore the letters, could charges increase?

    • Hi Ruth. The relevant section of the legislation only refers to “damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”. This is a very elastic term, which leaves the door open for finance companies and their collections agents to exploit anything they think could charge you for.

      If you are adamant that the repair work was of a suitable standard, you can stick your guns and ultimately face them down in court if necessary. If you know the job wasn’t up to factory standards, you should probably try to negotiate with the collections agency. Regardless of what they tell you, this £700 is completely negotiable and their goal will be to get as much of it from you as possible.

      Ignoring the letters is not wise, as it will simply escalate the matter. Set out your argument or offer clearly in writing. For more advice, I suggest visiting the excellent consumer advice site

  118. Hi Stuart – I am in the process of voluntarily terminating my car and I have a form to sign (so glad I’ve came on here before I’ve done so), they’re saying that I need to pay any excess mileage and for any services that aren’t in accordance with the manufacturers guidelines. I get that they’re trying to pull a fast one with the servicing issue. I have a friend who works at another dealership of a different car and he has given me some advice but I’m just concerned about the excess mileage thing – do you know if there is anything written in law to say I don’t have to pay it?
    They’re also trying to get me to pay to have the car collected.
    Your advice is appreciated.


    • Hi Lucy. They will always to claim charges for excess mileage, but if you stick to your guns then you should be OK.

      The finance company can expect you to deliver the car to a reasonable location (usually considered no more than half an hour’s drive away). If a reasonable location is not available, it is their responsibility to collect the vehicle, not yours.

      Have a read of this excellent thread over at legalbeagles, which discusses the ins and outs of VT in great detail.

  119. Hi Stuart,
    I recently just took out a lease on a Mercedes car. I paid them £300 deposit and £300 setup fee. The next payment was to be the 9 months down payment on receipt of the car. In the meantime whilst waiting for the car I have became unable to work due to a back issue. I still haven’t received the car yet though. Where do I stand? Can I get out of this.
    Regards james

    • Hi Jeremy. In theory, the dealer and/or leasing company can hold you to your agreement, but in reality there’s not a lot they are likely to do if you cancel before the car. There may be a hefty cancellation fee, but it’s likely to be a lot less than trying to get out of it once the car has been registered.

  120. I voluntary surrendered a car back in 2014 all my surrender paper says I enclose my insurance policy and certificate for the vehicle and agree that they are entitled to deal with my insurers on all matters relating to the insurance of the goods do I still have to pay the finance on this car

    • Hi David. Voluntary surrender of the vehicle is a different legal concept to voluntary termination, and I am not familiar with the details. With voluntary termination, you don’t need to provide insurance information or anything along those lines. I would suggest you visit the excellent consumer legal advice website at

  121. Hi Stuart.
    My partner and i recently called our fiat car finance team to sort out a vt on our car finance. We have paid over 50% of the agreement and the milage is well under the allowance and the car is in excellent condition apart from a tiny car park door dent and a couple of alloy scuffs. They quoted sending a pack out for us to sign to proceed. Would signing this be ok as the milage is well under? Im just concerned they will try and bill us for the very minor issues which i would consider normal wear with car being 3 years old. Any advice would be great before we proceed. Thanks


    • Hi Rob. You don’t need to sign any of their forms – you have cancelled the agreement. Anything you sign may potentially waive your rights, so be careful before signing anything. For more detailed legal advice on proceeding, visit, which is an excellent source of consumer legal information.

  122. Hi,

    I have a car on a 4 year pcp deal, I am only 6 months into the deal, can I simply hand the car back at the half way (2 year point) ?


    • Hi Gordon. No, you can’t. You have to have repaid 50% of the Total Amount Payable, which includes the balloon payment at the end of the agreement. On a four-year PCP, this normally means your VT point is sometime after three years (depending on your deposit and the size of the balloon/GMFV amount)

  123. Ah, thanks Stuart, a little longer than I’d thought ! GFV is around £20000, I put £5000 down with a £5000 contribution from the dealer

  124. Hi Stuart, please could you help! I want to VT my BMW, I have £640.25 to pay until I’m at 50% so I can VT as long as I pay that, I asked them if I could make that payment now and they said no, I have to sign the VT paperwork that they’ll send me. I know that I don’t have to sign any paperwork they send me. Am I ok to include on my letter of termination to them that they can invoice me that amount and that I will be stopping the direct debit effective from today? Also they are saying I will be charged the excess mileage and that this is a condition of any VT; I’ve seen that excess mileage is not legally required to be paid but could they have included a specific clause somewhere that for BMW it is payable?
    Thank you!

    • Hi Danielle. You do not have to complete their forms. When you write to the finance company to voluntarily terminate the vehicle, you are ending the contract. You don’t have to fill anything subsequently unless you are signing a form to confirm that you agree with their inspection of the vehicle when you hand it over (and if you don’t agree with it, don’t sign it or make your own corrections before you sign it).

      As stated in the article above, excess mileage is a contentious issue and the default position from the finance company is that you have to pay it. However, the weight of legal opinion is against them and they have never taken it to court (no finance company has, because they know they would be likely to lose). BMW Finance has had a ruling from the Ombudsman in the past regarding excess mileage, but this has no legal weight and is very different from a court ruling. For more information about this topic, have a look through the LegalBeagles link in the article.

  125. Hi, I am looking to try and Voluntary Terminate my current car that is on a PCP agreement. I have paid over 50% of the agreement as the 3 year contract ends next month. There are no excessive marks on the car at all that isn’t ‘general wear and tear’. However, it did miss its 1st ever service, i have had the second one done and the next is due next month when the contract is up. I am also around 12,000 miles over the agreement, and with a 14.9p per mile rate that is taking me well over £2k which is the reason i am looking into the voluntary termination option. Where do i stand with this? Am i right in thinking i will not owe mileage? But what about the missed first service? Also, i read somewhere on here that they have to arrange to collect free of charge, however they have already stated that would be a £70 fee, if you could please advise on all of this, it would be greatly appreciated.

    Thank you

    • Hi Katie. The finance company may dispute the VT because of the missed service, but it should be OK. They may try to impose a charge on you for it, but it is not really enforceable. The law only states that the car must not have “damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”, but this is not described and is therefore open to interpretation.

      Likewise, there is ongoing debate about the validity of excess mileage charges. The prevailing consensus seems to be that the finance company’s contract cannot take precedence over the law, therefore excess mileage cannot be charged. No finance company has been game to take it to court because the likelihood is that they would lose, although one or two have claimed favourable opinions from the Ombudsman and used that as a threat against customers (even though it carries no legal weight).

  126. Good afternoon Stuart.

    I am currently in a PCP with Peugeot, and I have two issues.

    1. Whilst discussing terms prior with the salesman, we verbally agreed on 9k miles per year. We shook hands then he left to double check with manager. When he returned with paperwork I signed after flicking through, without noticing that his manager had changed the mileage to 6k miles a year, and without being told anything by the salesman or manager. I returned the next day after noticing, was told nothing could be done and I got much the same from finance company. Obviously I felt frustrated, and that I should have scrutinised paperwork to the last letter maybe, but I felt we had reached an agreement and was unaware. I would just like to hear your thoughts. I’m increasingly frustrated but have always felt I don’t have a leg to stand on, just wanted to hear your thoughts.

    2. With a VT on a PCP, can you do it before you pay half? Or is it pay half and then go ahead with a VT only.


    • Hi Paul. If you have not taken delivery of the car, you can simply withdraw from the agreement and go through the application process again with the correct mileage. However, the monthly payment will almost certainly increase noticeably to cover the extra depreciation of a 50% higher mileage allowance. Other than that, there’s not a huge amount you can really do as a verbal agreement or understanding is worth nothing – the salesman can swear blind that you agreed on 6,000 miles per year and that you are lying…

      You can VT the car at any time, but you still have to pay half the Total Amount Payable. So if you have not reached that point then you would have to pay the difference in order to complete the VT.

  127. Cheers Stuart.
    I thought as much, basically got screwed over there. Thanks for the swift reply. I have had the car a while, but wasn’t sure on my rights. I’m VTn as soon as I can.

  128. Good Morning

    I need some advice, I took out car finance on a vehicle which was valued at the time as £8000. the total amount payable on a 60 month term is £20000. I have paid just over £14000 and now sadly the car has broken down and the repairs are far more than I can afford. I don’t know what I can do and was hoping I could get some advice on this. Could I terminate early?

    Thank you

    • Hi Mark. The termination amount you have to reach will be listed in your finance contract, but it sounds like you have already passed that. The problem will be that the car requires repairs which are beyond normal wear and tear. These will have to be addressed before you can hand the car back or else the finance company will simply bill you for the repairs – and probably at a much higher cost than you getting it done yourself.

