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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 here 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 termination.

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.

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 does voluntary termination work?

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.

What is the Total Amount Payable?

This is a commonly misunderstood term, but it underpins everything about how voluntary termination works.

The Total Amount Payable is the overall cost of the vehicle, plus interest and fees on what you’ve borrowed. It also takes into account any deposit or part-exchange that you put in at the start of the agreement.

On a PCP, this includes the balloon payment, which is a large lump sum that you have borrowed but do not repay until the very end of the agreement (it’s also called the guaranteed future value, or GFV, which is technically a different thing but it doesn’t matter here).

To be able to voluntarily terminate your agreement, you have to repay (or have already repaid) 50% of the Total Amount Payable. It is not 50% of the contract duration, or 50% of what you borrowed.

If you have a PCP agreement, you usually don’t reach the voluntary termination point until very late in your contract. Because of the large balloon amount, you have borrowed much more money than you are repaying with your regular monthly payments.

For a regular hire purchase (HP) agreement, you will usually reach the 50% repayment point about halfway through the agreement because your monthly payments cover the entire borrowing with no balloon payment at the end.

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 can still enact a voluntary termination of a PCP or HP if you haven’t reached this point, but the finance company will invoice you for whatever is still owed to get to the 50% point, which could be thousands of pounds.

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

What sort of damages are covered and not covered?

The point relating to damages is somewhat vague and confusingly written.

The law 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)”. However, there is no definition of what that all means, or what constitutes “normal wear and tear”.

This means that there is considerable opportunity for the finance company to try and charge you for damages, while there is also no legal guidance as to how much the finance company can charge you for damages. It’s ultimately all a negotiation.

How do I start a voluntary termination?

Theoretically, enacting a voluntary termination is as simple as writing to the finance company. In reality, it usually gets more complicated. There are a few problems you may run into, so it’s important to make sure that you have everything sorted out first.

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.

Voluntary termination may be your legal right but finance companies and car manufacturers generally dislike it, and would prefer the clause be removed from the law. They’re not exactly going to go out of their way to help you.

The finance company will quite probably lose money when you VT your finance agreement, so they 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.

Consumer legal advice forum 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. LegalBeagles also has a template letter you can send to your finance company to start your voluntary termination.

It’s also important to know that if you have defaulted on your loan (ie – missed payments), the finance company can potentially refuse to allow you to voluntarily terminate your agreement.

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).

Do I need to fill in a ‘Voluntary Termination pack’?

Voluntary termination is not voluntary surrender

There is a big difference between voluntary termination and voluntary surrender. If you don’t communicate your intentions to the finance company very clearly, it could cost you thousands.

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.

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.

Leases do not have VT 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.

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?

Stuart Masson
Stuart Massonhttps://www.thecarexpert.co.uk/
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.


  1. Hello Stuart
    My daughter (who lives with me) bought a car on PCP in October. During lockdown, she started having seizures and is now not allowed to drive for a year after they stop, but they haven’t stopped yet. She has had to give up her job and her savings are running out. I have my own car on PCP and still have 3 years left on it so I can’t give that back and use her car. Is there anything in the PCP clauses that allow you to hand the car back on medical grounds or will I end up having to pay for something that sits on my drive and goes nowhere?

  2. Hello Stuart, I wonder if you could help. I had a car financed by Black Horse and I handed it back under VT last December. I had never missed a payment and in fact had paid one payment more than I had to, so I was well over half the amount under the HP agreement. They came up with this guff about the 2nd semester and I owed them £395.00 I asked them for a breakdown of it, but never paid it and they never gave me a breakdown of the money they said I owed. I eventually received a letter to say that they will not chase this but that I was in arrears and it could be on my credit record. I have discovered they have put this on my credit report and it is showing as a default. Can I demand they take this off.

    • Evening,
      I am looking to VT my Mercedes, I have contacted Mercedes today double checking I have paid back 50% or more which I have so would not incur a shortfall charge.
      I have the vehicle contracted for 20,000 miles per year I am 33 months into the contract so am well below worrying about any excess mileage.
      I received a form from Mercedes asking me to sign and return to them, this was their VT form.
      I have read in many places that I just need to send my own letter in writing and do not need to fill in any forms from the finance company.
      Has anyone dealt with Mercedes recently, did you fill this form in or am I in my rights to just write my own letter?


    • Once you formally inform the finance company (ie – in writing) that you are exercising your right to VT the agreement, it is terminated. You are not required to fill in or sign any other paperwork, regardless of what they tell you.

  3. Hi Stuart,
    Just about to do a VT on my BMW as per instruction from the Dealer. I am very much over my mileage allowance and was prepared to pay but from reading your article it would appear that I should hold out. Can I just ask when you say that there is no provision for charging excess mileage in the law, how does that work when you have signed a ‘Finance Agreement’ and were made aware that there would be charges from excess mileage?

  4. My name is Neil Ward
    I am trying to find some advice about a pcp finance contract on my car. At the end of November, I had a stroke which left me with movement difficulties and also an onset of focal seizures (which is classed under the epilepsy umbrella). As a result of this I have had to surrender my driving licence for a year until I do not have any seizures under the medication that I am on.
    The pcp is due to run out at the end of May, and whilst in normal circumstances I would have traded my car in. I am in a position whereby I cannot drive the car at the moment and at present am paying for basically a brick on my drive way.
    When I took the car on, I was not made aware or the mileage limit of 5000 miles per year on the contract, and due to the mileage that I do for work, the mileage on the car has accrued somewhat of a penalty of £2400 according to the finance company. Along side of balance of payments and collection fee and any repairable damage, I have been told that this will amount to a total of around £4000 along with a marker that will go onto my credit file for 6 years if I surrender the car. I was advised my the finance company to sell the car to a dealer and repay the money to them that way. I have phoned a couple of car dealers and they are not buying cars at the moment due to obvious circumstances. The other alternative is according to the finance company is to refinance the balloon payment on the car
    Is there any other options available to me as this is causing a lot of undue stress and feel that I am not getting any clear help and advice from anywhere.

  5. Hi Stuart . My Ford Focus eco boost broke down . It’s got clutch and gear box problems and I have been quoted worst case £1500 to repair . I’m.currently on a PCP 2 and half years into 4 year deal . The car is 14 plate and only 40 k miles and I really dont or can afford to pay this repair or afford now the monthly payments as not working . Car has never had any issues MOT wise regarding the 3 MOTS I have put it through so car has obviously not been bad used . Where do I stand if I want to return car . The finance company have only recently been in contact asking me to fill in forms over phone and making me liable for outstanding payments and taking car away . I’ve to get back to them.on that . Any info would be greatly appreciated thanks
    Stuart .

  6. Hi Stuart I purchased a car on hp in October 2020 I picked the car up on Friday over the weekend founds lots of faults with the car on the Monday I contacted finance company and garage I purchased the car from who both refused to return the car I couldn’t drive the car for 3 months due to over fill of oil and few other faults I found finance company have sent out 3 inspections of the car to which they all come back with the faults I’ve told them about the garage has drained oil fo me to use but say car is all good and will not allow me to return car it has a diesel leak so I’ve had to stop using car again what course of action do you advise please
    Many thanks Paul wisbey

  7. Hi There,
    Im looking for some advice. We wish to do a VT on our car agreement which is listed as a conditional sale. Is this the same as a PCP? We have paid over the 50% now but no longer require the car as we have moved to Europe so need a Left hand drive. I have the letter ready to send but Im concerned about getting the car back. Can we advise them we will take to the garage we purchased from? The car is obviously fully insured so I was thinking of driving it back straight to the garage and then heading back. Once handed over I would then cancel insurance etc. Im even thinking I should get back to Uk first before notifying them? Thanks for any advice

  8. Hi stuart
    I have a kia on pcp have been paying now for 1yr 6months unfortunately circumstances have changed dramatically and need to terminate my finance as will no longer be able to afford anymore. What steps do I need to take and have I got anything that will have to be paid.
    Thanks phil

    • Hi Phil. Your contract is unlikely to have any provisions for financial hardship that would allow you to terminate your agreement – other than voluntary termination, which is your legal right but means you still have to repay 50% of the total amount payable.

      Speak to your finance company and see if they can offer you a restructured payment plan. They are obliged to make attempts to treat you fairly, but it’s unlikely that you’ll be able to simply give the car back and walk away.

  9. Hi Stuart,

    Last week I sent an email to Santander Finance asking to voluntary terminate my PCP. I have paid over half and no monies owed. Anyway my circumstances have now changed and I wish to keep the car and cancel the voluntary termination. I have spoken to Santander and they have said its too late as the paperwork has now gone to Crystal Collections and I need to give the car back! Surely I am able to change my mind and now keep the car and keep making payments. Anybody ever cancelled a voluntary termination?

    • Hi, was just wondering how you went on with this? We are in same position with Blue motor finance. They say the VT is not reversible. Due to be collected tomorrow by Crystal Collections

  10. Hello, Really need advice. Have a vauxhall insignia and just last week got a dreaded low oil pressure error on the dashboard. immediately got it towed to a garage of which several have said needs engine swap or scrap car. i have only10 months left on finance, which been paying for over 4 years so way past 50% paid. i cannot afford the repair as its £3000 and car is not worth that at all. i am thinking of VT and letting them collect the car. am i right in thinking that because the car still runs and drives and the warning only just comes on after 5 minutes(engine warm) i can send them my email or letter for VT and let them colelct the car which is in good confdition all around apart from that error that comes on that i wont have to pay any extra charges by them? i just dont know whether to VT and keep fingers crossed no bill is sent to me forthe eninge replacement. or keep the car and keep paying the £200 per month till april which is £1800 which is stupid just incase they send me a bill thats more than that price? please help. many thanks for your time

  11. Hi Stuart, I’ve just seen this post, I have a Mercedes car on PCP for 4 years and I have just paid to the 3 year point. In May ’21 I will have paid 50% of the PCP so could return under voluntary termination. My question is that I have been paying for 20,000 miles a year on PCP but in 2 years have only driven 24,000 miles. Should I reduce my contract to a lower milage (can only do once) so I equal the amount I should have paid? as surely if I carry on at this rate and voluntary terminate I will be heavily out of pocket for the miles I’ve paid for and haven’t used?

  12. Hi guys

    I have just notified finance company I wish to VT car. They say due to covid, there is a backlog and may not be picked up for up to 5 weeks. Also to keep insurance until such time

    What are my rights?

    I have a new car so wish to end old insurance asap. Old car will be kept in private drive.

    Do I need to keep insured?!


  13. Very helpful article.
    I’m looking to VT a vehicle which i’ve made 44 out of 47 payments so nearing the end (and was going to hand back anyway).
    I also recently opted in for the 3 months payment break launched by the government. When i spoke to the finance company they mentioned if i VT i will have to owe those 3 payments as they are an arrears. Is this right? Surely as i’ve contributed more than 50% i don’t have to make these payments?

  14. I have a car taken out on finance, I’m coming up to the balloon payment but the car has suffered engine failure due to a design fault. It has regular service history from a main dealer and has had no other issues until this which is above normal wear and tear

  15. I have a Skoda Fabia on a PCP with Volkswagen Financial services. I’m 38 months into a 41 month contract. Im considering a VT. At the time of purchase, there was a special offer of a £2000 manufacturers deposit contribution.
    On checking my finance agreement, it says that the Total Amount Payable includes the manufacturers deposit contribution. I understood from your explanation of VT that the Total Amount Payable consists of amount of credit plus interest and other payable fees.
    Can they legally include the manufacturers deposit contribution in the Total amount payable?

    • Hi Mick. Yes, the deposit contribution counts towards your total amount payable and therefore your VT amount, which works in your favour compared to a £2,000 discount of the price of the car. Here’s a quick explanation:

      If your car was £10K and you got a £2K discount, that would make the total £8K. Ignoring deposit and interest for the purpose of this example, if you borrowed £8K then your VT amount would be £4K. You have no deposit so you need to reach £4K in payments.

      If the car was £10K and you got a £2K deposit contribution, you’re borrowing £10K and so (again, ignore deposit and interest) your VT amount would be £5K. But they’ve given you £2K already, so you only need to pay another £3K to reach your VT point.

  16. Hi, I have a question i can’t find the answer to anywhere so if this has been asked I apologise…. if I VT on my contract am I still subject to its obligations if I do not use the vehicle and even declare it sorn? The finance company are refusing to collect the vehicle due to the current climate but saying that I am still liable for any damage that occurs to it even after the end of the agreed finance date. I don’t want to be liable for a vehicle that I should no longer have and am only in possession of because of a failure on their side, therefore will VTing my contract mean if they refuse to collect the vehicle it’s their problem not mine…. I mean I can’t see how their refusal to collect or even inspect the vehicle can lead to additional exposure to risk on my side…. any help would be greatly appreciated. Cheers

    • If you have voluntarily terminated the finance agreement, it is now up to the finance company to insure the car until they can collect it. You are not allowed to use the vehicle (unless they ask you to move it and it’s convenient for you to do so).

  17. Hi I need to hand my car back as I now can’t afford it,bad business and Coronavirus!Ive got it on 49 months pcp and only had it 12 months,I owe £13795 on it for early termination but it’s not worth that.Im going into an Iva and they have instructed me to hand it back and take the hit on the depreciation and put that debt into my plan.Whats the worse case scenario and how do I do it.Thanks

  18. If I VT my car do I need to get the dealer to print off the service certificates & do I deal the V5 like any private sale?

  19. Hi – I have a Hire Purchase agreement with Clydesdale Asset Finance. I took this out on a RR sport Feb 2017 for a total price of £88, 080.80 (including interest etc.). This is over a 48 month term. I have recently written to them asking to exercise my right to VT the contract (just over 2.5 years into the term). I noticed before writing that the VT figure being £44040.40 was less than the final payment amount being: £44805.85. Given this I stressed I thought the contact was badly structured and didn’t provide me with the option to exercise my right.

    They formally wrote back saying I had requested a monthly premium of roughly £700 hence the structure, plus the paperwork made me aware. They also confirmed I could still exercise my right by paying the delta being: £12059.05 + I could have made overpayments at any point. Therefore they didn’t uphold my complaint.

    In the process of discussing with the FO and CA, but the FO process will take circa 9 months given workload!

    Interested to hear if you think I have any case to push. Welcome your thoughts?

  20. Hi there

    I VT’d my Mercedes with 3 months to go (well over the 50% threshold for PCP). I had just completed the 45,000 miles that I signed up for as they collected the car (3 months early). They are now trying to charge me excess mileage on a pro-rata basis for the 3 months I didn’t have the car.

    Do I have to pay this?

  21. hi stuart, I took put a pcp 4 years ago and have come to the end of the agreement with all monthly payments made. one of the options at the end of the agreement was to simply return the car. the finance company are reluctant to accept it back . borderline blackmail that it will impact my credit file and they will refuse to lend me finance in the future. now they are saying they will leave a mark on my file as a VT. is this a VT ? I am simply returning the car as I simply cannot afford the balloon payment at the end of the agreement which has ended this month. please advise

  22. Hi Stuart
    I am getting an ipace BEV shortly and looking at funding the dealership says I can fund it through a PCP with my company not personally and reclaim all capital allowances as it shows that the company have intent to buy the car, Is this correct?

  23. Hi I have completed a voluntary termination on my vehicle back in August and have received a wear and tear charge of £1800 I have not paid or offered anything as I have been disputing it.today I have rang them to query something again to be told the vehicle was sold in September am I still liable for repair costs even tho they no longer hold the vehicle??

  24. I wrote to toyota in order to start the VT process. They sent out BCA to inspect the vehicle and take it away. After the man inspected the car, he input the scratches and dents (very tiny ones, I might add!) and Toyota priced the repairs at £600! It’s was about £140 to remove 1 dent. I decided to just keep the car until the end of the contract. I’m astounded they are allowed to charge that much. They are clearly taking advantage of people in unfortunate positions. I don’t have that money lying around, nor would I want to spend that money on a few scratches and dents. Even the man who inspected the car said Audi would have charged £200 max. I feel like I should be reporting them for this!

  25. Hi. I have paid over half my finance agreement on my car with Peugeot. They are saying if I end early it’ll put a black mark against my credit rating? Is this true?
    Also with regards to mileage, my agreement was 48months at 10,000 miles per year. I have 10months left and have done 35,000 miles so far. Will i be charged for this if I end the agreement 10months early?

  26. Great article Stuart. Just wondered if you could confirm my thinking on my current situation. I have 2 monthly payments left on my PCP agreement. The GMFV is 15,376. The indicative trade in is 12,500, so almost 3k of negative equity. This is in large part to exceeding the “agreed” mileage by 17k miles (change of circumstances). The excess mileage charge will be approx 1,200 plus alloy damage likely to bump it closer to 1,350. I’ve decided that handing the car back is the lesser of two evils. Today however the finance company suggested I use a VT to cancel the final two payments and effectively use those to subsidise the excess mileage charge. I was sceptical of the impact on my credit record, but your article has assuaged this concern. This seems like a case of turkeys voting for Christmas on the part of the finance co! Is it too good to be true???

    • Hi Steven. If you VT the agreement, you don’t have to pay the excess mileage charge so there’s nothing to “subsidise”. The finance company is unlikely to be offering advice that works out badly for them, so they’re presumably expecting you to meekly pay the £1,200 in excess mileage, plus they’ll likely sell it at auction for more than the trade-in value.

  27. Hi,
    I have been looking into early settlement of car finance agreement 24 months into 48 months contract. When I found paperwork the title on it was Hire purchase agreement. However on their system it is put as pcp. When questioned they said that all agreements are hire purchase and some of those are pcp. Should i be digging into this because it changes the circumstances significantly around VT. thanks. Steve

    • Hi Steve. A PCP is a form of hire purchase, so it’s perfectly normal (albeit confusing) for your contract to say hire purchase. It doesn’t change your VT rights at all, and you still have the right to pay 50% and VT the vehicle. The only difference is that it takes much longer to pay off 50% on a PCP than on a traditional HP.

  28. Hi Stuart,

    Thank you for this super helpful article! I’ve had a read of it as well as the comments and the info on LegalBeagles and just have one question.

    I’m looking to VT my PCP and have reached the 50% TAP. My question is about ‘damages’ and the options available.

    My car has some very minor marks on the back as well and the front two alloys being scuffed.