    • Hi Stuart, I have just received my VT form from Citroen finance, they are asking me to fill in the form and return it back to them. With this I will be agreeing to be paying to additional mileage and damages, is there another way I can go through with the VT without filling in this form.

    • Hi Marc. When you write to the finance company to VT the car, you are providing all the required written notice required to end the contract. You do not need to fill in their forms, and they cannot reject your VT if you don’t fill them in. The only form you need to worry about is the one where you sign to agree with the assessor’s inspection of your vehicle – and then only if you agree with every single point on that form.

  129. Hi Stuart. I have a 4 year deal on a new BMW at £314 per month. I was looking to VT at around the 24 month point and pay any difference however I called BMW to enquire about the process and they are saying I owe 50% of the entire car price, not the agreement over 4 years. I have an optional balloon payment at the end which I was under the impression was not part of my finance deal as it is a pay it or hand the car back deal.

    I currently owe £19600 on the full amount according to them but they say I must make a minimum of 31 further payments before I can VT at 50%. Is this correct or are they just trying to fob me off?


    • Hi Trevor. As explained in the article, the VT point is 50% of the Total Amount Payable, not halfway through the term. You have borrowed the full value of the vehicle (excluding deposit), and have to pay off that amount plus interest and fees. With a PCP, instead of paying the whole thing off in cash, you usually pay off some in cash and then give the car back at the end as the final repayment.

      So if you want to VT, the amount is effectively 24 of your 48 monthly payments plus half the GMFV, as you have borrowed that value.

      You don’t have to make 31 payments to be able to VT the car (you don’t have that many payments left, for a start). You can VT at any time, as long as you pay up to the 50% mark, so it would be whatever that value is minus what you have already paid.

      This should all be explained in your finance agreement.

    • Ah right ok – wasn’t aware the final payment was included also. May as well keep the car for the full term then or I’m effectively paying for nothing. Thanks for the info.

  130. Hi Stuart – Just checking the VT provision has not changed as this thread is now a few years old. I’ve paid 50% of the agreement and BMW finance are telling me that I need to pay excess mileage – I expected them to do this but then a friend has suggested that the law may have recently changed (my finance was taken out in 2012).


    • Hi Jonathan. No, the information in this article is still correct. The only thing that has changed is that BMW Finance seems to be much more aggressive these days in chasing payments for excess mileage.

    • Perfect! Thanks! If we are still a little bit away from the 50% would you advise sending a cheque, asking for a bill or not trying to Vt until we’ve paid the full 50%?

    • Thanks that’s great, another quick question. If I’m just short of 50% should I send a cheque ask for an invoice or wait til I’ve paid the full 50 before I Vt?

  131. Hi Stuart thanks for the reply previously. I have been contacted by the reclaims department for collection of my car, which is this Wednesday coming, from which point do I cancel any further payments? And also what’s the chances of getting a loan/finance on another car now I have VT this car? Thanks

    • Once you have written to the finance company to VT the vehicle, you may cancel the direct debit – since you have terminated the contract.

      The right to VT is covered by law and does not affect your credit rating. However, the same finance company may be less likely to offer you another finance contract given that you have just terminated this one.

  132. Hi I’ve had a Nissan Note which I’ve had on pcp for 18 month I have continually complained of issues with the car, loss of power when on the motorway a chuggering, to be told nothing is showing on the diagnostic. It has now cut out while driving on a country road and from starting it has lost power. What are my rights if I am unhappy with the car ???

    • Hi Therese. If the dealership is unresponsive in resolving problems with the vehicle, you can take it to another dealer or take the matter up with Nissan GB head office.

      Your rights will be largely limited to the warranty on the vehicle, if any. If you have had the car for 18 months, you are beyond any right to reject the car under the Consumer Rights Act. Without knowing what the faults causing your problems, it is impossible to say whether you would have to spend a decent amount of money to get the car fixed before you can consider selling it or returning it as a voluntary termination.

  133. Hi Stuart, I’ve filled in the forms to send back my mini. I haven’t exceeded the mileage and there’s no damage. However the M.O.T runs out in a few day (probably before they pick it up) also the insurance has expired and also I have missed last years service and also the arms that hold up the boot have gone (hydrolics) do you think they will try to bill me for anything? Thanks Lizzy

    • Hi Lizzy. Your car will have to have a valid MOT when it is collected, so you will need to pay for that. You will also have to have it insured until they take it off your hands, so you should renew that ASAP. You may well be charged a penalty fee for having missed the last service, as it is usually a PCP requirement that the car maintains a full manufacturer service history. Don’t know about the boot issue – they may or may not be interested in that.

  134. Hi, 5 years ago in VT my HPI in my car , phone the crédit company to come check this vehicle . But they didn’t show up on the day agreed . As I already bought a new car , I left the old one Sorn till the road tax ended , and the police took the car . Now I’ve been ask to pay more than £2200 for the rest of the HPI contract . I still got the keys from this vehicle . I’ve been told that the car doesn’t belong to you till you pay the final payment , so can you help to sort out this mess . I can’t pay and won’t !!

    • Hi Gilles. I’m not sure why you have let this drag on for five years simply because the collection people didn’t turn up on the agreed day. If the police have got involved and taken the car away, there is clearly more to this story than you have explained. I think you probably need to engage a solicitor to work through the issue from beginning to end and help you sort it out.

  135. Hi Stuart
    You may already have answered a similar query apology if you have, there have been a lot of comments submitted here, too many to sift through for a response.
    I am about to hand back my vehicle based on the VT and pay just over 1000pounds to make up the shortfall, I have a new vehicle waiting to be picked up but the new dealership has put terms on the new finance agreement. The terms are that the current finance company have to supply a letter stating that they have ‘no further interest’ in my current vehicle before I can collect the new vehicle.
    My current finance company want to collect, and inspect the vehicle first, determine if it is in good condition, put it up for sale at auction and once sold will supply the letter of no interest, in the meantime I will be without a vehicle. Is this normal?
    Surely if I terminate the agreement under the VT terms which in the agreement only state that if I wish to do so I only need to pay at least half of the finance, that should be the end of it. Why are the current finance company now adding additional terms to the agreement?
    I am self-employed a rely on my vehicle for work. Once the car is collected on Wednesday I will be unable to travel for work, so I need the letter of no interest as soon as the car is collected because as far as I am concerned that is where the agreement ends.
    Thanks in Advance

    • Hi Carmen. It is unusual for a finance company to insist on getting this confirmation that your previous agreement has been concluded. Your credit rating (Experian, Equifax, etc.) will show that you currently have a finance agreement in place which you are paying off, and this is an area of concern for them.

      it is not unusual for your current finance company to not be able to supply the letter required until the vehicle is sold at auction. The car belongs to them and not you, so they will retain a financial interest in the vehicle until they sell it. Once you terminate the agreement, there is nothing else you should need to pay unless there is damage over and above normal wear and tear.

      The new finance company may well be concerned that either you are overstretching your finances and are not prepared to finance you until you confirm that your current agreement is concluded, or that you are actually trying to arrange an Accommodation Deal, and that the new vehicle will be for someone other than you. Finance companies are always suspicious of anyone having two finance agreements in the same person’s name at the same time.

  136. Hi, we have a 2016 Kia Sportage on a regulated PCH contract.

    The front doors have suffered a major failure – essentially splitting in two. Despite whatever repairs are offered by KIA under Warrantee – we have no confidence in the vehicle.

    CCA legislation must be of help here, I.e the item not being of satisfactory quality?

    KIA will want to fix…we want out. Any comment pls?

    • Hi James. if you are on a PCH agreement, you will need to argue the matter with the finance company, as you are basically renting their car. If you feel the vehicle is unsafe or not fit for sale, it will be up to the finance company to replace or repair it. As you don’t own the car, you can’t reject it or control how the matter is handled.

    • Hi Simon. Officially, there is nothing that you need to sign.

      The agent collecting the vehicle will create a condition report, noting any damage or scratches on the vehicle. You should sign this only if you agree with everything on it. If you disagree with anything, you are entitled to add your own comments or alterations before signing. Signing your agreement with the report, including your own comments, means that you have written agreement of the vehicle condition when it was collected by the finance company. So if they come back to you with charges for damage, you can refer to the condition report if you plan to contest the charges.

      Other than that, there is nothing that you should need to sign. There may be forms that the finance company wants you to sign, but you don’t need to and they are often written in a way which signs away your legal rights.