    My question is… when the car is inspected, if these are picked up on and I am invoices for them, do I have the option to then go and get the repairs done myself? Based on the cap hpi vehicle condition standards, and the age of my car, these should fall under the Clean category, but if I am charged I imagine it would be more than if I were to go and get it done myself. On the other hand, I don’t want to pay for repairs if I wouldn’t be charged for them anyway!

    Any suggestions or advice would be much appreciated.

    Thanks in advance!

    • Hi Lucy. You either need to get the repairs done prior to handing the car back or the finance company will charge whatever they think is appropriate. Once you hand the car over, there’s no getting it back to do your own repairs.

      The finance company won’t go by the HPI standards. They will use their own discretion to decide whether any damage is beyond normal wear and tear, which means you will have to argue with them if you dispute their opinion.

  29. Hello, I can hand my Audi back now as I’ve paid over half of the finance but I’m around 8000 miles over my allowance and my alloy wheels are pretty badly scuffed.
    Audi have told me they will charge me 7.2p per mile and for the alloys but someone has told me if I don’t sign the collection paperwork when they collect I won’t have to pay? Also I know your article says that excess mileage does not have to be paid but I’ve also been told that this doesn’t apply to Audi now, is this true? Thank you.

  30. Hi Stuart,

    Probably you can help, I gave a notice of termination of my HP on 27th of June. My next monthly instalment is on 1st of July. The finance company said that I must notify them in writing 7 working days before my next contractual instalment is due, or that instalment will be payable as usual. Its not written any were in the agreement, although that information is included in the Voluntary termination pack they send me to sign. I am not planning to sign any of their documents, but is it correct that I have to pay my next instalment. As far as I understand I don’t have to pay nothing more after notice has been given.

    Thank you,

  31. Hi Stuart,

    Many thanks for all your great bits of advice.

    I like to use the VT and only have 3 months left on my finance. I called the finance company and asked for my settlement figure for a VT. They said I have to pay around £3k to get to %50 of the total loan. They include the balloon payment left and claim that it is part of my total borrowing. It that is the case, I have no right to use the VT to terminate my finance.
    I borrowed around £60k, paid a deposit of £15k for a car that valued at £75k. I paid around £27k and the finance asked me to pay the extra £3k so I use my right for VT but my 3 months pay plan only has around £2k left to pay.
    Any idea what can I do to terminate my contract earlier?

    • Hi Dror. Yes, the balloon is part of your overall borrowing, but you don’t repay it until the end of the agreement. You can probably pay up the remaining £2K worth of monthly payments so that all you have left is the balloon, which sounds like it will be about £1,000 less than a VT. The finance company may then let you hand the car back immediately rather than waiting another three months.

  32. Hi thanks for the reply.
    I’ve been on legalbeagles and asked a question that when I exercise my right to VT and they play the long game.ppl have been advised to stop there DD payments.with that in mind and as I have a guarantor would you advise the same.as the answer I got potentially no .I really need a legal answer that’s all.plus ot was said the guarantor on my terms and conditions should state where the guarantor is removed from any further payments at a certain time is this also true as I cant see it on my T and C

  33. I have a Mercedes on PCP, however I moving to Guernsey and they have informed me I cannot take it with me. They say I have to buy it or 2 other options which I cannot afford. what can I do

    • Hi Adele. It’s quite common that finance agreements for England/Scotland/Wales are not valid for the Channel Islands, so you’ll have to pick the least-worst option.

  34. Hi Stuart I have had an Audi A4 for just over 14 month I got it on a 4 year pcp deal what will the penalty be for returning it early as my job has changed and I can no longer afford the car is the best way forward for me to contact Audi and tell them I am voluntary terminating the agreement thanks for any help and advice you give

  35. Hi Stuart,
    I VT’d a car bar back in January 2018 and disputed the excess mileage charges, I since have heard nothing so assumed the account closed. However I have recently checked my credit report and noticed that they have been applying late payment charges to my account for the last 12 months.
    Where do I legally stand with this? If the damage is already done I may as well take it all the way surely?

  36. Hello Stuart,
    I have got a car through finance last year, but I am not driving it because I only have a provisional licence. My partner used to drive it, but now that we are no longer together I would like to give it back due to my financial situation. What would you advice me, please?

  37. Hi Stuart. I have a HP since Jan 2018 for a brand new car. My mileage are very low and I don’t have any damages. I want to do VT because my personal circumstances have changed and I need to leave the country in six months. I have always paid my instalments. What are my options in this situation?

    • As you have the car on HP in some respect its yours to do with what you will however, as its only 12 months old you may take a hit on its value. If thats something you are willing to do then sell it privately or to one of the car buying companies.

      You could also try and sell it back to you dealer

  38. Hi Stuart,

    I recently hit bad times, due to wife’s illness and meaning the part time work I did I no longer can do as I will be the carer of my wife. However we do have a contract Hire Lease deal which was 48 Months and we have many of these over the last 20 years. I am around 22 months into this but can no longer make the payments and have spoken about this to WW Finance/Audi. I fell behind on 2 payments due to major distractions and currently I am only a payment behind, however as I ignored letters ( Yes my fault) it defaulted, I contacted the dealership and explained and they passed my details to finance company who were supposed to come back to me. They did not and I have Repudiated my agreement. i have said I am waiting for the collection agency to agree a collection to pick up the car. However where does that leave me? The outstanding rental agreement they say is still 26-28 Months left I believe. I am not in a position to pay off all of that in one go and subsequently each month I cannot afford those payments unless it was a reduced payment plan. Any advice is appreciated.

    • as far as I know if you’ve entered a lease agreement you are responsible for paying the remainder of the rentals. PCP and PCH are 2 different things.

    • Hi John. You can negotiate a payment schedule with the finance company, but unfortunately you are negotiating from a weak position as you have already defaulted on the contract.

      Don’t bother trying to speak to the dealership as they no longer have any involvement in the agreement – it’s simply between you and the finance company. It’s entirely possible that the dealer never actually “spoke to them” about it at all, which may be why the finance company never contacted you.

  39. Hi Stuart,

    I too am in a similar position. The finance company are wanting to charge £50 per ding and have already agreed that half of them were “reasonable” so are removing that half. However, there is still £100 they are trying to claw back, one scratch did go down to the metal but I don’t know how this occurred.

    They are also after £500 for excess mileage.

    Do I dig my heals in and fight it all as you suggest above or is there anything I need to be wary of?

    • Hi Chris. Basically, everything is negotiable and it ultimately comes down to who’s prepared to fight harder. The finance company will issue a bill for whatever damage you can spot, and it’s up to you to argue your case to get this reduced or waived entirely.

  40. Hi Stuart, really useful article thank you.

    I am currently in a pcp agreement with Mini Finance. Due to a change in job I increased the annual mileage allocation about 6 months in to agreement itself. When I have since asked for a VT date they have told me that the payments I made up until the mileage change do not apply! Is this right? And if so why?

    My understanding would be that I have paid the company 6 months worth of payments on the total balance and that when increasing my mileage I wasn’t changing the contract or its length of term.

    Thanks in advance

    • Hi Lisa. You can argue the matter with the finance company, but if the service is due before you VT the car then the finance company will expect you to have it serviced.

  41. I am going through this VT with a HP on a car that after a period of time was no longer suitable for me due to disability, so took out a new agreement on a different car, before doing the VT (big mistake)

    Is there any guidelines as to what they can charge for any damage beyond reasonable wear and tear? Just at the moment I am looking at..
    £175 for incomplete service history.
    £55 for each alloy with a scuff bigger than a certain size (pretty sure all have so that’s £220!)
    I am now almost in an impossible place of having a new PCP and the old car charges and trying to afford both!

    The question I wanted to ask, can the company force me to pay for all charges at once, or do I have the right to say I cannot pay that all at once and offer instalments? Or is that going to create a whole new headache?

    • Hi Michael. Most finance companies will go by the BVRLA (British Vehicle Rental and Leasing Association) guidelines for charges, unless they have provided you with any other written advice.

      You can negotiate any payment terms you like with the finance company, but they are not especially inclined to be helpful and you don’t really have any right to make demands on how you will pay them. All they are required to do is treat you fairly, but since you have taken out another finance agreement on another car, you will struggle to argue a case for financial hardship.

  42. Hi Stuart,
    My PCP contract comes to an end on the 28th January 2019. I wanted to trade my car in, but was told by the car sales man that the best thing for me to do was VT the contact, which I am trying to do. Finance is with Barclays, and I have to pay a collection fee of £150, extra mileage and a completion fee of around £300!! – which no one ever explained to me!
    I really don’t know what to do now…… all seems a right mess!

  43. Hello,

    I am looking into a VT and after reviewing the comments I don’t know what the best action is to take. I have small chips on my car and where my paintwork is white you can see the black marks very easily but there small. I am looking to drive it to the auction and I will take photos etc of the car once deleivered. I am debating whether to give the car back like it or pay for the chips to be done. However Where it’s Barclays finance I’m with I have heard they try and bill you for everything, so I don’t know whether to leave it or not. I have read some good things about how to go ahead with the VT but can anyone give advice about the best way to go about the VT. As I don’t want to be one of the previous experiences someone else has had where that have had a bill for £1000 and been passed to Bayliffs after a couple a months of giving the car back and not hearing anything . I will drive it to the auction to save money aswell but looking for some knowledge before I make the call about VT. Thanks

    • Hi Ben. We can’t advise you on what you should do, only provide you with general information about how the process works and what you should be aware of. It’s then up to you to make an informed decision about how to proceed.

  44. hi, im just coming up to the halfway point with my finance (close brothers) and i am confused on where i stand on handing it back,

    i got the finance in december 2016 tax free due to being in the army over seas, i had spoke to the company about handing it back previousy and i was told, to make it tax free it had to be under a personal loan and not a car loan so i cant hand it back however i got sent a letter a few months back where it said i could hand the car back, i rang to make sure and was told it was a missprint and that i am still unable to hand the car back.

    my confussion lays with the fact im getting paperwork saying one thing but being told another and they havent corrected it yet, im also struggling to keep up with the repayments due to not being on the same money. where do i stand?

    • Hi Dylan. You’ll need to refer to your contract rather than any other letters you may have received. If it’s a personal loan, you won’t have voluntary termination rights but you will be legally allowed to sell the car to help pay off your finance (since the finance is not connected to the car).

      If your finance agreement does have a VT provision, it will be clearly stated in your contract along with the exact repayment amount required to be able to VT the car.

  45. Hi Stuart.

    I VT’d my car in Sep-18 and had several emails up to Nov-18 stating about paying excess mileage, collection fees and damages (total of just over £1900). I replied every time quoting the CCA and that I don’t need to pay them and will be sticking to my guns. They have removed the damages (£50) and reduced the collection fee by 50% reducing the excess mileage to just over £1600.

    I never heard anything until last week with several emails which stated the following statements:

    “In the case of a Voluntary Termination (VT), the charges for excess mileage are not charged based on the law governing the VT rights or the finance agreement itself, but under the Common Law of Misrepresentation. Whilst the finance agreement determines what the mileage should be at any point in the term, the Common Law of Misrepresentation allows the business to recover the loss associated with additional depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract; including if they utilise the option to terminate early.”

    “Please note under the amended terms of the finance agreement with effect from June 2018 we can charge for excess mileage at any stage through out the term of the agreement and it is not limited to the termination stage. As such we are able to charge our customers for the impact the excess mileage has on the sale of the vehicle.”

    Can they change terms of the agreement without my knowledge? I told them that I had no notification of this?

    “Having reviewed the expected auction price (CAP) figures and the impact the excess mileage had on the sale of the vehicle was less than the loss suffered.”

    At this stage they reduced the total charge again to £1175.

    “As you remain unwilling to pay towards the excess mileage and collection fee I will pass on your details to our collections team to pursue the outstanding debt.”

    “Further to my email from 15th January 2018 the excess mileage is reduced to £300.00 and not £1175.00 my apologies for the human error; leaving the outstanding balance of £370.00.”

    How can the excess mileage go from a total of £1900 down to £370? Is this scare tactics to ensure they get something from me?

    Thank you in advance for any advice.

    • Hi Mally. It shows that they are really just trying it on. However, depending on how many miles you are over and whether you were aware of your mileage allowance, you should probably consider whether it’s worth paying up or continuing to argue.

    • Hi Stuart, I am 2 years into a 4 year contract hire agreement. Since I got the car (it was brand new) I have had ongoing problems with it. I drove it out of the showroom on the day I purchased it and had to return it 3 hours later as a warning light came on. I did not have it for 3 weeks last year as they had to investigate another issue. At this particular time they replaced the entire engine. I have many dealings with the car company since and in fact as I write this it is in having the start/stop issue corrected and a problem with the radio corrected. This is a high end luxury car and I have never experienced a car with so many issues. What rights would I have to terminate the agreement in this case? I have no problems paying the monthly fee but I don’t feel I should be paying such a high premium for a car that has caused issues from day 1. Thanks

    • Hi Suz. If you are on a contract hire agreement then you don’t have any voluntary termination rights.

      You are protected by the Consumer Rights Act, but as you have now had the car for two years it is difficult to use that as a means of cancelling your contract (it tends to work in your favour for the first six months, and then against you after that).

  46. Hi Stuart, I am trying to help my daughter VT her PCP with VW which finishes in September (4 years), at the time of sale the Sales person put her on a low mileage, knowing it would be more than what she would be covering. Could you clarify the following points for me
    1. Is it true the finance company cannot charge for excess mileage (although they will try)
    2. Normally how long does it take after letter has been recieved

    • We don’t have anything to add to our explanation on excess mileage outlined in the article above.

      Assuming there is nothing owed by your daughter to the finance company, it is usually all wrapped up in about a month, depending on how quickly the finance company can get the car collected.

  47. Hi, I’m in the process of VT’ing my BMW – I’ve been told I must sign and return the ‘Voluntary Termination Pack’ otherwise my request to VT the vehicle cannot be processed – I’ve also been told I should not (and am not obliged to) sign anything.

    What is the truth?

    • Hi John. From a legal perspective, once you formally write to the finance company to invoke your right to voluntarily terminate the contract, the contract is ended. The finance company has the right to bill you for any monies still owed, but the end date is the date that the finance company receives your letter.

      You are not obliged to sign any documentation that the finance company sends out, and they can’t deny your legal right to VT the car if you don’t sign their paperwork.

  48. HI Stuart. Good evening and thanks for your time.
    I have a doubt . I have seen somewhere in one of your comment that HP
    Contract does not include any mileage restriction .
    It is that correct?
    Because I have a HP contract and it has a mileage limit on it.
    Forgive me please if that is a silly question is just that I am worried in regards of this situation that I have got into.
    When I first got the car I did specify that I needed for work as a cab driver, so they asked me how many miles I was planning to do a year.
    I did answer that I didn’ t know because I never worked as a taxi driver before, so they assumed 18.500 miles a years . I did go just beyond that, you can immagine , how could I have said to the passenger excuse me are you going far o ia a short trip , becauae if you going far I can’ t take you . I had to keep going to feed the family.
    I am on my third year repayments of a 4 year plan with a final ballon payment of 5000 pound. I am not even working anymore as a cab driver and the car is just sitting at home , because I am worried about the mileage limit.
    I really would like to give it back because I can’t afford it anymore.
    I would like to know if I can hand it over to them and what the collaterals might be.

    Beat regards.

    • Hi Corrado. If you have a balloon payment, you may well have a PCP (which is a type of hire purchase and will say “hire purchase” on the contract) rather than a traditional hire purchase.

  49. Hi Stuart. Hoping you can help me?
    I am 21 Months into my 36 PCP contract but apparently not yet at the 50% mark and owe £1162.00 to terminate now.

    Since having the 5 Year old car I have had problems with its auto “duallogic” transmission system.
    I have serviced and MOT the car as I am required to do so and I have also used FIAT main dealer to carry out these services.

    My car is currently dead, the 40k miles (nearly 5 years old) entire transmission system has gone on it and no mechanic will touch my car except Fiat themselves @ a staggering £2500 quotation.
    Fair to say I am extremely upset but was wondering if There is any legal obligation for the PCP company on this faulty car? I dare not ask them myself and appreciate any help prior to calling them?
    Best Regards

    • Hi Francesca. It’s your car with the finance company having a registered interest in the vehicle if you try to sell it, much like a mortgage on a house. So – much like a house with a mortgage – you’re responsible for paying for any servicing or repairs.

      If the car is dead, you won’t be able to VT it. Well, you can, but the finance company will bill you for the cost of fixing it and their charge is likely to be higher than whatever quote you’ve got.

    • Hi Mark. If you are exercising your legal right to VT a hire purchase agreement and have reached your 50% point, there should be nothing further to pay unless there is damage to the vehicle or you’ve failed to service it properly.

      If you do still owe money for any of the reasons above, the finance company is likely to chase you first and only go to your guarantor if they can’t get money out of you.

  50. Hi Stuart,
    Great website, thank you. Having read many of the comments and threads on this article, i feel our situation is quite unique and I can’t understand it. Please could you help me out as I am at my wit’s end.
    Here is what my husband received in the post having instigated a VT on his car (right at the very tail end of his agreement so he had almost paid it all back but we had significant change to our circumstances)….

    ‘on 15th September 2018, your final balloon payment of £3945.16 was due. As you had recorded your intention to part exchange the vehicle, we did not apply to take this payment from your account.
    On 21st September, you telephoned us to discuss your options regarding the end of your PCP agreement. You informed us that the dealership were not going through with the part exchange, and the advisor confirmed you still had the option to hand the vehicle back.
    On 22nd October, you telephoned our arrears management department following receipt of correspondence and you were advised that you were in arrears by £3945.21. he explained that if you VT the agreement, you would be liable for the outstanding arrears.

    As you were overdue a payment of £3945.16, this became your outstanding liability. This is stated in your ‘Conditional Sale agreement Regulated by the Consumer Credit Act 1974’ under the section ‘Termination: Your rights’.

    On a PCP agreement, you are given the option to hand back the vehicle without being charged this balloon payment. However on your agreement you have signed to confirm you acknowledge and accept our rate of £14.9p per mile we charge if you exceed your yearly mileage. From Manheim’s report we can see that you have massively exceeded this allowance, which we have calculated would have provided you with a liability of roughly £6450 had you handed the vehicle back at the end of agreement as a PCP handback’.

    After a full review, I am unable to uphold your complaint. The reason for this is that the VT liability is a valid payment you remain liable for, as is the £70 collection fee as both of these are stated in your contract.’

    At this point my husband has returned the car and paid the collection fee. But it sounds to me like they are still insisting that he pays the balloon payment plus charges, despite giving back the car.
    I’d understand their argument if they simply said it’s over on mileage and here is a charge, but why on earth would he have to pay the balloon payment (which they later refer to as an arrears) AND give the car back?
    Their letters are very threatening and it’s causing a lot of stress and upset. Feeling totally helpless.

    • Hi JB. Once you fall behind in your payments, the finance company is not necessarily obliged to honour your VT. It looks like that’s what has happened here, because you tried to VT the car right in the final days of the agreement and therefore your final balloon payment became due.

      If the finance company is saying that your excess mileage liability is £6,450 then (based on 14.9 pence/mile) you have exceeded your mileage allowance by more than 43,000 miles. It’s no wonder they’re annoyed, as this will massively affect the car’s value.

      In addition to your overdue payment, I assume that they will try to bill you for the excess mileage of £6,450 and you’re likely to have to fight them over it. Because you have officially terminated the contract and returned the car, you probably can’t even unwind it and take the car back again. I’d suggest you call a lawyer to help you.

  51. Hello Stuart, great forum. I am in the process of voluntary termination for my DS3. The company were notified 3 weeks ago about the termination , money due was paid up, evidence of relevant paperwork produced but unfortunately the car is still outside my house. I am not using the car as a new one has been purchased. Who is legally responsible for the insurance on the car? The company are saying they do not have any experts to come and inspect the car and the earliest would be in another week’s time.

    • Hi Paula. As long as the car is in your possession and the V5 is in your name, you need to keep insuring the car. You can threaten the finance company with charges to keep storing the car to cover your costs, but your chances of getting them to ever pay it would be slightly less than zero.

  52. Hi,

    I am coming up to my 3rd year of a 4 year PCP contract. I have contacted the FCA finance company & would like to go ahead with voluntary termination of the car. My only worry is, I have agreed to 6000 Miles per year but I have done more than this. I brought the car with just over 14,000 miles & I am currently on 36,000 miles. 4000 miles over & the cost in the agreement is 9p per mile. This means I would owe thousands just for excess mileage. Do you think if I trigger the VT they will charge for the excess mileage?

    Many Thanks

  53. Hi Stuart,

    My situation is a bit complicated and I think I wouldn’t be able to do a VT, but I was wandering can someone take over my existing finance without it being terminated?

    Thank you for your advice.

    • Hi Karina. As a rule, no. It’s your contract and the finance company won’t let you assign it to someone else. You can certainly call the finance company and discuss your options, but it’s your debt and your contract.

  54. Hi Stuart,
    Thanks so much for this helpful article. I’m 22 months in of a 38 month contract and my current statement’s closing balance is £14245.90. I recently got a settlement figure of £13500.51 or if I choose VT then I need to pay £2667.39 plus excess mileage (not that I’ll be paying that, thanks to your article!). I’m thinking about going down the lease route with maintenance to remove any worries about repairs etc. Am I doing the right thing VT ing, especially given the amount I need to pay to do this? My monthly payments are £359.56 for a basic Golf, and I think I could get more for my money on a lease – any reassurance/advice would be greatly appreciated!

    • Hi Sandra. We can’t advise whether you should take one course of action or another. All we can do is explain how these types of finance work so that you can make an informed decision about what the best path is for you and your specific financial circumstances.

  55. Fantastic article, with lots of great advice. Thanks for taking the time to post it, and to keep up to date with all of the comments. I am VT’ing my BMW this week, and it has taken a load off my mind.

  56. Hi. I have taken my case to the Financial Ombudsman and their response is below and gives the background. I have no issue regarding un-mileage but feel the tyre damage (to the rubbing strip) shouldn’t be payable when their own dealership said it was fine and I had tyre insurance. They are quoting the BVLRA, however the consumer credit act states reasonable. Any advice how to respond in my appeal and what I do with Audi invoice.

    Ombudsman response:

    I’ve now looked at all the information that you and the business have given me. Based on what I’ve seen, I think the business have dealt with your complaint fairly – so I’m not asking them to do anything.

    I know this isn’t the answer you were hoping for. But I’ve explained below why I think this is the right outcome – taking into account everything that’s happened.

    your complaint

    To summarise the complaint, you took out a hire purchase agreement for an Audi A5. At the same time you paid for three year alloy wheel and tyre protection. The agreement was voluntarily terminated. An inspection was carried out and as a result the business has charged £224.75 for tyre (LHR) cut.

    Three months prior to the termination you’ve said you were told by Audi Liverpool the tyre repair was not necessary, as they tyre was legal and it was a cosmetic issue only. You’ve said that had a new tyre been required you would have used the tyre protection to cover the cost of the repair. You feel the business has not looked at your complaint properly and credit has not been given for the vehicle being under mileage.

    The outcome you want is for the business to waive the charge. This is because for a three year old car you feel it is reasonable to expect wear and you consider your responsibility under the credit agreement is to return the car in reasonable condition.

    The business have given a final response stating the damage is not acceptable following the fair wear and tear guidelines and they are unable to remove the charge.

    my findings

    The hire purchase agreement was taken out on 23 March 2015. You acquired a new Audi A5. The finance was provided by Volkswagen Financial Services (UK) Limited trading as Audi Finance. You also purchased alloy wheel and tyre protection on 26 March 2015. The cover was for three years. This allowed a claim up to £300 per tyre and £250 per alloy.

    On 25 January 2018 you took the car in for a service. The tyre was damaged however Audi Liverpool stated it was not necessary to be repaired and no action was taken.

    The hire purchase agreement was terminated on 18 April 2018 and it was arranged for the car to be collected and inspected by British Car Auctions (BCA). Following their inspection on 25 May 2018 their report concluded the left rear tyre was cut and required replacing at a cost of £224.75.

    For me to provide my opinion, I have considered the industry standards as to what is reasonable fair wear and tear. The industry standards used by both the business and this service are the guidelines set by the British Vehicle Rental and Leasing Association.

    Within the tyres and wheels section it is stated ‘There must be no damage to sidewall or tread’. I am satisfied there is damage to the side wall of the tyre and therefore accept this is not within what could be considered fair wear and tear.

    I’ve also looked at the credit agreement. On page 2, Section 3 – Care and Use of the Vehicle; point 3.2 states ‘You will be responsible for any damage to or deterioration of the Vehicle which is in excess of fair wear and tear commensurate with the age and mileage of the Vehicle’.

    I acknowledge you had alloy wheel and tyre protection which would have covered the cost of a replacement tyre when you took the car for a service on 25 January 2018 at Audi Liverpool. At the point of inspection on the 25 May 2018 your tyre policy would have lapsed and therefore making you liable for the costs of a replacement tyre. I am empathetic to your situation as prior to this when the fault was noted no action was carried out whilst the policy was still active. However I cannot hold the finance company responsible for what was said to you about the replacement tyre not being necessary by Audi Liverpool.

    I understand your concerns regarding the lower mileage you’d completed. When the inspection was carried out the mileage was recorded as 24,398 miles against an annual allowance of 10,000 miles. But having reviewed your agreement there were no incentives when returning a car with lower than expected mileage. .

    my conclusions

    Taking all the evidence and information into consideration, I’m unable to conclude the damage is within the reasonable fair wear and tear guidelines under the industry standards.

    Whilst I appreciate my opinion will come as a disappointment to you, as you are responsible for any damage to the vehicle when it is in your possession, I won’t be asking Volkswagen Financial Services (UK) Limited to waive the charge of £224.75 as I do consider it has been applied fairly.

    • Hi Peter. The Ombudsman’s response sounds reasonable, although you are not bound by it and can proceed with legal action if you want to pursue it further.

      Audi Liverpool, Audi UK and Audi Finance are three separate entities, despite all using the Audi name and logo. Audi Finance can’t be held liable for anything a franchised dealer’s service department has said regarding the condition of your tyre. The dealership is not involved in your finance agreement, other than setting it up on behalf of Audi Finance in the first place.

      The dealer’s advice may have been 100% correct regarding the legal status of the tyre, but that doesn’t have anything to do with the terms and conditions of your finance agreement – in the same way that a dent in your bodywork might not make the car illegal, but would still result in a charge from the finance company.

      There is also no way of proving that the damage present in May was the same as that present in January (ie – it’s possible you could have damaged the wheel beyond the original sidewall damage in the intervening four months. I don’t see how you have any case against the finance company unless you can argue that the damage should be counted as wear and tear (which they are never likely to agree with).

  57. Hi, I have notified PSA Finance UK Ltd today that I am voluntarily terminating my agreement with them. They confirmed that I am able to do this as I have paid over the 50% and I have followed this up with a letter by email and also recorded delivery. Couple of questions though….
    1) My next payment is due to go out on 7th November and I have notified them today (5th) so should I cancel my Direct debit instruction to ensure they do not take another payment or will this show as a default on my credit file?
    2) I have some damage to the wheels and unfortunately for me, they are 18″ diamond cut so very expensive to repair. I have been quoted approximately £600 for all four wheels. I was told that basic wear & tear covers you for 50mm damage across the entire circumference of the wheel which is really not a lot. Therefore, I’m told that all of my wheels need repair work. Interestingly, because of the type of wheel i.e diamond cut and the specific pattern, they are unable to repair without slightly affecting the pattern, which could then be picked up as being an issue. It’s a lot of money to pay when I’m about to hand the vehicle back and I’m wondering how far I’d get if I argued it’s still wear & tear?
    3) I have a fair amount of excess mileage which I know they will try to penalise me for. My contract with them seems to state 11p per mile yet the dealership said 6p per mile. I am thinking of not paying it at all and stating that under the CCA 1974, they have no right to charge me any excess mileage at all since I have paid off 50% of my liability. Would you agree with this?

    • Any wear and tear will be arguable, but you will need to be able to justify your position if you want the finance company to accept your argument. There’s nothing further to say about excess mileage that’s not already covered in the article.

  58. Hi Stuart. I’m interested in your info about excess mileage charges not being enforceable. I have a clause in my mini select agreement that says ‘excess mileage charges are payable’ and the charge will be 5.18 pence per mile. As I have signed this agreement, does it mean I will have to pay when I VT?

    • There’s nothing we can add beyond what is said in the article. It’s a disputed area, but there is considerable legal advice to suggest that they can’t enforce it.

  59. Hi Stuart,

    I am planning on VT’ing my BMW in a couple of months (finance through Blackhorse) due to getting a company car.

    Unfortunately I am a fair bit over my mileage allowance. Although everything I’ve read indicated that I am not legally obligated to pay for the excess mileage I have come across a clause in my contract which states “You must keep the Goods under your control and in good condition and repair, and are responsible for any loss or depreciation of or damage to them other than fair wear and tear.”

    Of course mileage impacts depreciation so does this mean that I will be obligated to pay the excess mileage charge that they will undoubtedly attempt to send me?

    I would appreciate any guidance/thoughts on this.

    Best wishes,

  60. Hi, I have passed the 50% point of my HP contract and have discussed VT with the finance company, they sent me a pack which I am glad I did not sign at the time. My car is 8 years old and has just passed 124K miles – time for a new one! As with any car of its age, it has some marks on the bumpers, I have covered a nice scratch someone kindly put on it in the car park. Recently serviced but not a full service history, CAM belt is done and tyres all ok.

    My concern is the lack of definition of Wear and Tear – my opinion for a car of its age and miles is it is ok – but am concerned of ‘their’ opinion which is why I am holding off.

    Do I VT and ‘negotiate’ wear and tear costs? what happens if we can not come to an agreement on those costs?

    Any advice appreciated :)

  61. Hi I have a PCP agreement with fca automotive. I have just passed the 50% mark and unfortunately I’ve had to change my job for personal circumstances and now earn less. I have emailed the company stating that I wish to VT my contract with them and this is the reply:

    Good Morning Mr Wilkinson,

    Your agreement is a Motor Loan Plus agreement, which is much like a personal loan, in that the loan is against yourself not the asset, being the vehicle. The vehicle is completely yours and has been since the point of sale. For this reason you are unable to voluntary terminate your agreement with us.

    However you do have two alternative options. As the vehicle is completely yours, you do have the option of selling the vehicle, at anytime to anyone. The finance is separate to the vehicle meaning you don’t have to pay off the finance early to be able to sell the vehicle, you can just continue your monthly instalments if you wanted too.

    The ‘Plus’ part of a motor loan plus, means you do have the option of handing the vehicle back to us at the agreement end subject to mileage, however this is only at the agreement end.

    Kind regards,

    Megan Sirett

    End of Contracts & Loyalty Specialist

    Where do I go from here?
    Are they right?

    Please help

  62. Hi, I have paid over 50% of my car finance but the car has now failed its MOT and will cost more than it’s worth to fix (wasn’t a brand new car) do I have a leg to stand on if I try VT or have I no hope since it’s not in “good condition or general wear and tear”

    • Hi Sarah. If you VT the car without a valid MOT, you can expect the finance company to invoice you for whatever they would like to charge you to repair it, which is almost certainly going to be more than what you’d pay to get it done yourself.

  63. I am currently in the process of VTing my Citroen C4 as the finance company have been charging me somewhere in the region of 30+% interest. My monthly payments were just over £389 per month. This was HP not PCP so was a horrendous amount to be paying every month. The finance company advised me I could start the process over the phone which I did on Saturday. They said I would receive a phone call towards the end of this week. The car has done around 42000 miles over the past 32 months and has been serviced annually at the 12 month point. It so happens that my annual mileage is 16000 which ties in with the service interval. There was a slight knock to the tailgate which has been repaired and resprayed along with the bumper which had a couple of minor scratches. The only thing I’m slightly concerned about it is the wheels which have received a couple of knocks, however the dealership I purchased the car from have said it’s minor damage and would be covered under the fair wear and tear clause. My specific questions are: 1. Is the phonecall sufficient to start the process or should I be emailing them as well? I was clear in the call that I was voluntarily terminating rather than surrendering. 2. Do I have to keep the car insured under my name until they have collected it or can I complete an amendment to cover my new car which is waiting at the dealership? Again the girl on the phone said the car would be collected and driven under my insurance but surely they would have to have their own cover? 3. I have heard stories from a friend in the motor trade who has said that he has had customers waiting several months for vehicles to be collected so where and when does my liability cease?

  64. Hi hope you can help my soon to be ex wife Has a car in my name and registered to herself Im trying to put plans in place to hand it back to the garage but we stay of 300 miles away from each other – so I need to be there and can she be mde to hand it back if she’s the registered keeper (not the owner of the finance? ) I need a garage in inverness would the finance company tell me where to leave it as they are saying I need to keep it and pay over £6000 even though I only have a year left of finance?
    Many Thanks!!!

    • Hi Brian. If you are eligible to voluntarily terminate the car then the advice that you need to keep it and pay £6,000 is going to be incorrect.

      With regard to your wife being “made to hand it back”, in short, no. If she refuses to hand it back, the finance company will happily keep taking monthly payments from you – and if you switch off the standing order, they’ll invoice you and come after you for the payments.

      You will need to resolve any dispute with your wife so you can get the keys back (both keys!) and return the car to the finance company. If the finance agreement is in your name, the finance company will only be interested in chasing you rather than your wife.

  65. Hi, I’ve VT’d a HP agreement with Advantage Finance who want to charge me £80 for collection. I have used a template letter to respond with confirmation that my liability is limited to 50% of the total amount payable and that I won’t pay a collection charge.

    They’ve emailed in response to say I “If you wish to proceed with the voluntary termination, you need to call the team to go through all the legal requirements.”

    There is a small amount outstanding before I hit the 50%, but I have that waiting to pay.

    As far as I’m concerned, I’ve given notice of termination, they’ve acknowledged this, and now have 14 days to arrange to collect the car. Should I do anything else? I can ring them of course, but don’t want to be cajoled into a surrender situation.

    • Hi Pete. There’s no harm in talking to them, as long as you stick to your guns and don’t accept any insistence that you have to fill in any of their forms. You need to make sure you’re being reasonable while still making it clear that you understand your rights.

  66. Hi Stuart,
    I am in the process of VTR with Peugeot.
    They have sent me a “consent form” Which i am not signing.
    I have set the VTR date for the day after my DD goes to them as this payment will give me just over the 50%.
    I have told them this.
    I have only done 7985 miles in the 3 years I have had the car. I had a service plan on the car and it has been serviced after a year, and then last week so it missed a service however the dealership service department did not require the 2nd year service because of the very low mileage. Can they penalize me for that?
    They have also sent out a list of places I can return the car to or they will collect at a charge of £79.95!
    Do I have to pay the collection charge? would i be better taking it to the auction place directly?

    Many thanks

    • Hi Bev. If you have missed a scheduled service as set out in the owner’s manual, it’s likely that they will try and penalise you.

      In terms of collection, basically you need to be reasonable. If it’s not a massive inconvenience then you should return the car to one of the places on their list – after all, you are the one terminating the agreement. If it is genuinely a problem, you can insist that they collect it at their expense.

      In theory, they probably can’t enforce a collection charge unless they are able to show that you have been unreasonable in making the vehicle available for collection. However, it’s likely to simply encourage them to look harder for any other excuses to penalise you…

  67. Hi, I have completed 31 months of a 36 month contract, the half way finance figure is £19600, I have paid £21600 so far on finance, so I have paid more that half. There are no issues with the car other than mileage above contract. If I have paid more than half the contract, will I still be libel to pay the excess mileage charge of around £1000. can you advise please.

  68. Excellent Article thanks but I am a bit confused…..

    I put a £3k deposit down and have monthly payments of £360 per month over 36 months with a balloon payment of circa £16400. And a supposed VT 50% value in the Contract of over £16000.

    I am currently at month 32 in my payments.

    In my calculation I can never exercise my 50% VT rights as within the agreement, I will never get above £16k (360 x 36 = 12960 plus £3k deposit = £15960)

    Could you please advise.

    Many Thanks


    • Hi Vincent. Yes, your calculations appear to be correct. If there was any dealer or manufacturer deposit contribution, this is added to your deposit so would count towards your 50%. But if not, you won’t be able to VT the car during the three years. It’s very unusual to have a three-year balloon value that is more than 50% of the new car price.

  69. I have a private registrations on my car, should I change this back to the original plates before sending the letter as I obviously want to keep my private reg?

  70. Hello,

    I just wondered what the rule is in regards to the loss of the spare key. Would I be better replacing this before handing the car back to the finance company?