  137. Hello I recently just got a car on finance 3 days ago and I don’t feel at all happy with the car it’s smaller than I thought and I feel for the price I’m paying I could of got a much better deal elsewhere, my monthly payments are 268 a month is there no way out of it now?

    • Hi Faye. No, you don’t have any particular legal right to get out of it now. You can cancel the finance agreement, but that just means you will have to pay cash for the car instead. For more information, have a read of our article about buying a car and then changing your mind.

      The issues that you have raised are ones that you should have looked into before signing the order form. It’s too late to change your mind now (well you could, but it would probably be very expensive).

  138. I thought it would be useful to provide an update with my case. I arranged for the car to be returned and it was meticulously inspected by both the inspector and collector, they couldn’t find anything wrong with it other than claiming one of the tyres was slightly worn.

    Some time passes and I receive a letter requesting payment for the excess mileage (not for any other costs of damage). I write back using the template letter and I receive a response that they are investigating my complaint. I never actually referred to it as a complaint or asked for it to be investigated. I simply said they were wrong and I wasn’t paying.

    The outcome of the investigation is as expected, they claim they are in the right to levy the charge and that they see excess mileage as putting the vehicle out of good condition and therefore not in good condition.

    I am writing back to repeat that if they want the money they will need to issue a court order. I am also contemplating whether to also write to the financial ombudsmen – any thoughts?

    I’ll let everyone know how it concludes as I know it can be a bit daunting when you get to this stage!

    • Quick update and question; they have sent a letter, clearly sent before they received my last letter, stating that if I don’t pay within 28 days it may be reported to the credit reference agency and affect my credit rating. I take it this is nonsense?

  139. Hi Stuart, i have 16mos left from a 5 year finance and i am planning to return the car for circumstantial reason.
    the problem im having is that i failed the service agreement. i missed the 3rd annual service and lost the vauxhall lifetime warranty, Do you think i will be charge?


    • Hi Melvin. It will be a grey area, much like excess mileage. You might get a helpful answer from, which is a free consumer legal advice website.

  140. Hi,

    i am am thinking of selling my car which I am almost two years into a hire purchase agreement. I fished out the details last night and have noticed that the car registration number is wrong. I am paying for a car registered to someone else that is 4 years newer than mine. Also the proposal number is different from the proposal number of the document I signed.

    I have not yet contacted the finance company as I would like to know where I stand.

    As as I want to sell the car. I am hoping this might just save me the bother of paying off the HP and then selling the car and they may just take the car back?

  141. Hi Stuart,

    I wonder if you could clear up a grey area that I’m in need of clarification with. I bought a car on a PCP 36mth deal with a £6k deposit, however the car has gone over the agreed mileage two years in. So now with just under 10 months left, what is the best way to figure out if I’ll see any of that deposit or was that indeed part of the depreciation value over time. Can i expect to realise any of my deposit at the end of term? I intend on buying from the same dealer but at a loss when trying to get a clear answer with regards to my position? Any help would be most welcome.

    • Hi Cee. You are not going to see any of your deposit again; it is a downpayment on the car and is not returned at the end.

      If your car is worth more than the GMFV at the end of the agreement, you can use that difference, called equity, as a deposit towards your next car. If you plan to give the car back to the finance company at the end, they will charge you for excess mileage over and above that agreed in the contract.

      For more information, have a read of our article about how PCP car finance works.

  142. Hi there. My girlfriend Bought a car without a very high 18% apr from santander a few years back. She was not aware it was a personal loan (as they stated on the phone) as in all documentation she has it clearly states that the finance agreement is for (goods) volvo c30 etc etc etc. Now when she asked to hand it back she was met with the news it was a personal loan and she cannot do that.

    She and i both believe she was mis sold this as a personal loan. Nothing in the documentation describes it as a personal loan as i stated. It even states (goods. Volvo c30) so for them to say they have no interest in car seems a bit far fetched and underhanded if it quite clearly states the car on the finance agreement. What are the options here? She already contacted the financial ombudsman and they quickly discovered together that this is a common practice that some companies use to remove some of these rights consumers enjoy.

    Also there’s a mistake on the contract as it were. They have written and signed for some date in 2012 when the agreement was made in 2013. This alone they reckon should be enough to get out of the agreement. What are your thought’s?

    • Hi Ian. In terms of how you argue your case, you will need to get legal assistance. The finance agreement should state clearly what type of finance it is. Even if the purpose of the loan is to purchase a vehicle, that doesn’t mean that the finance is secured against the vehicle. I have no thoughts on the date error; you will need to get a lawyer to make your case on that.

      If you run an HPI check on the car, it will show whether the finance company has any interest in the vehicle. If it is a personal loan, they will not have any interest; if the finance is secured against the vehicle, it should show up.

      It is true that some finance companies are moving away from secured finance (like PCP and HP agreements) in favour of unsecured finance (leasing or personal loans) because they do not have voluntary termination rights, but that is not surprising given the number of people who are using voluntary termination clauses to walk away from their financial obligations.

  143. hi, can you advice us please. we purchased a car in march on hire purchase agreement. the car went wrong after about a month.the garage that sold it to us has agreed to pay for the repairs but its now august and we still have no car to use and are making payments to the car finance company even though we don’t have the car to use.many thanks

  144. Hi

    I purchased a vehicle from Evans halshaw back in June on PCP on a 48 month agreement paying £142 monthly. Unfortunately within the last few weeks I have now been made redundant and can no longer afford the repayments. As it stands I am now outside of the cooling off period so cannot just return the car. How, and what should I do?


    • There is generally no cooling-off period for buying a car. If you can’t afford the payments, you will need to sell the car and pay the settlement to the finance company.

      Unfortunately, if you have only had the car for a couple of months, the settlement figure will probably be much higher than the car’s value and so you will have to pay off the difference, which could be thousands of pounds. For more information, have a read of our article about settling your PCP early.

  145. Hi Stuart,

    I’ve got a HP contract with Mini. I want to exercise my right to terminate. After my next instalment on 1 September 2016 I will be £86.82 short of the 50% paid off. But I want to get rid before October as that is when the first MOT is due. My questions are:

    1) can I pay this additional amount now to bring it up to 50% repaid and then send a letter to terminate on 2 September?

    2) the car has been fully serviced by a Skoda garage who have used non-genuine mini parts (brake pads, discs, tyres) but like for like in terms of quality, size and speed for tyres etc. Mini say I will be charged for any non genuine parts – the charges will be for the parts and labour. Is this correct under VT?

    3) I’ve been told by Mini anything that is classed as “Amber” in terms of servicing must be completed before returning. Is this correct? Anything that has been red I have had serviced.

    Appreciate any advice.

    • Hi Selina. You can terminate at any time, as long as you pay the balance to bring you to the 50% point. Once you terminate the agreement, the finance company will invoice you for any shortfall from the 50% point, along with any other charges.

      With regards to servicing, you are in a bit of a grey area. In the same way that the finance company will certainly try to hit you for any excess mileage, they will do the same for service issues. I would suggest visiting for more information, as they are a consumer legal advice website who can advise you better on legalities. You may be billed for not having the car fully serviced by a MINI dealer, with genuine MINI parts, on time every time.

    • Thank you for the advice Stuart – I’ll check out LegalBeagels.

      Do you know where I would stand on point 3 regarding issues which are Amber on the car but not yet showing on the dashboard requiring servicing? Do I have to bring them up to Green? As Amber means they are still legal and fine but get ready to service.

  146. Hi there,

    I have sent my VT letter to the finance conpany for my car, stating I would terminate the agreement within the next 14 days. I am 1/2 way through my payment and recieved my VT pack from the finance company, that I requested from them. It came with forms to sign but I didn’t sign them, i put my request in a letter. It has now been 7 days since I sent the letter, and I haven’t even heard from the finance company that they have received my letter, let alone make arrangements for the car to be assessed and collected. What would you advise I do? I don’t want to cancel my bank DD until I have confirmation that the VT is happening, then I don’t want to pay another month when I don’t have to either.

    thanks, Mhairi.

    • Hi Mhairi. Once you send the letter informing the finance company that you are terminating the agreement, it is terminated. In your case, you specified a date within 14 days, so the agreement terminated on whatever date that was. Everything that happens afterwards is after the agreement has been terminated. You can and should cancel your direct debit so that the finance company can’t take any further money – if there is any shortfall, they will invoice you.

      While the car is in your possession, you will need to keep it taxed and insured. The finance company should eventually respond to tell you where to return the car, or that they are coming to collect the car. If they do not contact you, you can contact them to advise that you will charge them storage at a rate of £X/day if they don’t collect it.