    • Hi Laura. Yes, it’s usually cheaper for you to replace it yourself rather than wait for the inevitable invoice from the finance company at whatever price they see fit to charge you.

    • Hello Laura
      I f you have lost the spare key and have not yet replaced it inform your insurance company as if your car gets stolen and you cannot produce the spare key they will not pay out

    • Best way to do it is to use the DVLA website rather than the paper logbook. You should get an immediate (automated) email from the DVLA to confirm that you have provided the necessary information.

      If you still want to use the paper V5C booklet, you need to fill in Section 9 (yellow).

  71. Hi Stuart, thanks for the article. Found it really useful!
    I have a questions – I have a car on finance with Audi, paid over 50%, and I have spoken to Audi who are happy to take the vehicle back with no further cost to myself. Great. But when talking to the advisor, she said that T&C have recently changed and when you voluntary hand the vehicle back and terminate the agreement it will affect my credit score badly. She said it will effect any future finance/loan/mortgage applications. She advised me to check out the Experian website for further information, which I done so, and it does confirm it will be “very negative and will have a serious impact on your credit scores” and “surrendering your vehicle and repossession are fundamentally the same thing in financial terms”.
    Is this correct or just a scare tactic that Audi may use for customers to keep hold of their vehicle and continue to make the monthly payments?

    • Hi Dylan. Voluntary Termination is your legal right and will not affect your credit score. It may mean that the same finance company (which, in your case, is probably Volkswagen Financial Services) may decline a future application from you, but should have no bearing on what other finance companies or banks do as they will not be able to see the circumstances of your terminated agreement.

      The section of the Experian site you are referring to appears to be talking about Voluntary Surrender, which is a very different thing from Voluntary Termination.

  72. Hi Stuart,

    Regarding your reply on 13 June 2018, 7:51 pm, there are some minor scratches on the car, but debating whether I need to get them repaired or not. Also checking on Mercedes website, they mention about tyres, would standard budget tyres suffice if i was to get them replaced or do they need the premium tyres on there?

    Regarding my comment about having the fact that my wife terminated her contract for 6 years on her credit file, will that affect her credit rating?

    Many thanks


    • They can’t penalise you for having perfectly legal tyres on the car, regardless of brand. The only thing that the law mentions is that the car must be in good condition and have no damage beyond wear and tear. There’s no way they could argue that putting a different brand of tyres on the car means it’s not being kept in good condition.

  73. Hi there,i have a question …i brought an car on finante 4 months ago,but the car have tehnical problems almoust every month,in 4months took the car 4times,and now the gear box broke down,and they sed is not under warranty,even tho they sed at first it iz,iam not willing to pay for the car anymore,as its full of problems.At the beggining they sed is all good and stuff,but oviesly ive been lied,what shall i do?thx

  74. I have just read Rishi comment 12 June 2018, 11:13 am

    I do wonder why they should be an adverse comment placed on your credit file for six years.

    In my agreement with GMAC there is no reference to “voluntary termination”, there is just a clause providing a termination right, “You have the right to terminate the agreement … half the total amount payable, that is £N,NNN.NN … ”

    My agreement does not indicate that this is a statutory right: it is just the right to terminate under a condition of the contract agreed between the parties to the contract.

    If a consumer terminates a contract in accordance with the conditions of the contract then why should the customer’s credit file be impacted? The customer is not in default of the agreement but is just exercise the rights provided for under the contract. It is no different in essence from terminating the contract at term.

    I wonder what your views on this.

    • Hi Stephen. VT does not adversely affect your credit score/credit rating. All of your borrowing history is listed in your credit history, but there could be a number of reasons why a contract is settled early. Your credit rating is only affected if you default on payments.

  75. Hi there seems to be a lot of good answers on here so I’m hoping you can help me also – we have a Land Rover Discovery on finance which I have already spent about 2k on repairs now lo and behold the timing chain has slipped and caused extensive damage to the engine – I could be looking at another 2k best case scenario worst is 4k + – I am two years into a 5 year agreement – I don’t think a VT is an option as the car is not in a road worthy state although through no fault of my own – does anyone out there know any options other than I have to keep paying for a car I cannot use for another 3 years.

    • Ah, the Land Rover Discovery. Keeping the AA in business since 1989…

      You’re correct that you can’t VT the car in its current state, so unless you have a warranty you’re stuck with fixing the car or settling the finance – whichever’s going to cost you less.

  76. Hi Stuart,

    We are in the final year of our PCP for a SMART car with only a few months left. We’ve got some minor scratches on the car and alloys but when we took it to a local bodyshop garage, they advised that even if we get scratches repaired, the showroom hire people especially to find faults with the car in order to charge us extra. The example he gave was that the showroom use a special machine which can tell the thickness of the paint use to cover scratches and they will come back and say it needs to redone again andnwill charge us for it. Is this true and do you think its worthwhile getting it all repaired to make it look spick and span?

    Also, we were hoping to return the car a few months early than when the 3 year term is up in September. Will they take a different view on the scratches etc on the car if were to try and return it a few months before the end of the 3 year term?

    Thanks in advance for your help

    • Hi Stuart,

      Just to add, we have spoken to the dealership about handing the car back early and they have said although it won’t affect my wife’s credit score, it will go on her credit file and stay there for 6 years (that she voluntarily terminated the file). Do you know what are the implications of this are?

      They also said they would request voluntary termination from the relevant department and they will email us the documents. From reading your previous advice, are there documents we need to sign or is informing them adequate enough?

      Really appreciate your help with this and my original queries

    • VT has nothing to do with the dealership – you are terminating your contract with the finance company directly.

      Your credit history will keep a record of all your borrowings for the last six years or so, but it won’t provide details of why a contract was ended early and it won’t affect your credit score. As explained in the article, the same finance company will know that you terminated the contract and may not be interested in lending you money again, but it shouldn’t affect your ability to get finance elsewhere.

    • Hi Rishi. If you know that the car is in good condition when you hand it over, and you have a signed inspection report that shows no scratches, you can easily dispute any charges they may try to lay on you. Take photos when you hand it over, make sure you check the inspection report and don’t sign it unless you agree with everything that’s written on it.

  77. January 2016 I purchased a car via a 5 year HP agreement. Unfortunately health complications mean I will have to have my left foot amputated. This causes problems as my car is manual, so I will not be able to drive this car as I am unlikely to be able to master the clutch and will require an automatic – even if I could eventually do this, I am not sure the DVLA would allow me to drive an manual and adapting the car would prove too costly.

    I have looked at the termination agreement I am still 12 months shy of paying the 50% needed to return the car. What are my rights and options?

    • Hi Stephen. Like most consumer credit contracts, your HP agreement doesn’t contain the right to terminate due to medical reasons. You can find out your current settlement figure and compare it to the value of your car, as you may be able to sell it to pay off the finance.

      You can also check health insurance policy you have to see if it covers this sort of thing. And you can always contact the finance company and explain the situation – especially if you have medical records to back up your position. They may agree to a reduced amount to settle the finance (it’s unlikely, but may be worth asking).

  78. I have a PCP contract and have now found that the milage per year I have is not enough and want to up it to a reasonable amount, so I do not have to think about going over the milage constantly. Can I get the contract changed so I can do this, or do I just have to grin & bare it?

    • Hi Mick. You will need to contact the finance company – some are happy to bump up the mileage allowance (this will put your monthly payments up to cover it), but some don’t allow it.

  79. Hi,

    I am going to do this when mine is up. I get the mileage now cannot be enforced, however, I have a graze on the left bumper when I scraped a wall!! I am thinking this will be charged, also, some one actually keyed my car and played noughts and crosses on the door!!!

    However, I would likely argue even with this damage, its cosmetic, and does not effect the cars performance etc, what are the chances they would still chase me, I am willing to pay it, but I’d go private, as i reckon I will be charged much more than what I can get the work done for.

    Any advice??

    • Hi Matt. Yes, the finance company will absolutely charge you for that sort of paintwork damage. You’re right in that it’s probably cheaper for you to have it done yourself rather than be charged by the finance company after you VT the car.

  80. Hi stuart
    I need help please so I took the car for mot and service where the car bought then after i drove the car home then next day car wont start so I send the car back to the garage now they check and they said they cannot find the problem and need further investigation and I need to pay £100 and if the problem still cannot find they need to check inside the engine and will take 11 hours of work and will cost me £1100. So I ask them to investigate my car.
    Now I VT my agreement by post to the finance company and I paid morethan 50% of the finance and a week has gone and i havent heard anything from the finance company and my direct debit will come this week should I cancel my direct debit or dont until they got back to me? Thank you.

    • Hi John. Once you formally VT the agreement, the contract is terminated and you can cancel your direct debit. However, it would be a good idea to contact the finance company and confirm they have received your termination letter, otherwise they may still try your monthly direct debit and treat it as a default.

  81. Hi Stuart,

    I have accepted a job overseas and would like to hand my car back. First of all, is taking a job overseas a valid reason to be able to terminate early? Or should I just say that my employment circumstances have changed?

    I have not paid over 50% of the total amount payable but would they let me pay this and then hand back?

    Is it the finance company that I contact directly? And not the dealership from where I got the car.

    I am looking to hand back at the very end of July/very beginning of August, is this something I can tell the finance company and therefore dictate the hand back date? Or is it out of my hands once I get the ball rolling with notifying them that I want to terminate?

    Any help with these questions would be greatly appreciated.



    • Hi Luke. No, moving overseas is not a valid reason to walk away from your financial obligations, regardless of your employment circumstances.

      If you repay 50% of the total amount payable, you can proceed with a VT. You will need to speak to the finance company – the dealer has no involvement once you have taken delivery of the car.

  82. Hi Stuart,

    What a great article this is full of information.

    I sent off a the legal beagles VT letter to my finance company.

    They have since sent me out a pack to sign. I rang them today to say I was not going to sign their pack. They said I have to or send them a new letter aboout me owing them no obligation.

    What do you suggest I do as I did not think I had to send them anything else? Shall I just drop the car off to a BCA site like they said in thier letter without sending them another letter?


    • Hi Matt. Once you have formally notified the finance company that you are terminating the agreement under the VT provision of your contract, the contract is terminated. You don’t have to fill in any forms or provide them anything else.

      You don’t need to write to them again. All they are looking for is an excuse to bill you further down the line. As Admiral Ackbar would say, “It’s a trap!”

  83. hi stuart, i have a pickup on a lease from leasys. am i able to give the car back? i know you have said in previous posts that i cannot do a vt. what are my options?

  84. Hi Stuart.

    After you VT a car and it has been inspected, how much will I get charged for kerb marks on alloys. There’s a couple of marks on one of the alloys but nothing major. Would they try to charge me for the cost of a brand new alloy or would it depend on how bad the marks are?

    Thank you in advance.

    • Hi Mally. It usually depends on the type of wheel – certain types of alloy wheel are more difficult to repair than others. The charge will usually be £50-£100 per wheel, and it’s usually cheaper to get it sorted yourself before handing the car over.

  85. Hi Stuart,
    I purchased a car three months ago. And now my living circumstances have changed meaning I can tell afford the payments. Am I in a position to do a early termination?

    • Hi Shaun. There is unlikely to be any easy way to extricate yourself from your finance contract. There are no clauses for your circumstances changing a few months into the agreement, so getting rid of the car will be expensive.

  86. Hi Stuart. Im currently got a PCP fiance with Jaguar. I got the car in March 2017. The car is not for me now as my work circumstances have changed. Meaning, the monthly payments are becoming a strain and the car not practicable for the job I now do. Im just over the milage by 1000 miles as well.
    What opinions do I have as im no where near the 50% bracket for VT?

    • Hi William. There are no good options, as your finance agreement does not make provision for your circumstances changing. You will need to work out what your current settlement is and what your car is worth. If you sell the car to a dealer, you will presumably have considerable negative equity to settle, but it may be less than the amount required to VT the car.

  87. Hi Stuart.
    I am a month short of 3 years in to a 5 year agreement and I’m looking to upgrade/change my car so I can get a more favourable agreement. Credit score wasn’t great due to lack of credit when I got the car so I’m paying well over the odds for the car. What are my options? I have a meeting planed with the company I got the car from so I can see what they’re opinion is.

    • Hi Will. Depending on the type of agreement, you may be in a position to VT. Without knowing what type of finance agreement you have (other than the term length), it’s impossible to say what your options may be.

    Jan 2017 I got a brand new Vauxhall Corsa (Corsa, i know) i have hugely grown out of it and want something different, i am paying £310 per month for a (yes again) Corsa 66 plate, the car is in brilliant shape and i understand that i have to pay half of the amount borrowed (£20600) halfway though my monthly payments amounts to around about £7500 so can i pay £2500 halfway through then volunatarily terminate the contact? Also not sure what counts as wear and tear, the petrol fuel cap isnt connected to the fuel pipe and the wheels are kerbed, what repairs will i need to make?

    • Hi Bradley. The VT point is half of the total amount payable, not half the amount borrowed or halfway through the term. Your contract should tell you exactly how much this amount is. You can then work out how much you have already paid (deposit plus monthly payments) to see what you still need to pay to VT the car.

      Any damage beyond normal wear and tear is entirely a matter of negotiation between you and the finance company. It may be better to get it all fixed up before VTing it.

  89. Hi Stuart
    My PCP handback car has a towbar fitted would this be a problem at the handback inspection?

    • Hi Simon. If you fitted the towbar after taking delivery, the finance company may insist that you remove it (or they may try to charge you for removing it). It may also depend on whether it’s an official factory-approved towbar or an aftermarket one.

      It may be best to call the finance company to discuss it with them.

  90. Hi, Stuart

    Slightly off topic but my car was damaged whilst being serviced at Audi (dented and scratched the bodywork, which was repaired by them) do I have a right to give the car back as the GFV is surely affected or am I stuck with it.

    The repair is good but I don’t want to pay x amount of money for a spray repaired car.

    thanks in advance


    • Hi Glen. As long as the repair is conducted by an Audi-approved repairer, it should be done to an acceptable standard. It won’t affect your GFV, so you can still hand the car back.

  91. Hi Stuart,

    I have requested for VT on my current PCP plan with Vauxhall. When checking the finance online it shows a longer term and a higher amount due than on the paper agreement. From looking further in to this the online account includes the final amount (balloon payment).

    Do you think they will refuse the VT even if they decide I am not at the 50% mark?

    • Hi Liam. Your contract is the determining document. It should tell you what your VT amount is and the online information can’t override your contract. It does include half of the balloon payment, as you have borrowed that money but you are not repaying it.

  92. Hi Stuart.
    I am handing back a VW next week. I have noticed uneven tyre wear on the inside of the front wheels. They are legal (4mm over central 3/4 of tread), but have been advised that they will need to be replaced. Is this likely to be classed as not fair wear and tear?

    • Hi Peter. If the tyres are legal, you should be fine. Tyres are obviously wear-and-tear items, so it’s fair that they should be worn (unless the wear is clearly excessive for the car’s age and mileage). I don’t see how the finance company could charge you for the cost of replacing tyres that are still legal.

  93. Hi Stuart, it’s the service and repair history from before I had my car though. So I don’t know where it visited for its first lot of repairs. It was 2 years old by time I got the car. When you say they’ll charge me, could it be in the hundreds or thousands you mean? I’ve heard that without some history the value of a car decreases so could it be the shortfall amount that they would charge me?

    • It’s likely that you’ll be in for an argument with the finance company. They will refuse to believe that you never got the original service history and blame you for losing it. However, the potential upside is that they make be more lax on having all the service docs since it was a used car in the first place.

      In terms of what they charge you, they will need to show justification or a fee schedule. The last dealer I worked for was a German prestige manufacturer, and they had a policy booklet with the charges for PCP infractions. Depending on the model of car, missing a service could cost anywhere from £900 to £3,000…

  94. The car salesperson used to suggest that we would have positive equity in our cars at the normal term; i.e. the car would then be worth considerably more than the bubble value which would fund a deposit on the next vehicle. With the downturn in the value of diesel cars, the incentive to keep the car to normal term is much reduced and voluntary termination becomes more attractive. Is it a good idea to exercise this option to rid oneself of diesel cars which have the stigma of being owned by environmental vandals?

    • Hi Stephen. We can’t advise you what is best for you. All we can do is advise how the process works, and provide information about issues like diesel car values. It’s up to you to take that information and decide what the best option is for you, based on your financial position and car requirements. Everyone is different, so what is good for one person might not be for someone else.

  95. Hi Stuart

    I have just double checked my agreement which shows an amount of £24,969 payable as the 50%. This means I would not reach the VT point until the 43rd month of a 48 month term. Does this sound about right? Am i missing anything. There is a balloon payment of 21K at the end of the 48 month term?

    • Hi Craig. That certainly sounds reasonable, especially if you had a low deposit or the car has quite a high balloon value as a percentage of the original price.

  96. Hi Stuart,

    I’ve had my Jeep Cherokee VT’d on the 23rd Nov 2017 (the day the car was collected). The guy who inspected it wrote a bill of £281 as the wheel trims were slightly rusty which isn’t my fault as the driver! I rang FCA Auto to complain and they said this £281 is just an estimate and they will write to me within 6-8 weeks with a final bill if I need to pay anything. I did not hear anything so assumed the case is closed. Just got a letter through today more than FIVE months after the car was collected asking for the amount of £281!! I cannot afford this anymore and it has been such a long time that I’ve moved on with my life! Where do I stand? Do I still have to pay?

    • Hi Ady. Anything of that nature is negotiable or disputable. If you signed the inspection report that had the £281 noted on it, you’ve basically agreed with what was stated. If you refused to sign the report or were not given the option to sign it, you have a much better chance of getting them to drop the charge.

      The finance company will argue that you have failed to take good care of the vehicle (as stipulated in the contract) by allowing the wheels to rust, so it will be up to you to dispute their allegation. You’d have to argue that the rust is a fault of the vehicle design or manufacturing, rather than any damage caused by you.

  97. Hello. What could happen if you are missing any service or repair history documents? I know that this could decrease value of the car. So when vehicle inspector receives the car without some of the history they can bill you – are they able to source these documents themselves?

    • Hi Stacey. It is your obligation to make sure that the car is kept in good condition. If you can’t provide evidence of service history, the finance company will certainly try to charge you for this.

      You should be able to go back to the dealership that serviced/repaired the vehicle and get them to reprint the service reports and invoices. The finance company could probably do the same, but they won’t. They’ll just charge you.

  98. Hello I am in a 43 month agreement amount of credit was
    £26332.68 divided by 2 = £13,166.34
    I have paid £9324 already so if I paid £3842.34 could I walk away?
    I have now got a company van after a job change and cant run/store both

    • Hi Charlotte. The VT amount is half of the total amount payable, not half of the amount of credit.

      The total amount payable includes your initial deposit and dealer deposit contribution, plus any interest and fees. The amount required to VT the car should be stated clearly in your finance contract. If you had a reasonable deposit at the start of the agreement, you may have already reached the VT amount.

  99. That’s a more positive outcome than I thought it would be. However, do you know if these things cost much to replace? I’m thinking that I may just let the vehicle inspector bill me for the manual when they come for my car. Another question: I think that I may have been a few days late with my last mot – would the vehicle inspector care very much about that when inspecting my documents? And are the service/repair documents needed for all service and repairs done even before it was handed to me? I’m worried about looking these out. I definitely have all my service and repair documents. Thanks.

  100. Hi there, I’m about to sign my form to voluntarily terminate my agreement. I’ve met the minimum 50 per cent in payments and my car seems to be in good condition – it passed mot in September 2017 and then I took it for an additional health check last month with Arnold Clark and again no problems. I do have with an item they are asking me to return along with my car, the vehicle manufacturer handbook manual. I have all my car documents together from when I first got the car from Arnold Clark and can’t find this amongst them. I’ve been told to speak to Arnold Clark and ask them if there was one given to me at the point of sale time. Thing is, I’m certain they will tell me that yes they did. In any case, I couldn’t argue against this because they may say that I should have checked all my things at the time to make sure everything is there that’s needed and therefore my own fault if 2+ years later I realise I don’t have this – am I right? I am trying to speak to someone at Arnold Clark to ask them if they did include this with the sale but no-one is coming to the phone to speak to me about it. I think it’s very likely that I’m going to have to pay something to cover the cost of the manual. Do you know how much these things can cost? Can I get a hold of one myself from somewhere before I hand my car back over – though I imagine that each handbook manual is specific to each individual car and there’s not a pile of them sitting somewhere to be handed out. Thanks.

    • Hi Samantha. Try online sites like eBay, and then vehicle dismantlers.

      You are right that the handbook has to be specific to the make and model, but there are probably plenty of vehicles that have been crashed or have been otherwise dismantled, so there will be books available.

      You almost certainly also find that the vehicle inspector who appraises the vehicle is unlikely to look at the book too closely, so if it’s not exactly correct I’m sure they won’t even notice.

  101. Hello Stuart

    My PCP agreement is based upon 48 months, however, I have calculated that I can exercise my statutory right and terminate the agreement at the 38 month point when the value outstanding is 50% of the amount payable. There is a clause in the agreement which reads as follows: “You have the right to repay all or part of the credit early at any time.” Can I make a payment, at a chosen point in time, such that I reach the 50% earlier than scheduled and then terminate? Can I force an earlier termination by making earlier payments? I could for instance avoid a scheduled service by terminating earlier.

  102. Hey Stuart, if i were to contact my finance company to see what percentage i had paid off in regards to me possibly wanting to VT, will they share that info with me?

    • Hi Lee. Yes, the finance company should be able to tell you how much money you have paid so far. Or you can work it out yourself, as it will be the deposit you paid upfront, plus the total of all the monthly payments you have made to date. Your finance contract will tell you what your VT amount is, so you should be able to calculate how much further you have to go.

  103. Hi Stuart, hoping you could give me come advise please. I have a PCP lease agreement on a 48 month contract of £156 a month which i took out last September. When i took out the car i told the adviser that it is a possibility that i might return to working overseas so asked him if i could just return the car when i wanted and he not once spoke to me about any termination fees so it was only today when i read through all the paperwork and saw that to end the contract i would have to pay the 50% amount of £5,081.11. Is there anything i can do as both myself and my mum who came with me remember that we were not told anything about termination fees so signed the paperwork in the office and once home i didn’t read up on the contract.

    • Hi Daisy. Unfortunately, a verbal promise (or lack of) is worthless. What is important is what is written in your contract.

      It’s a common myth that you can hand back a car at any time when you have a PCP, but it’s simply not true. We cover this in our recent article about the Top Ten PCP Myths.

  104. Hi Stuart. I recently handed my car back using VT. my question is that when I handed the car over they signed the v5c3 (transfer of vehicle) without conducting an inspection of the car. Does this mean that I am no longer liable for the car should they wish to bill me for repairs that they deem below reasonable should they find anything? And by them signing this does it it mean I would no longer be liable for anything of which they dispute? Thanks

    • Hi Chris. Any claim they make for damage beyond wear and tear can be disputed, and they’ll have no indisputable evidence that the damage was there when they collected the car.

      Hopefully, you took plenty of photos of the car before it was collected so you have good evidence to counter any such claims.

  105. IM Inyerested in an answer I too got a new car just a week ago but my partner lost her job and now I am panicking as I don’t want to be under any more pressure. What can I do

    • Hi Neil. There’s no provision in your finance contract for not being able to afford the payments after you’ve got the car. You’ll need to manage your finances and hope she gets another job soon.

  106. Dear Stuart,

    Thank you for answering my question previously and your forum is really helpful for me to decide which option to go after PCP ended.

    I went to an independent dealer to value my car. As expected, it has gone into negative value of -£800. I decided to settle my balloon payment and keep the car for a year before selling it. (Based on one of your previous threads in the forum) By the way, the car is in mint condition, with the desired specs we added on when purchased as new.

    The problem comes. Settlement amount is £12000. I have three terms left to complete the PCP contract. Due to financial circumstances, I can only afford to pay on credit card every month until it settled (exactly 3 terms). Over the phone, The finance company said because it’s too near to settlement, they can only take one payment of £5000 by credit card. The remaining £7000 has to be cleared by direct debit/cheque as lump sum.

    However, my contract did not mentioned method of payment as long as I can settled it within agreed period of time.

    What should I do now? Should I write to the Finance company (ie Manager)? Rather than speaking to customer service?

    Apologise for being long winded.

    Thank you for your time.

    • Hi Eric. I’m not sure what your legal rights in terms of how you can settle the outstanding finance, especially if you want to pay it in multiple instalments. You’d need to speak to a specialist contract lawyer, or visit legalbeagles.info and see if they can offer you any advice on that.

  107. Hi Stuart.

    I took on finance with the manufacturer in 2014 and my contract will terminate in June 2018. There are mild scratches on alloy wheels, damage to retractable cup holder due to frequent usage (require new part to install), a 20p size bump above wheel arch (most probably supermarket trolleys). Also, I have exceeded the mileage by 4000 miles. Otherwise, the car is in absolutely pristine condition in and out.

    My question is:-

    a) If I VT now, do I legally need to pay for the charges if they claimed for damage/excess mileage on car? I am literally not using the car now to prevent any excess mileage and to keep it safe, just in case, I have to return it and walk away.

    b) I would like to part-ex with used car company. Would they also ask me to pay for the damages? or they will just take away my car as deposit as I am buying one of theirs.

    Thank you for your time.

    • Hi Eric. Damage and excess mileage are two separate issues. Majority of legal opinion is that you can’t be charged excess mileage if you VT your contract.

      However, you can be charged for damages above wear and tear. It is up to you and the finance company to argue over what is considered wear and tear, and what is damage beyond that. I suspect that they will try to charge you for all of those points you have listed, so you will need to argue why the damages you have listed should be considered normal wear and tear.

      If you are part-exchanging the car, they will assess the value of the vehicle as presented. They will make an allowance for any work needed before the car can be sold onto the next customer, and then it’s a matter of whether their offer for your car covers your finance settlement.

  108. Hi Stuart,

    I took on a car finance with Barclays 3 years ago for £16,000 and requested a voluntary termination, they wrote to me and asked to sign enclosed form which I have and sent this off. I didn’t receive any acknowledgment for 3 weeks which I had to keep chasing and was finally told they had received and I was able to drop the car off to Manheim ( car auction).

    The car was in absolute mint condition but the alloy wheels had some wear a tear, body work didn’t have any dents or deep scratches.

    I am now abit worried after reviewing these forums, that I may have signed off all my rights.

    I was also under my recommended mileage ( 8,000 a year). Another thing that is worrying me, I cancelled my direct debit but when I spoke to Barclays they said that would be fine and if I was ever charged for wear and they would write to me.


    • Hi Gopesh. You shouldn’t have to worry about cancelling your direct debit, as once you formally notify the finance company you are terminating the contract, it is terminated. If they decide that you owe them money, they’ll definitely be in touch.

      Any charges for damage are able to be disputed, so it depends on how much you want to argue with them over it. As to whether you have signed away any of your legal rights, that’s something you’d need to discuss with a solicitor if there are any problems.

  109. Thanks for getting back to me, that helps a lot! Just out of interest, why can’t they refuse if I voluntarily terminate the agreement as apposed to waiting until the natural end of the agreement?

    • Voluntary termination is your legal right on a secured loan like a PCP or HP. As long as you have repaid 50% of the total amount payable, you are legally entitled to terminate the agreement and hand back the car. If your agreement is governed by the Consumer Credit Act 1974, then you have this right and it will be clearly spelled out in your finance agreement. If, however, you have been in breach of the agreement (for example, you have missed a few payments), the finance company can contest the termination.

      At the end of the agreement, the finance company offers to accept the car in lieu of the remaining balloon payment. This is not a legal obligation like VT, simply an alternative form of settling the outstanding balance. However, they will only cover you for the full amount of the balloon if you have complied with their requirements for servicing/mileage/condition.

      Alternatively, you could wait until the end of your agreement and then VT the car if you are worried about being charged for excess mileage or missed services.

    • No, if you pay off the loan then they won’t care what condition it’s in or whether you’ve ever had it serviced. The car’s condition, mileage and service history are only relevant if you want to give the car back and claim the GFV at the end of the agreement. For more information, have a read of our article about your options at the end of your PCP.

  110. hi i am just wondering if your financing a car on pcp, theres an optional final payment can you sell the car to pay the final payment instead of giving the car back or would they still own the car before the final payment so would you get in trouble for it? thanks

    • Hi Jorja. Generally, no you can’t sell the car as it’s not yours to sell. However, if you talk to the finance company then they may offer a solution where the buyer pays the finance company to settle the finance and then pays you any leftover amount.

  111. Hi Stuart,

    I have a car on PCP with Renault that is due to end next March and I wish to hand the car back. My 2nd service is due now at 12,000 miles. But with my first service I had it done at 7,600 miles (after 8 months instead of 6 months). My contract says in order to hand the car back over “there is a complete and properly recorded service history which accords with the manufacturers recommendations”. Does this mean that because my service was done 2 months/1,600 miles late, they can refuse to take my car back? As of course they recommend you have your service every 6,000 miles or 12 months depending on which comes first. Thanks!

    • Hi Annalise. Are you talking about voluntarily terminating the agreement now, or handing the car back next March at the end of your contract?

      If you are terminating it now, the finance company can’t refuse to accept the vehicle. They may try to charge you for missing the service window but you would have reasonable grounds to refuse payment (they can only charge you for damage above normal wear and tear or from you failing to take good care of the vehicle, and those are pretty vague definitions).

      If you are giving the car back at the end of the agreement, the finance company is probably in a stronger position to charge you as you have failed to honour your agreement. Again, they probably won’t refuse to take the car back, but they may try and grab a few hundred extra quid from you if they can.

  112. Hi
    I have just vt our car the finance is in my name [i pay the bills] and the car is registered to my partner will this affect the ability to vt it .

  113. Hi Stuart, I purchased a Polo from VW Dec 2015 on HP. I am now in two minds about selling the car, I have requested for a settlement quote to see what the amount will be. Do you reckon I would benefit from VT, (as i believe i have paid 50% considering its been 2.5yrs now) or paying from the car outright and then selling it to a private dealership to make that money back.

    • Hi Shaunna. We can’t advise on which path to take (we’re not allowed to provide specific financial advice on what you should do).

      What you will need to do is check your finance contract to find what the exact VT amount is, and then work out if you have already reached it or whether you would need to put in more money to get to the 50% mark.

      Then you would need to call the finance company and get your current settlement figure. Speak to a couple of dealerships and get specific quotes of what they would pay you to buy your car and settle the finance. Once you have all that information, you should be in a position to make the best decision.

  114. Hi
    I took out a 3 year Hire purchase agreement in October 2016
    I have recently been told I have become partially sighted/ legally blind, so am no longer permitted to drive.
    Should I have any issues getting out of my agreement?

    • Hi Gaz. There is nothing in your finance agreement that lets you cancel it for medical reasons. However, if it is a classic hire purchase agreement with no balloon, you should be pretty close to your VT point now (the amount should be written clearly in your contract), so you should be able to VT the car with minimal or no cost.

  115. Hi could you tell me if I get my car on PCP but then cancel within the 14 days am I liable for all the interest over what would have been 36months or just the 14days?

  116. Hello Stuart,

    I have wrote to my finance company to tell them that I want to VT my agreement, I rang them this morning and they confirmed they had received the letter and that they were processing sending me out a “pack” at the moment and I would receive it soon and that I have no further liability to pay. I have a couple of questions, the first is they said I have two options regarding the return of the car either get it collected from my address or I could take it to an auction site close to my house. which would you recommend? and I the second is that I self serviced the car in the time I owned it as a qualified mechanic and stamped the book and reset the servicing interval using the software I have, are they likely to query this in any way?

    Thanks Alex

    • Hi Alex. Yes, the finance company is likely to charge you for failing to have the car serviced by a franchised dealer, on the argument that its guaranteed future value (GFV) is based on a full manufacturer service history rather than self-servicing. It is probably written into your finance contract that you need to have it serviced by an authorised dealership.

      As for collecting vs delivering it to the auction site, it’s up to you. Obviously it’s more convenient for you to have it collected, but make sure there are no collection charges for that.

    • thanks for replying so fast. The car was bought under HP not PCP so I didn’t think there was a GRV? I had a read through the contract and it says must be serviced to manufacturers recommendations so I could hopefully argue my point against it as it has been!

    • It will depend on the wording used in your contract. “Serviced to manufacturer’s recommendations” means you can have it serviced elsewhere as long as it’s a recognised garage and you can provide proof of servicing.

  117. Hi I bought my pcp car yesterday, is there any legal right I can hand back the car to the dealer? I have 14 days to cancel the finance on the car but not sure if there is a right to giving your car back if your not happy with it.

  118. Hi again Stuart,

    So I sent my VT letter to FCA (Fiat Finance) via first class signed for last Wednesday (7th) which they received on the following day… how many days should I expect to wait until I hear back from them? I’ve not yet received any letters, emails or phone calls, but I did receive a text message yesterday asking for my feedback in relation to my ‘recent contact with imogen from Fiat Financial Services’!
    I’m a little confused.. should I be getting in touch with FCA via email or phone to ask what the hold up is?
    Many thanks in advance,

    • Hi Scott. If you have sent in your letter and you have confirmation of the finance company’s receipt, you can cancel your direct debit and withdraw permission for the finance company to withdraw money from your account.

      You can certainly call the finance company and confirm that they have terminated the agreement and ask them when they intend to collect the car.

  119. Hi Stuart, do you have any tips for when the vehicle is inspected/collected? My finance company has now conceded to accept my termination without me signing the termination pack but I am concerned they may slip something in the paperwork I presumably sign when the car is collected.


    • Hi Ross. The finance company’s representative will fill out a vehicle inspection report when they collect the car. You will be asked to sign it and it is in your interests to do so, so make sure you agree with everything on it before you do. There’s no other paperwork that you need to sign.

      If you don’t agree with any damage or condition comments they have made, you can dispute it. Any damage that is on the car (over normal wear and tear) will be chargeable once you return the car to the finance company.

      Make sure you get a copy of the inspection report so you can dispute any charges for damage that was not present when you handed over the car (it happens from time to time, as the car will be driven from your place to a lot maybe hundreds of miles away and parked with hundreds of other cars to await auction).

  120. Thanks for the reply Stuart. Is it possible to send my figures for you to check over? Also what would happen with the towbar I’ve fitted if I VT?

    • Hi Peter. No, we can’t look at individual numbers or cases. We are not registered with the Financial Conduct Authority to offer specific advice to you about your situation. The information we provide is purely of a general or hypothetical nature, rather than specific to your situation. It is up to you to use the information to make the best possible decision for your circumstances.

      The towbar won’t have any bearing on the VT if you had it fitted after the purchase, rather than fitted by the dealer and included in the original vehicle price. You can remove it and ensure that the vehicle is returned to original condition, or hand back the car with the towbar. If the finance company insists on the towbar being removed then they will charge you for it, so it may be best to call them to discuss first.

  121. I had a car on PCP and 35 months into the 48month contract we decided to part-ex for a new car but were horrified that its value was about 4K short of the outstanding finance. Even if we returned it to the garage we bought it from (VW) we wouldn’t get the finance paid off. I decided to VT it and was really successful. VW finance were very helpful and though I was really worried about British Car Auctions coming to get the car it went well and I was even given back 2 payments that had gone through in the time from me making the phone call to VT and collection of the car. The total amount outstanding was paid off by them.
    However, I am now buying another, smaller VW and thinking of taking out PCP again… will I be declined because I have already done a VT though them??

  122. Hi Stuart. Does any contribution from the dealer count as money upfront in the calculation for VT? I’ve hopefully caluculated mine correctly using the advice above. Also I’ve paid to have s towbar fitted by the dealer I got my car from, what happens to this if I terminate as technically it’s mine and not part of the deal with them?


    • Hi Peter. Yes, the deposit contribution counts towards the Total Amount Payable and therefore your VT calculations. This works in your favour compared to the dealer simply discounting the car by the same amount.

      Let’s say the car costs £20K and the deposit contribution is £2K (we’ll ignore interest and fees). That makes your VT point £10K, and you are already £2K towards that before you start using your own money. So you only to put make £8K of payments to get to the VT point.

      If the dealer was to discount the car by £2K instead, the price would now be £18K and therefore the VT point would be £9K. So you’d need to make £9K of payments to get to the VT point.

  123. Hi stuart has the law been changed recently with regards to voluntary terminations? I’ve just called up my financial lender creation. I’m 2 months over half of my payments and asked to do a VT but they said since September last year they no longer do it? Is this right? Please help.thanks

    • Hi Kirstie. No, the law hasn’t changed. You will need to look at your contract to make sure that you do have VT rights in your agreement. The Creation website currently only shows them offering personal loans, which do not have VT rights. You have to have a secured car finance product like a PCP or an HP to have VT rights.