    • Thanks very much – i appreciate the response. Today, they have actually contacted me saying i have to fill in the paperwork in the VT form they sent; however i have responded saying that i have informed them of my decision, and there is no need by law to sign any of their forms (which is the same advice you have given others on this page) – was i correct to do this?

      If i stated that i would terminate the contract 14 days from the date on the letter (which is up on Thursday next week), do i only have to keep the car insured until Thursday? Because i then won’t be insured on the car after Thursday, am i within my rights to get them to come to wherever my car sits as of Thursday (i.e. a garage or my home address) and they have to come and collect it from there? Or should i put it to a secure paid storage lot and they can collect it from there. I’m assuming there will still need to be an inspection of the vehicle before collection, even if it’s outwith the 14 days that i would terminate my agreement in?

      Thanks again.

    • Thanks. As of the date of the termination – Thursday this week – should i then have my car in a secure storage facility to ensure that no damage happens to it after my agreement has been officially terminated? Also, if this is the case, i won’t have a car to drive, but still need a car to use for getting to and from work etc.

      So what do you do if they haven’t come to collect the car before the agreement is terminated? Do i have to hire a car to use until they come and collect my VT car (which will possibly be in a secure storage unit as of Thursday if that’s what i have to do)? And charge them for the hire of a car on top of the storage of my current car until they come and collect my current car i am VTing? Do i just offset the amount of money they are due me with the amount of money i am due them, and pay the outstanding amount?

      Thanks. This is all so confusing but i really appreciate the help and advice. Mhairi

    • You’re getting ahead of yourself a bit. You have terminated the agreement and they have to inform you where to return the car or when they will collect it from you. Until then, you keep it exactly as you have done up until now.

      It is unlikely the collection or return will be completed by Thursday this week, so you will need to make other arrangements – that’s not the finance company’s problem. There is no requirement for them to have taken the car back by Thursday and you can’t charge them for hiring another car until this one is gone. What you do to replace this vehicle is your problem, not theirs. You are terminating the contract on this vehicle, and they are not under a deadline to put everything in order. They will want to sort it quickly anyway, since they have an asset worth thousands of pounds that they are no longer getting money for and is still in your possession, so they will want to get it to auction and sold as soon as possible.

  147. Hi Stuart,

    I took out a car on a HCP for 42 months. This was £189.38 per month. With a final payment of £3,227.50 if i want to keep the car.

    I’d like to give back the car after 12 months. I would’ve paid £2,272.56 off. I’m not sure if that includes interest.
    The car was worth £9,295 when i took out the finance.

    Is it possible to hand the car back at that point? (30 months left.)

    Any advice would be much appreciated.

    • Hi James. You can return the car after 12 months, but you will need to pay up to the 50% of the Total Amount Payable, which will be thousands of pounds.

      Your other options is to sell the car and settle the outstanding finance, using the money you get from selling the car plus any extra (which will again be thousands). For more information, have a read of our article on settling a PCP early.

      Basically, there is no way to give the car back that won’t cost you a load of money.

  148. Hi stuart wonder could you help us out. We took out a hp last october on a vaux insigna. Since then we have discovered the wife is pregnant with twins…mad! Anyway having already 2 kids we obvisouly need a bigger car. 7seats. Now since we will in necitve equity with the insignia we are finding it really hard to get fiance for the bigger car.when i say that what i mean is figures that we can afford every month. Could we vt the insigna but still get finance for another car??.

    • Hi David. You have to pay 50% of the Total Amount Payable to VT your current car. If your finance agreement started less than a year ago, you will be a long way short of this amount.

      If you do VT a car, it should not affect your credit rating with other finance companies in any way as it is your legal right to do so. The only catch is that the same finance company may decline another finance application from you.

  149. Hi Stuart,

    Thanks for the advice so far. I’m hoping you can advise me. I have a Corsa which is due an MOT but needs repairs for almost the same value of the car itself. I’m looking at a VT but I don’t know if the vehicle needs to be taxed and MOT’d before I can VT. Can you please advise?


  150. Hi Stuart
    My lad is in the armed services and wants to hand back his BMW after about 10 months into a low deposit 3 or 4 year PCP deal. The problem is lack of funds at his disposal and feet dragging on the part of BMW – Any advice on his rights or best action plan?

    • Hi Pete, Your son has no particular rights, so there’s no point complaining that BMW are dragging their feet.

      He can either settle the finance, which will mean settle a large negative equity, or terminate the contract and pay whatever is needed to reach 50% of the total amount payable, which will probably be even more.

  151. Hi Stuart, I wondered if you would be able to help. My father took out a PCP with Mercedes finance in October 2013 this was for 4 years. He unfortunately passed away august 2015, since then I have been fighting with Mercedes to take the car back, I have continued to make the monthly payment, but they are asking for £5500 to send the car back, can they do this?

    • Hi Gemma. With any PCP finance agreement, the person taking out the loan has borrowed many thousands of pounds from the finance company and that has to be settled one way or another. When your father passed away, the finance company became a creditor of his estate as it is still owed whatever money remains outstanding.

      The £5,500 amount they are asking for is likely to be the amount required to repay 50% of the Total Amount Payable, which would allow the executor of the estate to voluntarily terminate the agreement and give the car back.

  152. Hi Stuart.

    I have a 49 month pcp with Barclays. On the agreement he total amount payable is £14643 yet the termination figure is £11160 which is clearly more than 50%. I’m just trying to understand how they have calculated that ? As part of the deal I traded in my car for £7000 and used this to clear the outstanding finance unless they have added this amount also.

    • Hi John. The Total Amount Payable (TAP) includes your deposit, the amount borrowed (including the GMFV/balloon amount) plus any interest and fees. The VT amount is 50% of this total.

      Your numbers do not seem correct unless there is an error in the paperwork or you are reading the TAP incorrectly. If the VT amount is £11,160, then the TAP should be £22,320.

      If your part-exchange was valued at £7,000 but there was still finance owing on it, then net value of your car was whatever was left after the finance was paid off. If your finance settlement was more than £7,000 then the additional amount (negative equity) may have been added onto your new finance agreement.

  153. Hi Stuart – I’m reading your article with interest, however it doesn’t agree with my recent experience and I thought you would like to hear it. I recently changed vehicles and obtained a new car on a personal lease with a delivery date of March 1st. At that point I had approximately 3 monthly payments left on the PCP agreement on my then current vehicle (something around £500). I rang VAG Finance happily armed with a debit card to pay off the remaining amount and square off the finance so the car could be returned. However, the VAG Finance advisor thought this was a very silly thing to do and advised me to perform a VT instead and save my money. Somewhat amazed I did query this, but they said they suggest it all the time. Basically, rather than trying to avoid and obfuscate a VT being actioned, VAG went out of their way to offer and suggest I do a VT to clear my obligation as pain-free as possible. I received a booklet in the post outlining the expectations which were entirely reasonable (usual wear and tear dings/scratches etc completely OK) The vehicle was collected by a third party auction trader who made his checks against the same booklet and drove off. Utterly straightforward no-nonsense experience from start to finish. Also worth mentioning that as far as VAG Finance were concerned, my payments stopped from the point of my initial phone call to them requesting the VT. One of my payments was still pending, and that payment was indeed returned to me. Amazing huh?

    • Hi Charlie. Your experience is exactly how it should go, but sadly it doesn’t work out that way for many people. Mind you, if your car was clean and straight, fully serviced and within the agreed mileage, it should be pretty straightforward.

      Also, given that you only had three months left on your PCP and have basically paid off all the interest anyway, it was probably quicker and easier, with no financial loss, for the finance company to process a VT than any other settlement – especially if you are sticking with them for your next finance agreement.

      Glad it worked out well for you.

    • We can’t provide specific advice on a particular finance agreement to an individual, as there are strict FCA rules about provision of advice. We can only provide general advice on how such agreements work to help you understand your position.

      You will need to speak to your finance company for additional explanation, or speak to an accountant who can discuss your agreement and situation in detail.

  154. Stuart, I am currently dealing with ALD. I have asked that they take back my Volvo on VT. Initially insisting I wait for a letter to sign from them they backed down and said I would need to call back for the settlement figure. They also stated that I must either drive the car to Bristol (250 miles from my home) or pay £125 for colletion from a garage of my choice!? They also said that they would not collect the car until collection payment was made by debit/ credit card… Is this correct and if not where could I throw some legislation at them!

    • Hi Scott. It’s a grey area and you will need to check your contract to see if there are any conditions. I would suggest visiting the forum at, as I think they have discussed this at some point.

      In essence, if you are terminating the contract, they are under no obligation to assist you. I don’t think there is any kind of legislation to cover the collection of the vehicle, so it is likely to be a case of whatever you can negotiate.

  155. Hi Stuart.I have received a letter back from the finance company after doing a vt on my 07 plate Ford Focus, it says I have nothing to pay to date other than any costs following inspection by independent assessors which I have yet to book also any missing items. What worries me is there two very small dents on one of the back passenger doors and a few scuff marks on one side of the front bumper if they are seen as damages and not wear and tear how much they will charge me to repair them,also of the missing items I have no service history book when I bought the car the dealers said the previous owner had lost it and I haven’t had the car serviced so have no proof of service which it says they will charge £300 for. I don’t want to end up paying out £300 plus a load of money for damages any advice would be greatly appreciated.

    • Hi Ken. If you have receipts and service reports for the servicing you have had done while you have had the car, that should count as ‘proof of service’. That and the damage is likely to be a matter of negotiation between you and the finance company, as the legislation does not provide guidance as to what constitutes damage beyond normal wear and tear.

  156. Hi,

    I have recently purchased a car on finance and have only paid two months worth of payments. Circumstances have changed and I need to terminate the car finance agreement and hand the car back.

    Is this possible?


    • Hi Jamie. What you are wanting is not possible. You would need to settle the outstanding finance and sell the car. You are almost certainly going to have a considerable amount of negative equity, as you will owe more than the car is worth. For more information, have a read of our article about settling your car finance early.

  157. Hi stuart, i have had my car on hcp finance for just over 1 year now, I’ve always struggled with keeping up with monthly payments, i have defaulted a few times but have always paid it, I’m now in a position where i really need to terminate the contract as husband will be buying me a car out right to help save monthly costs, is this possible? am i able to terminate it if i explain my financial difficulty? and if so, how do i go about it?

    • Hi Ellie. No, there is no clause for you to escape your finance agreement due to payment difficulties. You would need to settle the agreement in full and then sell the car. It might be more useful for your husband to put the cash into your current finance agreement rather than buying another car and trying to give this one back.

      For more information, have a read of our article about settling your car finance early.

  158. Hi Stuart,

    I took out a PCP (49 months) in November 2014. I am coming up to two years with the car but I am way over my mileage allowance due to various circumstances, mainly changes to office location. Under the terms of the voluntary termination how relevant is the excess mileage? If I find I have paid over 50% of the agreement over the next few months but my mileage is over the total mileage for the total agreement is this an issue? And would this prevent me from VT?

    If this is an issue can I pay a certain amount now as a lump some in order to reach 50% before I go over the total mileage?

    Your thoughts would be appreciated.


    • Hi Alex. As our article and replies to other readers explains, there is disagreement over whether excess mileage. Many legal experts have contended that it can’t be enforced, but the finance companies will always try to charge you for it in the hope that you will pay up. It has never properly been tested in court (as far as I am aware), as no finance company has been prepared to take a customer to court for excess mileage.

      Usually, if you are clear in explaining that you know the legislation and your rights in not having to pay excess mileage, the finance company will back off. If we are talking a large number of miles that would cost thousands of pounds in excess mileage charges, the finance company is likely to be much more aggressive in trying to successfully charge you for the money.

  159. Hi, I am more than halfway through a finance agreement with 21 payments left to make. I missed 1 month, that has now been repaid, so am up to date, however mr car is now worth less than half the amount outstanding. It is due a service, which I will have done, and also need new tyres on the front, so getting them done too. I will then look to do a VT, but am a little worried that the finance company ( Motonovo ) may come back and bill me to fix Aircon system. the heater blower has failed. Do I have to fix this or will they try to bill me ?? After paying for service and tyres I really cant afford to fix this as well. Any advice would be greatly appreciated.
    Thank you.

    • Hi Derek. It will depend on how thoroughly the finance company checks the car before sending it to auction. If they notice the air-con and heater have failed, they will certainly try and bill you for them. As part of the vehicle collection, their agent will complete an inspection form and they will be required to check most of the car’s functions. It will depend on how attentive this inspector is at his job.

  160. HI Stuart

    I wonder if you could offer me some advise please
    I bought my wife a car for total price £24516.14 with a part exchange allowance of £3800.00
    our circumstances have changed and I had a company car but have chosen to opt out from December this year and take the car allowance, my wife now has a motability car on order
    on the PCP agreement there dosnt appear to be any mention of 1/2 and 1/3rds ?
    I am planning on using the wifes car in the interim until I can VT it
    the car was taken over 42 month 9k miles PCP and we are about 20 months in
    the initial balance to finance was £20616.14 the remaining balance is currently £16542 as of today
    the GFV is £11722.50 ,
    due to using it for work im going to ramp up the millage massively and whilst I realise if I run to the end of the term then I will be liable for a huge excess millage charge probably over £5k as I do 40k per year
    my plan is to start paying an additional £400 a month to get to VT point quicker and then get another car on a 5 year straight HP (I have vted 5 times in the last 15 years but never on a PCP)

    my question is what is the VT figure is it half of the initial cost of the vehicle or is it half the finance figure
    so is it £12758.07 or is it £10308.07



    • Hi Andy. The VT figure is half of the Total Amount Payable, which includes balance financed (inc. balloon), deposit, interest and fees. Based on your purchase price, the VT point is probably somewhere around £13-14,000.

      Your finance agreement should clearly state the voluntary termination amount. Failing that, the finance company should be able to tell you if you call them.

  161. Hi Stuart

    After some advice if possible please. I tried to find a similar scenario in the forum to not waste your time, but was unable to find anything.

    I rang mini finance to ask about the process for voluntary termination as I am due to emigrate to Canada next month. I was informed I could hand the vehicle back with no extra payments and would be invoiced separately for any damages incurred to the vehicle and any excess mileage.

    They sent me out a voluntary termination form to sign and when I replied asking if I could just send an email/letter to notify them of my termination, they told me I had to fill out and sign there form to begin the process. Before being informed by someone else and reading up on this website, I initially thought I would have to pay for excess mileage whatever the scenario, so yesterday I went ahead and signed the form and sent it back to speed up the process.

    After someone has informed me today that you don’t have to legally pay excess mileage and looking into it, I am worried that I have no leg to stand on after signing their VTN form. I got in touch with the finance company straight away to try and withdraw from handing my car back, but was informed it is irreversible now that I have emailed them my VTN form.

    In your opinion do you think by signing the VTN form, I now, have no way of getting out of paying the excess mileage? The form has a small section stating “an invoice will be sent to me for any excess mileage charge due in accordance with my maximum contractual mileage, which will be pro-rated to the date I return the vehicle, (Select Agreements only)”. As you have said previously, you do not have to sign the forms they send you and can just send your own letter, which means they have essentially mislead me into signing the form. Would this be a good case to argue paying the excess mileage when they ask me for it?

    Also, are they right in saying I am not allowed to cancel the voluntary termination and keep the car longer? Even though I have not yet sent my MOT cert and VC5.

    I would really appreciate any help of advice you could give me around the situation please, as I emigrate in two weeks and could do without forking out a lot of money for something I legally don’t have to.

    Thank you in advance.


    • Hi Alex. Once you fill in their form, you are essentially agreeing to whatever you have signed. you have also given written notice that you are terminating the contract, so it has effectively ended already. The finance company is under no obligation to allow you to cancel your cancellation simply so you can cancel it again under more favourable terms.

      In terms of your legal position, I would suggest visiting for some advice. They have plenty of discussion groups on voluntary termination and the legal processes. However, I think you have probably signed your agreement to pay excess mileage charges.

  162. Hi Stuart, On Monday I took my focus back to ford after 3 years instead of buying it.The car is in perfect condition, no scratches, bumps etc. I thought I would just hand it back and that would be that. They told me I had excess mileage as the contract was 6,000 miles per year.I had it in my head 9,000 as I commute from wirral to Liverpool every day.I had therefore done 26,000 (which as far as I was aware would be fine). It wasn’t until I checked my paper work and my previous opus contract had rent 9,000 and then I got a new car and as far as I was aware, the contract stayed the same,apart from the monthly payments.I would ever had agreed to drop the mileage by 3 000 miles.I am really annowed as Ford didn’t recall my calls. I asked to speak to their business managerelationship (apparently he’s not in until saturday) The manager was off. On my 3rd phone call a stand in manager spoke you me and apparently said there was nothing I could do as I’d signed the contract and that his staff would’ve pointed the mileage out to me. Do I have to pay as I did sign as I didn’t realise I had the paperwork from the previous contract stating 9,000 miles a year.Michelle

    • Hi Michelle. Yes, you have to pay. You didn’t read the contract before signing it, and now you have been stung by it.