      If you do have a VT clause in your contract, then they are obliged to accept you terminating the agreement.

  124. Hi Stuart. Thankyou for all of your help and advice.

    In relation to VT, once your letter is received by you finance company how long could the process take from start to finish? I understand that the finance company could delay the process and try to claim for excess mileage so could it take weeks or even months?

    Also, when the company comes to collect the car will they require any documents to be signed? If there is I’m guessing the there will be something in these relating to the excess mileage and signing them will make you liable for paying these.

    If there is forms what would happen if I refuse to sign these documents?

    Thank you again for your help.


    • Hi Stuart.

      I’ve been on the LegalBeagles website and have seen the advice about signing documentation so no need to advise on this.

      So if you could advise on how long the process could possibly take then I would be most appreciative.

      Thank you again.

    • Hi Malcolm. I don’t know that there is an official time limit on how long the finance company can take, but it’s really not in their interests to drag it out. They will want to get the car off your hands and into the next available auction so that they can recover the maximum amount of money for it, and the longer they leave it the less it will be worth.

      Once the car has been handed over to the finance company, their admin processes will swing into place to invoice you for any outstanding monies – including any attempt to charge you for excess mileage. Again, there’s no gain for them by slowing this down.

  125. Hi Stuart. I’ve been struggling with my payments for the last 6 months but I will shortly reach the 50% VT threshold as stated on my Fiat finance PCP contract (£7624.46). Next payment will be due 3rd April (£179.36) which will mean I will still owe £7618.12. This will be £6.34 Shy of 50%!
    Is there any way I can avoid another full payment on the 3rd May and pay the £6.34 separately to Fiat Finance?
    Many Thanks in advance…

    • Hi Scott. Yes, you can VT at any time. If you have paid less than 50% of the Total Amount Payable, the finance company will invoice you for whatever is still owing (or you can simply call them up to make the payment for the balance). If doesn’t matter whether the balance is £6, £600 or £6,000, the principle remains the same.

  126. Hey Stuart, I’m seeking some help, i have a car on HP for over a five years period. i had it since September 2014, very soon i won’t be able to afford it and i can’t afford to pay the resettlement payment. Is there any advice you can give on this problem

    • Hi Jemerl. If it’s a five-year HP and you are now approx. 3.5 years into it, you have probably reached the VT threshold and should be able to hand the car back. Check your finance contract and it should have the VT amount. You should then be able to work out from your initial deposit and monthly payments to date whether you have reached it yet.

  127. Hi Stuart – Reading through your article regarding VT on PCP. I have had m car since October 2017, I have a situation where my work contract is going to end and will not be extended. Due to my financial circumstances will change, can I VT my agreement with the finance company? Regards, Gary.

    • Hi Gary. If you’ve only had the car for four-ish months, you’re going to be a long way away from the VT point. You can VT the car, but you will have to pay the balance up to the 50% mark, which will almost certainly be many thousands of pounds.

      There is no provision to end your contract based on changing personal circumstances.

  128. Hi Stuart. I have read so many comments on here mostly about the process of VTing their car and disputing the excess mieage charges from the finance company. I am currently in the same situation. You have given valuable advice. BMW sent me the Voluntary Termination Notice pack, which I have signed but not posted. After reading your advice, I’d probably won’t and use the email template from LegalBeagles instead. My question is that you have given advice to many people about their right to dispute the excess mileage charges, did anyone come back to you and say they have succeeded in not paying the excess milleage fine. I wonder if this battle worth the fight if you are on tight budget, against big company, legal fees and if I loose, the cost will be huge. I will fight unless I know I stand a bigger chance of winning. Your thoughts please.

    • We can’t advise whether you should or should not refuse to pay your excess mileage charges. Your decision may depend on whether you always intended to VT the agreement, whether you feel you were properly informed of how VT works and whether the finance company would pursue you for excess mileage, or whether you can be bothered fighting with the finance company (and their determination to fight you will depend on how much money is at stake).

      Plenty of people have disputed excess mileage charges and won. They generally don’t come back here to talk about it as we’re not a real community, but there are plenty of owners groups and communities on the internet where people have shared their success stories.

      All we can say is that it’s unlikely that any finance company will actually ever take you to court over excess mileage charges.

  129. Hi Stuart, are you still liable for the remaining interest even when terminating 1.5 years before the end date? As this would be paying them for nothing, surely?! Andrew

    • Hi Andrew. If you are settling the finance early (ie – paying off everything in one hit), you will save on interest as you are not borrowing the money over the full period.

      If you are voluntarily terminating the agreement, you are exercising your legal right to cancel the agreement well before you have paid off what you owe, so the amount remaining and whether it’s capital or interest is irrelevant.

  130. Great article and great advice. Just VTing our Audi which has around 25k excess mileage which Audi finance are adamant is payable. What’s the best starting point to contest this? State CCA clauses, ignore them, refuse to pay? Thanks

    • Essentially, yes. If you are 25,000 miles over your agreed mileage, they are going to pursue you pretty hard. The average excess mileage charge is about 10p per mile, so presumably the disputed charge is going to be somewhere around £2,500.

  131. Hi Stuart,
    I’m contacting with a query really. I brought a Ford Focus over a 5 year period. Just over 3 years in the engine failed- diesel at just over 61k miles. It was booked in to have its service the day after it failed. Ford refused to help. Santander said I had to continue to make my payments.
    It seemed all mechanics were aware of issues with faults with this particular engine which they only manufactured for 1 year. Throughout my first 2 years it had been in and out of the garage due to injector issues.
    Santander finally said I had to get an independent engineers report to prove a manufacturing fault. That they did not own the car and that I did.
    As it happens when it went to a garage for this repair it was stolen by the garage – classed as civil not legal.
    But I was never told or even aware of VT until a couple of days ago by a garage over my current car.
    Should I have been informed? Any action I can now take?
    I paid all of the payments on the car and so was left sharing my partners – until his engine also failed at 4 years into his plan. The same car, model and age. He’s paying his final year off through his current plan as again no mention of VT.

    • Hi Louise. If your finance agreement includes VT rights then they will be spelled out clearly in your contract – they have to be by law. If you don’t read your finance agreement, you can’t complain about not knowing what’s in it. If you did read your finance agreement and there is no mention of voluntary termination then you don’t have VT rights in your agreement.

  132. Hi Stuart. I handed my car back on vt after paying 50% off my finance. I received a letter today stating that they have now sold the car and as the amount still owed was more than they sold the car for they have passed the outstanding to a agency for collection!. Is this legal as I thought there was nothing to pay after I handed my car back. Thanks for your time. Brendon Cox

    • Hi Brendon. It sounds like the finance company is treating your case like a voluntary surrender rather than a voluntary termination. This is a very different thing.

      You need to ensure that you have been very clear in your communications with the finance company that you were voluntarily terminating your agreement as per Clause [X] in your contract. And going forward, reiterate that you are voluntarily terminating the car therefore have nothing further to pay.

  133. Hi, I want to VT my car this month, however the tyres are very near the minimum limit. Will I have to replace the tyres and if so do the tyres have to be a certain brand?

  134. Hi just looking bit of advice, I just recently got a car on pcp near 2 months ago and I’ve had a change of mind and want to give it back but I really dont want to pay half of my agreement for only having the car 2 months?
    The car is worth £10,700 and think it worked out around 13 grand to pay altogether over 4 years. Just wondering if theres anyway out of it before a certain amount of time?

  135. Hi Stuart, when working out whether you have reached the 50% mark do you consider the deposit that was initially made at the start of the agreement? I have a PCP contract, and have roughly 4 months left – am I able to VT? I am considering VT and have exceeded the agreed mileage, so I want to have a strong argument to avoid paying the excess. Generally the car is in good condition, with minimal scratches. However, the grill has dropped (unsure of the reasoning but no damage to the car). Am I best to have this fixed first before terminating? I’ve kept up to date with the required services and the MOT is not yet due. Thanks

    • Hi Sophie. Yes, your initial payment or deposit counts towards your VT point, as does any part-exchange vehicle you put in towards the new car.

      You will need to take a judgment on repairing any damage before VTing the car. The finance company will almost certainly charge you for whatever it thinks it can get away with, so you can: 1) get it fixed before handing the car back, 2) hand it back and let the finance company decide how much the damage is worth, or 3) hand it back and argue that it’s simply wear and tear, therefore you don’t need to pay anything.

    • Hi Stuart, thanks for getting back to me. We decided to VT – we done this via email and a written letter. I also got the grill fixed (it wasn’t damaged, just needed to be clicked back into place). I’ve also changed the front two tyres. We received email confirmation that the VT is in process. We have also received a letter stating that collection fee is £70 (this is also in the contract). It also says that during inspection, the car will be inspected in line with the BVRLA guide and then states we will need to sign the form to say we were present at the inspection, and that “if you need to pay any chargers for damages or excess mileage, we’ll tell you how much… otherwise your liability under the agreement will end”. When looking through the BVRLA to Fair War and Tear, it doesn’t mention excess mileage. Are we able to dispute the excess mileage charges? Also how does it work with the V5 form? Thanks again

    • Hi Sophie. As our article above explains, excess mileage is keenly disputed. But generally, the weight of legal opinion is that no, they can’t charge you for it. However, they will quite probably try.

    • Hi Stuart, we recently received a letter from the finance company stating we owe £1,073.58. This is for excess mileage (£602.58) and ‘unacceptable damage’ including ‘scuffed’ alloys and ‘dent’ to a door. There is also a request for the collection fee. Now we were told to expect a letter with any outstanding fees within 6 weeks of the car being collected – which was collected on 20th Feb. This letter is dated 10 weeks from this date. What/how would be best in dealing with this? We also had issues regarding collection – they were meant to pick it up on the 19th and didn’t show – so I begrudge paying the collection fee… Any help would be much appreciated – thanks in advance

    • Hi Sophie. You can dispute any/all of those charges. It just depends on how hard you want to fight the finance company.

      They can only charge you for anything over and above fair wear and tear. You are within your rights to dispute the damage to the door and wheels, but there’s no real legal guidance to assist you (or them).

    • HI Stuart, we are still disputing the charges following our VT, which happened back in February… The company removed the damage charges and collection fee “out of good will” but is still demanding £602.58 for excess mileage. They claim that exceeding the agreed mileage allowance can be seen to be the customer contravening the agreement to take care of the goods as agreed therefore able to charge customers if they have not adhered to their mileage allowance, stating under CCA 1974 section 100 (4) and the terms and conditions of the finance agreement, they can reclaim for damages to the goods. What would you advise in responding to this? I am not prepared to pay for the excess mileage – I also worked out its £100 more than what they are claiming… They also stated any charges would be sent within 6 weeks of collecting the vehicle but its now 8 months later.. Any advise would be much appreciated -thanks in advance!

    • Hi Nicky. Yes you can VT at any time as long as you have paid more than 50% of the total amount payable. So if you only have the balloon left to pay, you are well past the 50% point.

  136. Thank you for getting back to me and explaining this. I’d like to ask a few other things too. To VT, will I be expected to complete and sign a form or would a letter be allowed? Also would they want to see all up-to-date documents such as MOT/service? My MOT passed in September there and they advised that I get a couple of tyres changed over because of treading – which I did immediately of course, as were near the limit – and then they suggested that Jan/Feb I bring my car back for a check on break pads because they would perhaps need replaced in coming months but my health check Jan/Feb should let me know when this would need to be done. Am I supposed to be getting these break pads fixed before I can hand car over because outcome on my MOT states that in coming months break pads may need changed? I’m just wondering if I need to go ahead with health check on my car this coming month Feb and getting the break pads fixed before I go through VT and handover the car. I just wouldn’t want to pay for something unnecessarily if not going to have the car for much longer and get use out of what I’m paying for. Thanks.

    • To execute a voluntary termination, you only need to inform the finance company in writing – and it’s best to quote the relevant clause in your contract. Once you have done that, the contract is immediately terminated and everything else is just tidying up any outstanding bits and pieces.

      You don’t need to fill in any forms or sign any additional documents, regardless of what the finance company tells you. The only form that you should carefully read and sign is the vehicle inspection report when you hand the car over. Make sure that you agree with every single aspect of the inspection – if there is anything you disagree with, make sure you note it on the form and initial it. If possible, insist on taking your own copy of the signed inspection report, to prevent the finance company making up any additional damage charges that you are unable to dispute.

      You need to make sure that you hand over all the current documentation for the car, so they can’t charge you for losing the service book or anything else. The car must be in good order and roadworthy, but you do not need to spend any extra money on it for consumables like brake pads if the car is perfectly legal when you are handing it over.

  137. Hello, just before Christmas, my dad passed away unexpectedly. He had a PCP on a Kia Sportage. We are under the 50% for a VT but have been told we still can. (There is no estate to pay up to 50%). We have cancelled our direct debit with them for which they are aware. The car is still taxed and MOT’d. There have been a couple of occasions where we have had to use the car for an emergency. Would KIA try and charge us for using the car after the direct debit cancellation, our wouldn’t they know?

    • Hi Mark. As a rule, you shouldn’t drive the car as you are asking for an argument if anything goes wrong. If the contract has been cancelled, you effectively do not have the finance company’s permission to drive the car. They may or may not make a fuss about it, but you are better off not having that discussion.

      Have a read of our article about what happens to a finance agreement in the event of death as it may provide some additional info that is helpful.

  138. Hi there, when you go through voluntary termination of HP do you see any of your money back as you’ve been paying towards this car? or perhaps HP is just renting and therefore you see nothing back when you voluntary terminate. Sorry, but I don’t know very much about these things. Looking forward to your reply.

    • Hi Samantha. No, when you voluntarily terminate your agreement, you give the car back and that’s it (unless the finance company has genuine grounds to charge you any additional fees).

      HP is not renting, it is a purchase product (basically a form of mortgage). But you have borrowed (say) £20,000 and after you have paid back approx. £10,000 (depending on interest and deposit, etc.) you are ending the agreement and therefore have to return the car. The car will almost certainly be worth less than £10,000 by then, so the finance company is more likely to be losing out than the borrower as it will have a car worth less than the remaining debt, plus it will have costs associated with disposing of the vehicle.

  139. Hi this is fantastic advice thank you.
    Once we have notified the finance company and they have accepted it, is there a limit on how long they have to collect the vehicle? They are saying around 4 to six weeks which means we have to insure the vehicle again.

    • Hi Gavin. You are within your rights to give the company a reasonable deadline, and inform them that if the car is not collected by a given date that you will begin charging storage fees to cover your costs. Of course, they will never pay any such charges, but it often encourages them to move faster. The excellent legal advice site legalbeagles.info has more information about this, so I suggest paying them a visit.

  140. We’ve just ‘signed’ a VT agreement and subsequently found out about the mileage charge being unenforceable. Is it worth fighting the charge if we have signed to accept the finance companies VT terms?

    • Hi Jason. You’ll probably need to run your paperwork past a lawyer, who can advise whether or not you have signed your rights away and whether it’s worth fighting any charges.

  141. PCP deal sounds too goo to be true. Whats the catch.
    Just been to look at a fairly new car, Nice car low mileage etc etc.
    The catch is that the salesman said that if i took the PCP over 4 years to keep the repayments down, then I could trade up in 2 years time with no penalty.
    Is that right or am i missing something ?

    • Hi Kevin. It almost certainly is too good to be true.

      After two years of a four-year PCP, you will almost certainly have significant negative equity that will mean your finance settlement is much more than your car’s value. So you would therefore have a large financial penalty.

  142. Hi Stuart.

    My car finance is finished in April 2019
    It was 5 years so I’m well over the half way mark.

    The cars runs okay but I’m just wondering what is classed a wear and tear as the car is making a bit of a knocking noise and the air bag light is on.

    Assuming they will try and charge me for this


  143. I took out a PCP contract for 4 years on a Renault Clio from Evans Halshaw (financed by Renault Finance) in August 2016 with a mileage of 8000 miles per year (at the time it was appropriate for my circumstances). My circumstances have changed, I have a job where I am travelling 48 miles per day so I have already exceeded by mileage allowance. After telephoning Renault Finance to try and increase my mileage, they said they cannot increase it because at the time that was the contract I signed. They gave me a few options:
    – Pay the settlement fee now to purchase the car
    – Pay the settlement fee at the end of the 4 years to purchase the car
    – Hand back at the end of the contract and pay the excess mileage charge (80p per mile!)
    – Part exchange the car for another Renault or Nissan at the end of the contract
    – Re-fiance the final settlement fee at the end of contract and then own the car

    Do you have any advice on what would be the best option, please? I don’t want to pay the 80p per mileage excess fee at the end because that would bankrupt me. Do you think I would be able to end the contract now? I’d be happy to give the car back now and walk away and get a new car somewhere else but I don’t want to be charged for excess miles. The car is in excellent condition, it is just the mileage that is the problem.


    • Hi Bethany. Firstly, I don’t think that 80p per mile can possibly be correct. Check your contract, but it is much more likely to be 8p per mile (£80 per 1,000 miles).

      Secondly, we can’t tell you what the “best option” would be, because the answer to that question is different for every person – and in any case, that would constitute specific financial advice and we are not financial advisors so it would be illegal. Any of the above options – or none of them –  may be a suitable solution for you and your particular financial situation.

      The other option that they (unsurprisingly) have not told you about is voluntary termination, as described in this very article. You are probably not at the 50% VT point yet (the exact amount will be in your contract), but you can wait until you have reached that point or pay up to it now and then hand the car back. You can’t be charged excess mileage, although they will almost certainly try to.

    • Hi Stuart,

      Thanks for getting back to me! Yes, after double-checking my contract, it is 8p per mile, my mistake.

      VT is probably the best option for me… I have read this article many times but I just wanted it confirming that I could exercise the right to VT.

      Cheers :)

    • You can VT at any time, but given that you are only about 18 months into a 48-month PCP, you will still be a long way short of the VT amount right now. The exact number will be in your contract, but on a normal 48-month PCP agreement, you won’t normally hit that number until roughly 36 months (depends on a number of factors).

      To work out how much you have already paid, add up your initial deposit plus the monthly payments you have made so far (about 16, I guess). Then work out how much that leaves you short of the VT amount in your contract. You can then work out how much more you still need to pay to reach that amount. You can pay it all off at any point and VT the car immediately, or keep driving it and VT it once your monthly payments have brought you to that point sometime late this year or probably next year.