      Even if the business manager at the time was a devious cretin who was knowingly deceiving you, there’s no way you’re going to be able to prove it. He will swear on a stack of bibles that everything was explained to you and you were comfortable with everything before making your decision to sign the contract. Unless you have some kind of written proof that you wanted an annual mileage limit of 9,000 miles, such as written quotes done at the time, there’s not much you can do except rant at them to make yourself feel a bit better.

    • Hi Stuart,
      Although it’s not what I wanted to hear, thanks for your reply. I feel Fords have been very sneaky.

  163. Hi Stuart,
    I leased a Toyota Corolla 2014 on May 2014.
    I was involved in two accidents (may 2015 & March 2016) Not At-Fault in both accidents. I was in the Hospital for injuries in both accidents.
    My car insurance denied me to renew my insurance and the only insurance available was FAJUA $13,100 per 12 months (Insurance for high risk drivers).
    I already paid 30 months on my Toyota lease. My question is May I return my Toyota Corolla 6 months before lease expire and not affect my credit card report.
    Thanks in advance for your help.

  164. Hiya Stuart, I’ve just set up a new Pcp with BMW, had the car 6 hours and all the warning lights came on. The car is now in for a service and needs a part from Germany. So I won’t have the car back till next week. I haven’t had the car in my possession for longer than 48 hours. Is there any chance I can now say I don’t want the car any more and pull out of the PCP? And terminate the contract?

    • Thanks for the reply. Yes the car has a computer fault which they are apparently fixing this week. Because of the fault to the new car, I feel I no longer want that car as it’s not the dream car I imagined having, and feel like there are going to be continuing problems. What would you suggest I do?

    • In terms of your legal rights, it doesn’t matter whether it was the dream car you imagined having, or whether you feel like there are going to be continuing problems. What matters is the fault at hand and whether it is a significant one. It may something relatively minor and easily fixable, in which case you won’t have the right to reject the car.
      The Consumer Rights Act entitles you to reject a car if it has a significant fault, which is essentially something which is not easily fixable and will keep it from functioning normally. You can probably argue that since the car has been off the road for a week and you have only had it for a few days, it should be considered significant. You will need to contact the finance company in the first instance, as the car belongs to them, not you, so they have to be involved in the rejection process.

  165. Hi Stuart,

    I have a car on finance, which ive had since July 2016. If I pay half of the settlement figure can I voluntary terminate my car?

    • Hi Jess. It’s not half of your settlement figure that you need to pay; it’s half of the Total Amount Payable – and that assumes your finance product is one which has a provision for voluntary termination.

  166. Hi Stuart, have read the above comments but doesn’t seem to be an answer to my quick question. I have followed your advice on voluntary terminating my car. The finance company hasn’t sent me out any documents to sign but I am just wondering do I sign anything the collection people give me or will this hold me to having to pay for excess milage?

    Thanks so much

    • Hi Lisa. Legally, you do not need to sign anything. There will be an inspection report, where the person assigned to collect the car will note any damage and confirm that you have handed over spare keys, owners manual, logbook, etc. If you agree with the evaluation of the vehicle’s condition, you can sign this report. However, you should take photos of any damage noted in case you want to dispute the finance company’s charges later on. You should also make sure you get a copy of the inspection report – if they don’t offer you one or don’t have a duplicate available, take a photocopy or at least photograph the report with the camera on your phone.

      The inspection report will note the mileage, but there should be nothing there where you undertake to pay for excess mileage. If there is any other paperwork where you are undertaking to pay for any repairs or penalties, you should probably refuse to sign that.

  167. Hi Stuart. I’m only just over a year into a 4 year pcp agreement, but have just been laid off & therefore unable to make the payments. How do I stand with regards to not being near 50% & VT??

    • Hi Chris. There is usually no provision in a PCP agreement for being laid off from work or illness, so you are generally expecting to keep repaying your debt.

      Your best bet is to speak to the finance company ASAP and see if they offer any options to assist – however, they may well not be interested.

  168. Hi Stuart

    Big help! I have sent the VT letter. Now they want me to sign all these forms. How do I get the finance company to hurry up and let me know the date for drop off at the auction house?

    I have already called but they want me to sign the form even though I have told them I will not as I don’t need to.

    Please can you advice? Can I tell them the 14 days notice and that I will charge storage past that date?

    • Hi Samantha. Once you have sent the VT letter, you have terminated the contract. You do not need to sign any additional forms; however you should pay attention to the inspection report when they come to collect the car, and make sure you agree with everything that is written on it. If you’re happy with everything on it, you can sign it (make sure you get a copy so nothing can be added to it afterwards).

      Finance companies will often try to force you to sign their paperwork, as it is a means for them to try and get you to agree to any fees or conditions contained within. However, you can respond (preferably in writing) that you are fully aware of your rights regarding voluntary termination and you do not have to sign any other forms.

      Yes, you can advise them that if the car is not collected within 14 days, you will start charging for storage. Good luck with actually trying to collect that money, however at least it reinforces that you know your rights.

    • Hi Stuart,

      Some feedback for everybody.

      We started the process by sending the VT by letter using the template. This was very helpful. The letter was sent recorded and tracked. The same day we called up and paid the outstanding amount. Once the letter was signed for, I emailed them to confirm that they have now received the letter and that we are awaiting their call to arrange the drop off.

      They sent us a bunch of forms back to sign (VT notification and vehicle condition). They also asked us not to stop the direct debit. After a phone call where I stated that I would not be signing anything nothing really happened. During the phone call they insisted they needed the documents back before they could proceed.

      This morning I resent my email stating I had received no reply and once again mentioning the 14 days notice. Within 10 minutes they phoned me and gave me the number to the auction house to arrange the drop off.

      I would like to point out to everybody that you should not be intimidated by their forms AND by the friendly manner they ask you to sign the form. It is a trap for sure!

      We are now going to valet the car, make it look perfect, take lots of pictures and when we drop it off we will film the process and take any pictures of any recorded damage. The car is in fantastic condition but I do not trust the finance company one bit.

      Hope this helps others!

      And Stuart, you are doing a great job here answering the same questions over and over :)

      If they cause any more problems I will let you know.

    • Hi Samantha. Glad it worked out well for you, just keep on top of the inspection process and make sure you don’t sign anything you don’t agree with – or make any corrections to their report (along with your initials). As a general rule, finance companies will back down far more quickly if they know you are aware of your rights and responsibilities.

      And of course, as you say, don’t trust them one bit!

  169. Hello Stuart

    I took out a 36 month PCP paying £222 per month with a £3200 deposit down. The total amount payable is £18,116.03 so in order to VT I would need to end up paying back £9,058.02 (as stated in the finance agreement). However, with my payments at £222 I would only end up paying a total of £8,023.68 (excluding initial deposit). With this in mind presumably I will have to see out the 36 month contract? Also, once I have paid the 36 months, presumably I can then opt to give the car back, as opposed to paying the optional payment? Although it states in the agreement this must be done 30 days prior to the agreement ending, so how would I go about doing this? It wouldnt be possible to VT before 30 days as I wouldnt clear the 50% figure during the 36months.


    • Hi Jordan. Your Total Amount Payable (and therefore your VT point) includes your deposit and the GMFV/balloon amount at the end. As your deposit was £3,200, you should hit your VT point after about 26-27 months by my very quick calculations.

      If you are seeing out the contract and giving back the car, you need to give it back 30 days before the agreement ending because otherwise the finance company will try to take the final payment (GMFV/balloon) as a direct debit, which should be about £6,800ish. If you are like most people, you don’t have that much sitting in your account and therefore it will bounce and cause you to default.

  170. Hi Stuart, we’re just over 2 years into a 4 year agreement with Renault Financial Services, with a balloon payment at the end. I presume that this means we are nowhere near 50% of the value required?

    • Hi Mark. Probably not. Your agreement should tell you exactly what the VT point is, and you should be work out what you have already paid (including your deposit). That will tell you how close you are.

      If you can afford to pay whatever is needed to get you to the 50% mark, you can hand the car back at any time.