  144. thanks for getting back to me. It makes sense!
    However, I suppose the moral of the story here is that if it says ‘half the amount payable’, that doesn’t necessarily mean ‘halfway through the agreement’.

  145. Hello there,

    My wife and I are considering moving to Europe for work, my finance agreement says that I can only take the car away from the country for 28 days at a time. Seems like a no goer.

    It’s a 42 month agreement (3.5 years). I am currently in the 12th month.
    It says in the agreement that I ‘have the right to end this agreement’ ‘we will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £11,404.17’

    Now the cash price of the car was £21,100.
    I made an advanced payment of £3,500
    So the amount of credit is: £17,600
    The total charge of the credit is: £1,708.33
    That would bring me to £19,308.33

    How is £11,404.17 half that amount?

    On the 43rd month, if I wanted to keep the car (which I wouldn’t), I’d need to pay £7,076.25 – where does this figure come from?

    When I first read this, I just assumed I’d need to pay for half the term, then I could hand the car back, but I’m paying £291.24 per month.

    £291.24 x 42 = £12,232.08!

    Take away £11,404.17 leaves only £827.91. How is that half??? if I need to pay £11,404.17 to be able to walk away from the agreement, that is not 50%, that is nearly all of it!

    Can anyone explain this to me? Am I missing something? Maths were never my strong point!


    • Hi Antoin. You are calculating the numbers incorrectly.

      The total amount payable = price of car (£21,100) plus interest and fees (£1,708.33), which comes to £22,808.33. The VT point is half of this amount, which equals £11,404.17.

      You have paid £3,500 upfront, so you need to pay another £7,904.17 to reach the VT point. At £291.24 per month, you would reach this after 28 months. As of right now, you are presumably about £4,400 short of this mark. You can pay the £4,400ish to make up the difference and give the car back now if you like.

      The £7,076.25 is your balloon or guaranteed future value amount. Your finance agreement consists of 42 smaller payments of £291.24 per month plus a final payment of £7,076.25. If you prefer, you can give the car back after 42 months instead of paying the £7,076.25.

  146. Hi Stuart

    I have an interest-free PCP which makes the calculations a little easier.

    The full price of the car is £27,770 and the credit agreement states this comprises £23,000 credit and £4,700 advanced payment comprising my deposit and discount applied by the retailer.

    My question is this: can the whole of the £4,700 advanced payment be counted towards the 50% payment to qualify for VT or only the amount I have paid as deposit? The agreement states the payment for termination is £13,885, exactly half of the full price.



    • Hi Andy. Yes, any upfront payment (your deposit plus deposit contribution from dealer or finance company) counts towards the 50% VT point. This works in your favour, it it means you only have to repay £9,115 of your monthly payments instead of £11,500 (half of what you borrowed) if it wasn’t included.

  147. Hi Stuart

    I will be coming to 50% of my total payable in February, but have been advised by a Ford dealership that Ford Credit will charge me extra for not having a full service history? I understand it depreciates the cars value which I get, but wasn’t sure whether to go ahead with the VT?

    There was the last service in June 2015 and a small oil and filter change done by my dad in 2016 but didn’t sign or stamp book and also the service was done may 2017 but hasn’t been signed or stamped and this was done by a garage along with the MOT.

    I am struggling for repayments as having to take a new job with less income.

    Please if you could provide some information that would be great.

    Thank you

    • Hi Rebecca. It’s entirely likely that the finance company will try to charge you for not following the car’s service schedule. Whether they have any legal grounds to do so is very contentious.

      Legally, contractual clauses like servicing and excess mileage cannot be enforced as part of a VT, however there is a clause in the law that says that you have nothing to pay if “there are no damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”. The finance company can and will argue that failing to have the car serviced correctly means you have failed to take reasonable care of the car, and it’s certainly a reasonable argument.

  148. Hi Stuart i have found myself in a very tough situation as i have recently signed for a car on a PCP agreement but due to unforeseen circumstances can no longer afford to get the car i haven’t made a payment on the car yet just a 500 pound deposit is there anyway out of the agreement now or not?

    • You have a 14-day cooling-off period for the finance agreement, but that doesn’t cancel the vehicle purchase agreement. You can probably wriggle your way out of the car purchase, but the dealer will almost certainly keep your £500 deposit and they may well want to fight you over trying to pull out after signing the contract.

  149. Hi Stuart. I purchased a Chrysler Ypsilon in 2014 on PCP. Chrysler have disappeared and my car has no equity.
    In February 2018 I will have paid 50%. What i would like to know is should i wait till February and hand it back in and walk away (i am over mileage by 9000) or will I still be able to take the car in on January and trade it for a new motor that’s on the January sale (Liking the Fiat 500!)

    • Hi Kevin. You can VT the car at any time, but you will need to pay the balance to bring you up to the 50% point. So if you are going to save more on the new car than you are going to pay out by handing the car back early, then it may be a worthwhile move.

      If you part-exchange the car on a new one, you will probably find out that you have more negative equity than you expected and it may be better to VT the car instead (although you will almost certainly to fight the finance company over the excess mileage).

  150. Good afternoon Stuart.

    Have read almost all of the comments on here and am pinning high hopes on you being able to help me out.

    We are currently on our 4th Skoda and as I’m sure others have, the payments have crept up every time we’ve changed cars (wife’s fault!!!) and when going through our mortgage application earlier this year we both agreed that the £276 we currently pay for my wife’s Yeti was a little higher than we would really like! We have the car on a 3 1/2 year(40 month) PCP scheme and as with the previous 3 cars no intention of keeping the current one when the term expires, however!! Now the UK or rather the UK’s second hand car market has become a nation of Diesel hatters and when looking at changing the car a couple of months ago were horrified to see a £3.5k short fall even 2.5 year into the agreement (2.0 TDI!!!!). Although we didn’t take the plunge as the money tree was looking a little bare, one glimmer of hope offered by the dealer was that we were far enough into our agreement to VT the car and walk away!! A little surprised, I looked into the paperwork more and am struggling!!

    With an original cash price of £23,600 and £2,500 (and change) deposit, we had/have £21099.18 total credit over 40 months @ £276.22 a month. My simple logic being half the credit amount and divide by £276 and you get 38ish, so in theory, you could VT the car a month before the term finishes and as long as condition and mileage were OK, sidestep the shortfall between car value and outstanding credit at the time and walk away? Now the bit I can’t get my head around is that in the paperwork under “Termination, Your rights” its states “You have the right to end the agreement. You should do this by writing to the person you make the payments to. They will then be entitled to the return of the goods and to half the total payable amount under the agreement, that is £12,511.67. If you have already paid this or more and the vehicle is in reasonable condition then you will not have to pay any more.”

    My issue is that at £276 a month it takes you 45 months to reach this £12k stated value meaning you could never get to this number within your PCP term and certainly not after 28 or so months as the dealer in September this year led us to believe!!

    So the question is who’s right and when is the best time to try and jump ship and start afresh with a new deal, probably lease as we don’t want to keep the car??

    Bit of a ramble but hope you can impart your wisdom and help me out before my brain explodes or my wallet melts!!



    • Hi Simon. From what I can see, you and the dealer are both wrong. You haven’t accounted for your deposit counting towards your VT threshold, and the dealer appears not to have accounted for the deposit at all.

      If the VT amount is £12,511.67, then the Total Amount Payable must be £25,023.34 (The VT amount is half of the Total Amount Payable). This equals the price of the car plus all interest and fees. If the price of the car was £23,600, you are paying £1,423.34 in interest and fees, which sounds about right.

      If you paid £2,500 up front and you are paying £276.22 per month, then the VT point of £12,511.67 should be reached after 37 months. £2,500 initial payment + (37 x £276.22) = £12,720.14.

      Or you could VT before that and pay whatever is needed to bring you to exactly £12.511.67.

  151. Hi Sorry if this has already been asked but I am doing my VT with pca (Citroen Finance) I was wondering as I am handing it back after over 50% of the value reach would I be entitled to a refund of interest on the time the agreement was not active. As the Interest is based on the full cost of the payments over the direct debits and the one-off payment. Thus meaning I have paid more in Interest than I should have.

    Normally if you settle a Direct Debit i.e for insurance you are entitled to a refund of interest for the time the agreement is not used is this the same ?

    Hope that make sense.

    • Hi Mal. No, you are not entitled to a refund of interest on a VT as you are not settling the agreement and paying off what you owe. You are terminating the agreement and leaving the finance company to wear any loss.

  152. Hi Stuart

    Yesterday I went Into a car dealership not intending to buy a car but I got roped into the sales pitch and signed a contract to say I would buy the car but I have changed my mind I haven’t left a deposit I haven’t driven the car I haven’t taken the car from the show room but now they say they have taxed it and registered it in my name and I owe them the tax money even though I told them I didn’t want it any more just wondering what I can do

    • Hi Kate. If you have signed a contract then you are legally committing yourself to buying the car. However, in practical terms there is not a whole lot the dealer can do if they haven’t taken any of your money. Presumably, they registered the car immediately (if they have actually done so) because they want to count it against this month’s targets, although that’s not your problem.

      The dealer can threaten legal action or whatever they like, but ultimately it’s not really worth the time and hassle if you no longer want the car. They don’t have any of your money, so they can’t refuse to refund anything. If they have any common sense, they’ll rant at you for a bit for wasting their time and then move on.

  153. Hello,
    I have a hire purchase agreement on my car (I was told that it was a loan and not attached to the car, but I unfortunately have no way of proving this). I have paid 71% of my agreement. My garage has recently told me that my car has a lot of repairs – many things have broken all at once! – and the repairs far outweigh the cost of the car. I cannot afford to keep my repayments and buy a new car. Do you think I’d be able to do a voluntary termination? The car – other than the repairs that need doing – is in good condition and has been serviced regularly etc.
    Any help would be really appreciated as I really need to get a new car and can’t sell this one with £2700 odd left on finance!
    Thank you :)

    • Hi Holly. It’s probably worth getting a second opinion, as it’s very unusual for many things to break all at once unless there is a single cause.

      The car needs to be in good condition with no damage beyond wear and tear when you VT it, otherwise the finance company will have every opportunity to charge you whatever they think the repairs would cost. And they will almost certainly have a larger number in mind than you will.

  154. Hi Stuart, looking for advice if poss… my father has passed away and has pcp and private plate. He has paid over 50% and has low mileage and normal wear and tear. I will need to VT but just wondered how given we are not him (was thinking send from executors email along with will and death certificate?), how do we retain the private plate and should we do this after the VT has been submitted? (Fin agreement will be registered on private plate and will the V5), do the rules around VT change if it is due to a death?

  155. Dear Stuart,

    excellent post. I have some question I hope u may be able to answer.

    when they give the PCP loan the customer, the customer have some down payment. assuming the car price is 10K + 2K interest u get total deal of 12K. u put lets say 1.2K (10%) down payment.

    now lets assume I return the car after few months (not at the end of the contract), will I need to pay 6K minus the 1.2K I paid or in addition to the down payment?

    In addition, if assuming i have a protection of the car value lets say to not go below 8K but at the day i voluntarily return it the car value is 7.5K is there is any effect on me?


    • Hi Ben. If you settle the finance after a few months, you will owe whatever you borrowed (£8,800 based on your numbers above) plus the interest on that few months plus an early settlement fee, minus whatever you’ve already paid in monthly payments. For more information, have a read of our article about settling a PCP early.

      If you are returning the car at the end of the agreement and the car is worth less than the guaranteed future value (GFV), that’s not your problem – as long as you are under your mileage limit, the car is in good condition and you have complied with the servicing requirements. For more information, read our guide to PCP car finance.

  156. Hi Stuart
    We have a VW HP agreement which is over 50% paid and a year to run. However looking at the T & C document it notes that the right to terminate includes a provision that four-fifths of the total amount must be paid. Does this override the 50% rule as the HP contract including this term has been signed?
    Thanks in advance for your advice on this point

    • Hi Simon. If it’s a normal hire purchase agreement, it is regulated under the laws of the UK and you have the right to terminate after paying 50% of the total amount payable – and there should be a specific clause in the agreement that explains your rights in this regard. Not sure what the 80% bit refers to, but it is unlikely to be able to override the law.
      I’d suggest visiting legalbeagles.info for professional legal advice – they will be more familiar with specific contractual terms that may be relevant to your agreement.

  157. Hi Stuart
    My partner has purchased a car on finance and he has owned the car since November 2016 in June 2017 it broke down since then he called the finance and the garage company who advised he had no warranty and had to fix it himself. He has spent nearly £2000 at 4 different garages including BMW now after all the work they are saying he needs a new engine which will cost between 3-4k. we cannot afford this. He was advised by his finance company he can sell the car. which he did. the seller wanted proof that the car was ok to sell, when he called and asked for this in writing they are now saying his was misinformed and cannot sell it. the car does not start and has not been working since June. The finance is over 4 years. What can he do?

    • Hi Stacey. I’m surprised that anyone from the finance company would suggest that it was OK to sell the car – as you subsequently found out, it’s not OK.

      Anytime you buy a car without warranty, you are taking responsibility for any repair costs that may arise. You are also well outside the supported six-month timeframe for rejecting a car under the Consumer Rights Act. Unless you have very good evidence that the garage sold you a faulty vehicle, you’re stuck with the repair bills.

  158. Hi Stuart wondering if you could help me at all please, I have had my PCP car with Volkswagen around 5 months. circumstances have changed and I can no longer afford this car. I can make payments but it is definitely too much for me to afford (currently my partner is paying half) I want to end my contract early and they have told me I cannot do this, I know im in negative equity and I just really would like some advice if that’s ok

    • Hi Jade. If you’ve only had the car five months, there’s really no easy way to get out of your PCP. Your finance agreement will make no allowances for changing circumstances.

      You can surrender the vehicle to the finance company, but that won’t fix the problem. They will sell that car at auction to recover part of the debt, but they will still come after you for the negative equity (and it will probably be a lot of money).

  159. Thanks for getting back Stuart. I’ll try and see which auction the car goes to and maybe try and buy it from there if the price is ok.

  160. Hi Stuart thanks for your advice. I have just VT’d my SEAT diesel and it has been inspected and Is being collected in 2 days by a car auction company. I have nothing to pay and the reason I am VTing is that my GFW in March 2018 is 7430 although at the moment (Nov 2017) CAP value is 7000 and my settlement figure today is 8340 so I’m in negative equity. MY QUESTION is can I offer to buy back the car from the finance company at an auction price as this will potentially save the finance company money but I will have paid a lot less for my car which will now have positive equity, so I can part-ex it with a profit, if I so wish… or do I have to wait until I have posted the V5C form to DVLA before I call the finance company. In other words, does the finance company have to legally own 5he car before I can buy it back?

  161. I’ve had an Audi on lease for 3 years in April circumstances have changed and the payments are crippling us. The car has scratches on it. I don’t know what to do. I want to take the car back and walk away but do I need to wait until my 4-year contract is up. Also, do I deal with the car garage or can I just find my paperwork and deal with whoever my contact is with

    • Hi Stacey. You should be able to check your finance contract to work out whether you are eligible to carry out a voluntary termination, but if you are three years into a four-year PCP then you are probably either there or close. If it’s not a PCP and it’s a simple lease, you probably don’t have VT rights.

      The finance company is entitled to charge you for any damages beyond normal wear and tear. You can have the scratches repaired before terminating the contract, as it’s probably going to be cheaper than whatever the finance company will charge you.

      You need to deal with the finance company – it has nothing to do with the dealership. Once the dealer sells the car and payment is made, they no longer have anything to do with the matter.

  162. Hi Stuart,
    I bought my car from MONDIAL CARS on September ’17 and finance was arranged by them by MONEYBARN. Now I’m contemplating returning the car at next month, which will make it months that I’ve purchased as I seems to spend a lot on diesel because of my work distance and the car was seems to be highly overpriced at the time of purchased. Also, unfortunately there has been dropped in my work hours by my employer and this has significantly dropped my pay. I will find it difficult to keep up with my monthly repayment on the car. So, I have decided to return the car and get a smaller affordable car. Pls, what can I expect taking this step as I’ve got no clue and also scared. Thanks and keep up the good work. It’s very impressive.

    Looking forward to your response.


    • Hi Ola. If you have had the car for barely two months, then it is going to be very expensive to try and change it now, as you will almost certainly have a large amount of negative equity. Even if your fuel costs are higher than expected, you will still be spending thousands to save hundreds.

  163. Hi Stuart,

    I am trying to establish my VT point and it’s not what I thought. The purchase price of the car was £30,000. I paid £6000 deposit and had £24,000 on finance. The cost of credit is £4,203.60 plus £10 purchase fee and GFV of £11,200. The total cost of credit is shown as £28,213.60. They have listed the vt value as £17,106.80. Which is 50% of amount of credit (£24,000)+ cost of credit(£4213.60) + deposit(£6000) totalling £34213.60. If this is the case I passed the vt point at 32 months of 48 month pcp £6000 deposit plus 32x £354.45 = £17,342.40 (£354.45/month). If the 50% is relating only to the amount borrowed plus charges (excluding deposit) then this vt point would be the 40th month £28,213.60 /2 = £14,106.80 (40x £354.45 = £14,178). I’m currently in month 38 and not sure which is right. Thanks steve

    • Hi Steve. The Total Amount Payable does include your deposit, so the finance company’s numbers are correct. I agree it seems odd, but it is working in your favour so it’s good news!

  164. Hi Stuart, I bought a car from Evan Halshaw a year ago. I put down a deposit of £3000 and took out a loan with them for the remaining £2,500. The car has now failed its MOT due to several wear and tear issues. I am also about to be made redundant. I am considering a PCP, would the 50% be covered by the deposit I paid originally?

    Many thanks,

    • Hi Catherine. If you borrowed £2,500 for a £5,500 car, it’s highly unlikely it was a hire purchase so you probably won’t have voluntary termination rights. You will need to look at your contract – if you have VT rights then there will be a clause explaining them.

  165. Hello Stuart. My sister took out PCP on a used 63 plate Audi TT last year from Audi dealer. It’s a 3-year term she is nearly 50 percent through. The car is not running right and using a lot of oil. She is wondering about cancelling as the warranty was only 12 months and can not afford the repairs as its probably £££££. Can they blame her for the engine problems? It’s not really her fault she just gets in and drives it, and as the car won’t be fit for use we are quite worried. What are the options? Many thanks

    • Hi Eddy. If it’s the 2.0-litre turbo petrol engine, have a look on various Audi forums for advice as there is a known issue with that engine. There have been documented cases of Audi offering goodwill engine replacements, even if the car does not have a full Audi service history.