  171. Hi Stuart,
    I have invoked my VT rights 3 days ago with Black Horse and they sent me the forms to fill in an sign. First, Im not signing them because they say I still have to pay a bit over £850 worth of GAP insurance, warranty and cosmetic insurance and I don’t agree with that. They haven’t mentioned anything about the £1600 deposit I paid. I had a good look through your page and you do mention quite few times not to sign the forms, in case we see something that is not quite right. Second, the C200 I bought is only 6 years old but it keeps breaking down every 3 months. ABS failed twice (which is not meant to fail in the lifetime of a car), couldn’t drive the car with less than half of thank of fuel, dashboard failed to show the speed I drove with… I made a complaint to BH and they took two months to fix it, in which time I had no car but still had to make the payments. Got the car back in September and now the engine management light is on, aircon makes a loud noise, has a power stirring wheel leak and a coolant leak. Real joy.. So I called them again and they say they will take 56 days to deal with it, at which point I decided I had enough and I will return the car. At my first complaint BH gave me back £1.4K for the time I did not had the car and it was in the garage. Now.. Im looking to loose about £6K and be left without a car and any refunds. I was I entitled to a refund from Black Horse? Seems a bit unfair to pay aprox £7000 just to use a car for about a year and few months (bought it in March 2015 and it has been about 5 months in the garage). The second question is.. if I don’t sign the papers, will the British Auction still accept the return of the vehicle?
    Thank you.

    • Hi Alecz. To address your questions in order:
      1) Usually GAP, warranty and cosmetic insurance are not covered on your finance agreement, so make sure you haven’t paid for those already.
      2) The £1,600 deposit you paid is not refundable, it is an upfront payment towards the car. It should count towards your VT amount, but you can’t get it back.
      3) No you are unlikely to be entitled to a refund for mechanical failures on a six-year-old car. If you have warranty cover (which you said you do), this is the avenue for pursuing costs.
      4) You don’t need to sign any of their forms to VT the vehicle. All you need to provide is written notice that you are VTing the vehicle. The auction house will know this. You should check their inspection report and, if you agree with it, sign it (and make sure you get a copy). This shows that you agree with the condition of the vehicle as inspected, so any damage that the finance company tries to charge you for that is not listed on the inspection report will not be enforceable. If you don’t agree with the inspection report, amend it (initial your amendments accordingly) and then sign. If they won’t let you amend the report, don’t sign but provide written advice (email or letter) to the finance company that you dispute the inspection report. Take photos of any damage recorded on the report, regardless of whether you agree with the assessment.

  172. Hi Stuart,
    I am waiting for collection of my Audi after VT’ing it over the telephone. I have no issues with the car other that the fact that there is no service book- there was never one with the car from brand new- rather it is all stored electronically. It has been serviced in line with the variable service plan it was on- albeit not at an Audi dealership. I have since telephoned Audi to check the car did not come with a service book, which they have indeed confirmed. Will this be ok do you think when British Car Auctions come to collect next week?

    • Hi Arch. You should get your Audi dealer to print you out a service record if you haven’t kept your servicing invoices. It shouldn’t be a problem as Audi, like most manufacturers, have moved to digital service records rather than stamps in books.

  173. Hi, I’m approaching 2 and a half years into a 4 year pcp deal(motor balloon?) and will have paid of 50% total amount in the coming months.

    I’m looking to VT the agreement after that but the contract makes no mention of if I’m able to return the car in this way- should this be clearly mentioned in the contract and if it isn’t does it mean VT is not an option.


    • Hi Matt. If your contract is a PCP (which is a type of Hire Purchase), it should have a section explaining your VT rights and what the VT amount is. If you can’t see that in your contract, contact the finance company to check but you probably don’t have a PCP.

  174. I would like to VT my PCP contract in February when i reach 50% of my contract on my car, however the two front wheels are slightly scuffed I’ve been told, to have them refurbished to new condition, it will cost me £90 per wheel (diamond cut) if i don’t get them done will the finance company charge me for any damages they find? also the two front tyres will need changing do i need to do them too?

  175. Hi Stuart, I’m currently half way through my agreement and am now needing to VT, my wife had a crash in the car a few months ago and we got the car fixed and bumper replaced and sprayed at the time, so all is fine with the car now, will we need to inform our finance company that the vehicle has sustained damage? And if so, can they refuse the VT? thanks

    • Hi David. If the repairs have been done properly, there shouldn’t be any problem. If you have had the repairs done by a body repair shop authorised by the manufacturer, there certainly shouldn’t be a problem. However, if the repaired panel is noticeably a different colour to the rest of the car, or it’s not fitted perfectly, then the finance company will probably take issue with it and try to charge you.
      There’s no definition of what is acceptable; it’s simply a matter of negotiation.

  176. Hi Stuart,

    I recently had to resign from work due to health issues, and as a result I can no longer afford to pay my monthly finance. I haven’t paid 50%, but the car has been well looked after, what are my options?

    I would like to lease a car instead as it is far cheaper and shorter term, but I’m concerned that my credit rating is going to be affected because of having to hand my car back.

    Many thanks,


  177. Hi Stuart

    I have exercised my right to voluntary termination with BMW. They have responded to my letter (taken from legal beagles link you provided) with a letter saying a “termination payment” of £2545.82 is now overdue.

    I haven’t signed anything.

    Do I need to pay this?

    Kind Regards

    • Hi David. It depends on what the “termination payment” is for. If you haven’t reached the 50% point, it may be the amount you still owe to get there. You will need to speak to the finance company to find out exactly what they are billing you for. If you haven’t handed over the car, it won’t be for damage or excess mileage. There should be no fees to terminate the agreement.

  178. Hi Stuart, I’m currently over half way of my 5 year deal with arnold clarke. I believe more than half has been payed aswell. Looking further into it i have found out i have a “fixed sum loan agreement” with Hitachi personal finance. I’m unsure where i stand with regards to handing it back, is this a possibility? Would it be possible to sell it then pay the rest off?
    Your help would be hugely appreciated.

    Regards Matt

    • Hi Matt. If you have voluntary termination rights, they will be written into the agreement. If you cant see it written there, you probably don’t have a PCP or HP. Contact Hitachi and ask them to confirm that you have paid back more than 50% and can now voluntarily terminate the agreement – they will be quick to correct you if you can’t do it.

      Yes, you can sell the car and pay off the balance owing. For more information, have a read of our article about settling your finance agreement early (it was written for PCPs, but should apply equally to you as well).

  179. Hi Stuart.
    I terminated my PCP agreement in October as I’d had a baby and the car was too small for us and my maternity pay meant I couldn’t afford the repayments anymore. Anyway this week I have received a letter saying I still owe £223.02 for MultiPart Settlement and this must be paid in 14 days. I’m not quite sure what this amount is actual for. Any ideas? Thanks again.

    • Hi Alex. You’ll need to contact the finance company to find out exactly what a ‘multipart settlement’ is. It may just be an attempt to get more money out of you.

  180. Hello Stuart,
    I called my car finance today to return my finance car. I have been driving it for last 17 months and my situation has changed now as I am leaving the UK. They said, they will send the voluntary termination pack by next week. Meanwhile, they said I may have to pay little less than 4k in order to cancel the finance early. There is no way I can pay this amount and over the phone I told them if that is the case then I will just leave the car on road and go back home as there is probably no intention for me to come back to the UK. Having said that, I also told them because I am good citizen so I dont want any trouble, so I am letting you know in advance that I am leaving and take the car back and release me. Because money wont come out from my throat even though they try to strangle me. They said by next week they will know how much exactly I may have to pay, so I will take it from there. But when they said I got to pay, now I am feeling a bit scared that will they take any legal action against me (by sending police/bailiff or even affect my credit score?). Could you please suggest. Thank you.

    • Hi Aziz. If you haven’t repaid 50% of the total amount payable, you can’t just give the car back and walk away. If you are only 17 months into your agreement, they are probably correct that you are £4K short of your VT amount.

      If you don’t pay what you owe, they are perfectly entitled to take action against you. And yes, it will affect your credit score. You deciding to leave the UK does not change your legal obligations to repay the money you have borrowed.

  181. Hi, I have recently signed a hire purchase agreement for a car. I was actually thinking of terminating this as I want to go back to my old car. Since I have only had the car for 1 month I would assume that the value of the car would not be very different from when I have purchased it. How much would I need to pay if I wanted to return the car? Would they still ask for half the total amount ?

    • Hi Denise. Unfortunately it’s not that simple. Your car will have dropped in value significantly – more so if it is a new car, but still a fair chunk if it is a used car. For more information about your car’s value, have a read of our article about depreciation.

      If you are outside the 14-day cooling-off period for your car finance, you will have to repay the full amount borrowed plus some interest and an early termination fee. This means that you will be making a significant loss on the whole thing.

      Finally, there is every chance that the dealer no longer has your old car, unless they have decided to keep it and sell it again. However they are not going to sell it back to you at the same price they bought it from you – obviously they have business expenses and they are there to make a profit.

      Have a read of our article about settling your finance early. It applies to both PCP and HP car finance.

  182. Hi stuart,

    I am wanting to voluntary end my car finance agreement with Advantage. I took the car in january 2015 & have kept up to date with my payments. It is the billing for repairs I am worried about. The car is 2006 and my contract was 4 years. Its not worth another 2 years. Id rather lease.
    It is the billing for repairs and any added costs I am worried about. It is showing signs of age and has done 100000 miles. Can you advise
    Here is a summary??

    Please read the full contents of this email carefully.

    Further to your recent enquiry regarding the voluntary termination of your above numbered agreement, please find below important information outlining the required arrangements.

    Upon termination of the above agreement you will need to pay:

    1. The outstanding arrears on your account (applicable if already paid 50% of the total amount payable) = £0
    2. At least one half of the total amount payable as stated on your Hire Purchase Agreement. This sum takes into account payments you have already paid, any deposit you paid at the start of the agreement and any arrears not shown in (1) above = £0
    3. Any outstanding collection charges = £0

    The total you will need to pay under this section is £0

    If you purchased any insurance products, other than GAP insurance, at the same time as your motor finance and they have not already expired, they will be cancelled upon termination and a pro-rata refund will be applied to your account.

    In the case of GAP insurance the policy will be cancelled upon the termination of the agreement and a pro-rata refund will be applied, which will mean that no further sums will be payable (other than arrears) in respect of the policy.

    Any other outstanding sums (e.g. payments for expired policies and/or any overdue installments) will remain payable under the terms of your insurance agreement.

    In order to settle the insurance element of your agreement and claim any rebate to which you are entitled, you need to pay the amount set out below. This will also ensure that you have no further liability under the insurance element of the contract.

    The amount required to do this is £377.28
    Less Rebate £377.28

    Total amount payable under this section £0

    Condition of Goods

    The goods must be returned in a condition commensurate with their age and mileage, both mechanically and cosmetically. Should the goods not be in this condition when returned you will be required to pay to us the amount required to return the goods to such condition. This amount will be in addition to any sums detailed above (please refer to the terms and conditions of your Hire Purchase Agreement).

    Our definition of good repair and condition is that the vehicle must:

    Require minimal refurbishment to be ready for resale
    Have a current MOT certificate or require little or no work for the issue of a new certificate
    Be free from mechanical or body damage
    Be in its original paintwork, trim and specification (as at the time of purchase)

    If you are in any doubt as to the condition of the vehicle, you may choose to obtain an independant report from an organisation such as the RAC or AA to confirm the above.

    The goods must be returned to us within 21 days of this email to complete the Voluntary Termination.

    In order to obtain details of our nearest agent to you please contact us on 01472 586360.

    Alternatively, we can arrange for the goods to be collected from your address. An upfront fee of £80.00 will be payable for this.

    We look forward to hearing from you.

    Yours sincerely,
    Advantage Finance Ltd.

    • Hi Nat. Their “definition of good repair and condition” is of no importance, as what matters is what the law says. The law is vague, so anything else is simply negotiation between you and them. To be fair, their definition sounds reasonable and doesn’t specify that the car has to be serviced.

  183. Thankyou Stuart,
    Can I also quiery??
    I require a car for my work & do around 8-9000 miles a year. I prefer diesel however I believe they are now becoming less popular. Taking into account a cars depreciation am I better of re-financing & upgrading to a newer vehicle or leasing??

    • At your annual mileage level, there won’t be any massive financial benefit to choosing a diesel car over a petrol one. So go for whichever you are happiest with. Have a read of our article about petrol vs. diesel – it’s a bit old now and needs updating, but still illustrates the differences well enough.

      Your own individual circumstances will determine which finance path is most suitable; we can only explain how they work, not make recommendations (there are strict FCA rules about offering financial advice). Look through the articles in our car finance section and you will find lots of helpful information to assist you in making the best decision for your situation.

  184. Hi Stuart,
    Please may I get your advise on my PCP with Peugeot?
    I have had my vehicle for 3 years and another 3 years prior to upgrading my car at the end of my last agreement. Whereas my first vehicle was an ex-demo. My current vehicle was purchased brand new.
    My finance company PSA are due to come and inspect the vehicle in 2 weeks time at my home & I am a little concerned that I am going to get charged a large bill, regarding them trying to charge me additional costs for their version on how the vehicle should be in, their version “Good condition”.
    My vehicle is great condition currently, with £25K on the mileage. The only negative I can see them being funny about are my alloys, as they are very badly scratch and marked. Do you think they will try and charge me for them? (Even though the rest of the vehicle doesn’t have a scratch anywhere) & will they give me the option to get the wheels refurbished myself or not?
    Also just reading through your forum… vehicle has been serviced every 12 months, but not by Peugeot. I was never under the impression it “had” to be serviced my the dealership solely. Peugeot have previously rang me each year to remind me of a service but I have always said, I’ll go elsewhere, as I know the dealerships servicing costs are much higher than a normal garage & they have never said it must be serviced by them (I know my first vehicle was never serviced with Peugeot) Could this go against me and could you advise how badly?
    PSA have said the car must be road worthy for them to take the car away (which it is) – However will PSA advise me on whether i’ll be charged before they take the car or after? They have said if they don’t take the car on the day of inspection, i’ll be charged £140.
    Any advised would be greatly appreciated.
    Thanks Lucy

    • Hi Lucy. Yes, they can charge you for damage to the wheels if it is more than a few minor scratches. If you want to avoid this, you should get them refurbished before the inspection. As for the servicing, it will depend on what your paperwork says. If your contract says that the car must be serviced by a Peugeot dealership (which it probably does), then it’s your problem. If the paperwork does not stipulate this, it’s not your problem and there’s nothing they can do. For more information, have a read of our article about servicing your car if you have a PCP.

  185. Hi Stuart, I have just spoken to Mercedes finance in relation to undertaking a voluntary termination on my current vehicle finance. I have been instructed that I am not able to do this as my hire purchase agreement is non regulated, can you please advise if this is the case?

    • Hi Ross. You will need to look at your finance contract to see what it says. If you have the right to voluntarily terminate then there will be a clause in there which explains your rights and what the exact amount is.

  186. Hi Stuart was wondering if you could help I bought a car on finance in 2014 I initially give £3.500 as deposit but due to not having the best credit the garage said that the only company would accept me was one with higher interest rates.we had a meeting in the dealership with the broker and the lad from garage and when reading the contract I relised that I was borowing only 9.000 plus my deposit which made up the cars actual value but it stated total to repay was 21.000 due to high interests I asked the dealer about this and the broker in which he said you can either after two years voluntary give car back or if you have solid payments none missed we will come to the dealership after two years and re sell you a new car give us the old one and we reduce your interst rates on new purchase as you have proven to us good payment history after the two year mark I called the garage and I had never missed a payment in which I was informed they had gone bust but a new company was now trading on their behalf and a solicitors would now collect payments which I was then informed we couldnt now refinance and had to keep paying the set payment of £388 per month I disputed this with them at the solicitors and was told it was set and thats that as the client new company no longer take calls if it is possible I wondered if you had any advice please.kind regards mikey

    • Hi Mikey. The dealer going bust shouldn’t be a problem, as once the car is sold they no longer have any interest in the vehicle. The car is owned by the finance company, so you would need to contact them rather than the dealer or the dealer’s solicitors.

  187. Hi

    I just needed some guidance, you stated it 50% owed, does this include the final balloon payment if it is a PCP set up? or is it just the amount borrowed on the monthly payment?

    Many Thanks

  188. Hi I got a car in September 2015 on hire purchase the car was priced at £17,220.00 we part exchanged our car for £3,888.00 the dealer said they were putting in a finance deposit allowance of £3,000.00 so amount financed was £10,332.00 we have paid 15 payments totalling £1,691.55 another payment of £112.77 due in a few days so can I hand the car back? their is a section in the agreement that states: Termination: your rights, you have the right to end the agreement, to do so write to the person you make your payments to. They will than be entitled to the return of the goods and to half the total amount payable under this agreement, that is £8,610.00 if you have already paid this amount plus any overdue instalments and have taken reasonable care of the goods you will not have to pay any more, but when I phoned them today the man said I had to pay half the amount that I financed so half of £10,332.00 is this right? We have never been late or missed a payment and the car is immaculate, they also said I had to fill out forms which from reading this post I wont.

    • You will need to go by what is written in your contract. The £8,610 includes any deposit (inc part-exchange), so you will need to calculate exactly what you have already paid.

      Once you give written notice that you are invoking your right to VT, you do not need to fill in any of their forms.

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