  166. Thanks Stuart,

    I realised they were separate companies when trying to VT the car as the garage weren’t interested, which makes complete sense.

    I’ll reply to the invoices via email to BMW and provide a PO Box address since I no longer reside in the UK and I very much doubt they would chase me in Australia, but of course they can try.

    Thanks, I appreciate the effort!


  167. Hi Stuart,

    I VT’d a BMW in September 2017 only because we were emigrating to Australia, which is where I live now.

    I’ve had a BMW from the same garage for over 8 years and always said we do between 20-25K miles per annum because we car share, only to find out when I VT’d the car that they said I was contracted to 8K per annum, you can imagine my shock! We always traded our car in and got a new one so they probably didn’t care too much until I needed to had the car back, lesson learned never assume they have your best interest at heart.

    Anyway, I’ve just had two invoices sent to me, one for just over £4K for milage and the other for £279 for a couple of scratches.

    All our BMW’s were well taken care of and were serviced at the same garage for 8 years and have the costs and receipts to prove it and believe me it was a costly exercise, but I wanted to ensure we looked after the cars.

    Anyway, when I VT’d the car I stated section 99 of the Consumer Credit Act, which was hghlightd by LegalBeagles here: http://www.legalbeagles.info/forums/showthread.php?77612-How-to-Voluntary-Terminate-a-HP-Agreement-*UPDATED*.

    The letter I got back from BMW requesting £4K for excess mileage stated subsection 2 of the CCA:

    “Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.”

    Which I also stated to them in my initial email to them. Now to me, the excess mileage was included in the contract that I clearly terminated under the CCA, surely they can’t pick and choose parts of their contract that remains in force or can be charged before I terminated it, which hasn’t happened anyway because I’d needed to have terminated it first for them to arrange collection?

    I now reside in Australia and they are sending letters to my old address, where do I stand and do I really need to pay this excess mileage charge?

    Why is it the case that when you hand the car back to get a new car that they don’t bother to charge you excess mileage, is it because they know they’ll make more than that back from you from the new car?

    Im not asking for legal advice here just your opinion ;-)

    Thanks, I look forward to your reply.


    • Hi Derek. Part-exchanging the car is different to handing the car back to the finance company or VTing it back to the finance company. A BMW dealer is not the same thing as BMW Finance – they are completely separate companies. When you part-exchange a vehicle, the dealer buys the car from you, pays off the finance company and takes care of any repairs before selling it onto the next customer.

      When you return the car to the finance company at the end of a contract or VTing it mid-contract, you are bypassing the dealer and dealing directly with the finance company. The finance company is less interested in your car’s value or saleability and more interested in whether you have discharged your contractual obligations.

      As you are VTing the car, they can’t enforce their excess mileage charges – no matter how much they insist that they can. The bill for damage is entirely negotiable, as the law only states that you are liable for any damage beyond normal wear and tear – but there’s no definition of what constitutes fair wear and tear, so it all comes down to how hard you’re prepared to argue it out with the finance company.

      There is almost certainly a target/reward scheme for their collections people based on how much money they can recoup from you, so they will chase you for as long it takes until you either pay up or they accept that you will never pay up.

  168. I am 2 1/2 years into a 4 year PCP and moving to Canada in a month. I have been told I need to pay £1k to get to 50% mark but can’t afford it, and won’t be able to pay my monthly payments from Canada. When I took out the car they said I can give it back after half the tarn (2 years) but obviously in the contract its the halfway mark. The car is worth no where near my settlement figure. What can I do? Thanks for all your help it’s amazing!

    • Hi Ellisa. Your finance agreement makes no provision for you wanting to leave the country halfway through your contract. You could try the Brexit argument of “I’m leaving and I’m not going to pay what I owe”, but it’s unlikely to work for you. If you need £1,000 to get to your VT point, then that’s what you’ll need to find.

    • Well, unless you have any kind of evidence that the salesperson has mis-sold the finance, you’re pretty much stuck with your agreement. The finance company may allow you to make overpayments without additional fees, so you can reduce your debt faster, or you can keep some money aside each month to cover the extra depreciation to pay off at a later date.

      If you’ve only had the car six months, you will currently be in the worst of the negative equity problem as the car has been depreciating faster than you are repaying it. This starts to slow down, and then once the rate of depreciation is less than what you are paying back, you start to reduce that deficit in the later part of the agreement.

  169. I am in need of some serious help, I have a car on finance that i have only had since March, I’m no where near the 50% mark but need to trade in the car ASAP as i am already 5300 miles over the 8000 mark limit PA, The salesman told me this after he put my contract through but didn’t listen when i told him my mileage is extremely high. So now im paying for a car that at any point could put me in debt, i cannot trade in as no garage will give me enough to cover the current finance cost as they are charging me almost double what the cars worth, i’m at a loss and do not know what to do, please help.

    Thanks Hannah

    • Hi Hannah. You should be able to contact the finance company and increase the mileage allowance (at extra cost, of course) to cover the additional depreciation. Most finance companies will allow this, although some won’t.

  170. My circumstances have changed since renewing my contract with BMW I had a new car 3months ago. Is there any way I can hand the car back with it being so new?
    Ive had BMW’s from new for last six years so this apply to anything

    Thanks leah

    • Hi Leah. Not normally – assuming that you have a PCP, you borrowed the money and now almost certainly have a car that’s worth considerably less than what you borrowed. If you have a lease (contract hire), then you have an agreement to rent the vehicle for three or four years.

      In either case, there’s no cheap way out three months into a new finance agreement.

  171. HI sort of understand your answer but would the deposit be included in the payments to reach 50%.
    example, £10,000 car £1,000 deposit paid.

    lets just say £15,000 is the total amount payable, to reach 50% consumer has to pay £7,500.

    he has made monthly payments equal to £6,500 would the deposit of £1,000 be included to reach the magical £7,500.

  172. Hi Stuart – I took out a PCP agreement when I purchased a new Skoda at the end of March this year. I have developed a back problem that means I am unable to drive a manual car. I am within the 1000 miles per month (12,000 pa) mileage and the car is in showroom condition still. I don’t know where to start with getting out of the payment plan. I paid a £6,500 deposit for the car which, with all the extras was worth about £28,000. I’d really appreciate your advice.

    • Hi Adaliza. There is no provision to end the agreement on medical grounds because the car no longer fits your needs, or because your needs have changed. Unfortunately, getting out of your agreement is going to be expensive.

      You can settle the agreement with the finance company and part-exchange the vehicle on a more suitable one, but you will almost certainly have some negative equity to deal with – even though you put in a significant amount up front.

  173. Hi Stuart,

    Have been looking online for some clarification regarding the excess mileage conditions and came across this article, which is one of the most helpful I’ve seen, so thank you!

    I have just put in a VT for my SEAT (my contract actually ends in October so I’m only ending it 1 month early).
    My contract states a total of 35,000 miles and by the time they collect it, I will have done approx 42,000 miles, and have said I will be charged at 7.2p per mile over, as per the contract.

    I know you’ve been asked this a million times but IS this enforceable?

    The SEAT salesman who advised me to do a VT rather than trade it in (so I can get another car on PCP as my current car is in negative equity) has said the car is in great condition, and shouldn’t have any issues as far as that’s concerned.

    Your advice is greatly appreciated.

    • If you’ve seen the previous million times this question has been asked, why do you think the answer is going to be any different this time? Nothing has changed.

  174. Update: Having registered on LegalBeagles and taken a look through some of the posts on there,
    particularly in relation to Mercedes Finance, it seem sthey have a pretty hard standpoint on Exc Mileage, and whether its payable or not, and seems I’ll be in for a fight if I expect to avoid it.
    To be honest, I’d assumed it would be payable on VT, until I found this, but it seems that the matter isnt as clear as the rules may indicate…….

    • Realistically, it should be enforceable. But the law doesn’t say that, partly because the law was written well before PCPs were anywhere near as popular as they are today.

  175. Actually, my MB Agreement staes in the very small print,
    12.1 “If the vehicle is returned to us (whether at the end of the period of hire or an earlier termination) we will calculate the Total Mileage travelled” etc…
    12.2 “You will pay us a charge at the rate stated in this agreement if and to the the extent that the Total Miles exceeds the allowed distance etc etc”

    – seems they are trying to indicate that they would still pursue an extra mileage cost, but if the Law says they can’t, should I ignore !?

  176. Very interesting article, and can I thank you, Stuart, for clearly taking so much effort to answer everyone so concisely, truly commendable!
    I’m currently considering a VT on my Mercedes C250, 3 yrs into a 4yr PCP. I was hoping to simply include it in a new PCP arrangement perhaps, but as I’m being told its circa £1500/2000 in Neg Eq, it wouldn’t make sense to include that amount in the new payments, pushing up the cost further. I’m aggrieved that MB has got its sums so wrong, hence why I’m considering the VT and then starting afresh.
    What I hadn’t realised was that Excess Mileage Charges can’t be enforced, that’s very interesting. I’d been assuming that I’d be responsible for the £7/800 of costs in that respect, but maybe as so many have found, they’ll try and charge me……
    I do have some reservations about VT’ing, and the effect it ‘may’ have going forward in getting future Car Finance tho, – do you hear of many that have been adversely affected in any way as a result?

    I’m about 8000miles over my 10k/yr PCP agreement, mainly as a result of the MB Dealer being less than ‘up front’ with what he had worked out the deal on, as I thought it was the usual 13k/yr I had been on before, – he clearly used the lower miles to get the figures down to tempt me, and was something I didnt realise until quite some trime after when I had to refer to my Agreement for something. Its clearly well hidden, as I have the agreement in hand at thos minute and still cant see the mileage figure easily…..but I doubt I’ll have any recourse now. ?

    • Hi Chris. It’s not unusual for you to be in negative equity before the end of the agreement – in theory, if the finance company has got its numbers exactly right then it should be in negative equity right up until the day the agreement ends. For more information, have a read of our article about settling a PCP early.

      Excess mileage is a hotly-disputed topic. If you are prepared to play hardball and stand your ground (politely, of course), then you will probably get your way. But it’s worth about £800 to the finance company, so they are unlikely to let it slide easily.

  177. Hi Stuart. I’m about to do a vt very soon and am under my scheduled mileage. Once I send the letter off how soon should I cancel my payments through the bank? Also my car has been serviced but by a mechanic who’s a friend, will I get charged for that? Thanks Ricky

    • Hi Ricky. Once you formally inform the finance company that you are claiming your right to VT, you are terminating the contract with immediate effect. Therefore, you are within your rights to switch off your direct debit. However, I’d suggest making sure that you’re up to date on all payments before you do.

      The finance company will almost certainly try to charge you for failing to have the car properly serviced by an authorised dealership, so you’ll have to argue that one out with them (like excess mileage, it’s a very grey area as to whether they can enforce this on a VT).

  178. Hi.

    I have sent in a termination letter from a template I found on legalbeagle stating they have 14 days to arrange pick up. What happens if they don’t contact me within the 14 days?

    • Hi David. You can start charging them storage, as long as you notify them that you will be doing so if they don’t collect the car by a certain date. I’ve not heard of this actually working, mind you…

  179. Hi Stuart,

    I am getting a new car in September, so I am looking to VT my car and have paid over 50%. BMW has said it will take approximately 3 weeks to collect the car. I don’t want to pay the 1 Sept payment so intend to serve notice of VT before then. BMW intends to email me a letter before I serve notice. It said said that it wants the log book sent with the notice by recorded delivery.

    Your advice above suggests the log book will be collected with the car. Given BMW want this at notice time, am I still able to drive the car after I serve notice and before BMW pick it up, even if I have sent it the log book?

    • Hi Les. Once you terminate the contract, all rights and obligations of the contract become void. Therefore you should not be driving the vehicle at all (although you should keep it insured until it is collected). You don’t need to fill in any of their forms to enact a VT, and you don’t need to wait for their letter. Personally I wouldn’t send the logbook in while I still have the car either.

  180. Hi – can you VT a car if it has missed the first years service?? I missed the first year on my fiat and am looking to VT. Have had a major service for the second one but didn’t know if they could refuse VA or charge me for voiding the warranty??

  181. Hi Stuart,

    I’m looking to VT my car shortly as I will have paid 50% by late August. The settlement figure is about £3k but the trade in value is £800. There are 2 issues I am considering;

    1) Could I include in my VT notification letter something along the line of “I believe you will not be able to achieve much more than £1000.00 when you dispose of the vehicle. I would be happy to purchase the vehicle from you for no more than £1300.”

    2) Looking over the loan agreement, I see that the car dealer lied on the credit proposal, they stated that the price paid for the car was £5000 with no deposit, whereas it was worth less, I’d put down over £1000 including the PX, but I was also paying for a comprehensive warranty and servicing deal. Should I bring this to the finance companies attention. I believe I was shafted by the dealer, so would like to drop them in it, if that is risk free to me.

    Thanks in advance

    • Hi Ewan. You can include a paragraph along those lines if you like, but it is unlikely that the finance company will respond. It will need to be in no way linked to your termination of the contract, and a separate offer.

      I assume that the cost of the warranty and servicing deal you paid for was equal to the deposit you put in. In that case, the paperwork will be correct. You can’t include warranties and insurance plans on your finance deal, so the numbers on the finance contract won’t necessarily line up neatly against the sales contract. Even if the numbers don’t add up, it’s probably a bit late to bring it to their attention now.

  182. fantastic article. i have a Renault Clio on PCP which ends in October after 4 years. We are thinking of VT soon. We have a paint transfer from another car hitting us on the back of the car, say around an inch wide. would this affect anything? no damage, just paint. also 5k miles over. from what i have read, this isn’t as bad as many others on the forum. also, just to clarify, do we send them the letter of intent, or can any of this be done over the phone?

    • Hi Liam. You need to formally terminate the agreement with the finance company in writing (email is fine).

      In terms of damage to the vehicle, the finance company will almost certainly charge you for paintwork repair. You can have this repaired yourself before VTing the car, which will probably be cheaper.

      In terms of the excess mileage, they will probably try and charge you since it will presumably be in the region of £500 according to your agreement.

  183. Hi Stuart

    This is a hard one for me, I have made 36 payments out of 48 on an MB. I want to VT because I now have a serious illness that affects mobility, basically I can’t use the car and need a car that is suitable. Is it possible to VT?

    • Hi Chris. You will need to check with the finance company how much you have paid off. After three years of a four-year PCP, you are probably close to the 50% mark. If you have an HP, you have probably already passed the 50% mark.

      If you haven’t paid off 50%, you can still VT the car but you will need to pay the difference to get you to the VT point. Depending on how much that amount is, it may still be worthwhile to do so if you are not able to use the car anyway.

  184. Hi Stuart, I can see you have been swamped with questions so will keep it brief, past the 50% stage (22 months out of 36 month contract) with Citroen, car inside is immaculate and outside there are scuffs to the front wheel’s alloys and I have done 19k miles and the allowance over 3 years was 21k.

    slightly off topic is the fact that I have already been at war with Citroen and won after 9 months when the clutch and flywheel went I was quoted £2.5k by local Citroen dealer, 3 months fighting they gave in, but I know they hate me, do you think this will impact the looking for evidence that the car isn’t in ‘reasonable condition’.

    has there been any instances of similar situations and ideas of how much it will cost and after I initiate VT is there no going back as in I hand it to local dealer can they say right you owe us £5k and then the fight ensues from there or am I able to say okay ill pay the final year??

    I bought the car from a different dealership as they offered a better price just FYI.

    Thanks in advance


    • Hi Joshua. The 50% point for voluntary termination isn’t based on time; it’s based on Total Amount Payable and includes the final balloon. So it’s likely that you haven’t reached this point after 22 months of a 36-month PCP.

      If you do initiate a VT, then it is generally irreversible. Once you notify the finance company in writing that you are VTing the car, you have ended your contract.

      The finance company and the dealership are completely separate entities, so there’s no reason for any warranty issues to prejudice the vehicle inspection when you VT the car.

  185. Hi Stuart
    Hi took a car in finance pcp in January 2017 the seller never told me about the conditions. And when I asked him if I could give the car back in case I lost the job he said was fine. Now I lost my job and I told them u need to give the car back the told me I need to contact the finance company black horse. I did and they told me u need to pay the liability which is a lot of money. I feel like I been ripped off they never told me this. I do t know what to do now. Thanks

  186. Hi Stuart,
    I used the VT to hand back my Mercedes early to Mercedes Benz finance. Didn’t have to pay a thing as I had paid over 50%.
    The car was in good condition also.
    I was down for doing 10,000 miles a year.
    I received a letter today saying I’m being charged for excess mileage.
    Went over my amount by 5808 miles. Is this something they would likely “aggressively ” try get back? Or should I just not contact them and ignore it? They said I need to pay £627 within the next 30 days.

    Many thanks


    • Hi Danny. As you will have read above, it’s a grey area. Ignoring the finance company is probably not the best bet, as they will automatically move to engage a collections agent if you don’t respond.

      Your best bet is to contact them and make it clear that you know your rights and that they can’t enforce any excess mileage charges. After that, it’s a question of who backs down first.

  187. Its ok saying its wrong to take advantage but when the way a PCP works is not explained correctly and is , in effect, miss sold then the finance companies only have themselves to blame. I was told by skoda that at some point there would be equity in my car and I could swap cars early and use the balance on my current vehicle as a deposit. This is crap and simply a lie. If you are paying depreciation the vehicle will always be in negative equity, even when the GMFV is due. I have calculated that, at current usage, I shall have to pay £1750 in excess mileage by the end of my agreement. I have no issues with terminating early as, if they had been honest, I would not have financed this way

  188. Hi – do we have the same rights if the agreement is in the name of a Limited Company?
    we want to voluntary terminate Hp agreement on a car – the car is not a company car but the agreement is in the company name and payments go through as a director loan.

    • Hi Jayne. The Consumer Credit Act (which provides for VTs and other rights) is specifically aimed at private buyers. If you are a business purchaser, you don’t have the same rights.

      You will need to look at your finance agreement to see what it spells out – if you have VT rights, they should be specifically listed in the contract.

  189. This article is brilliant – I’ve heard so many myths and theories on VT, great to get a firm standpoint on it. I’m currently looking to sell a car which is still under PCP (change in circumstances means we needed two cars, and existing car wasn’t suitable), which I haven’t had a lot of interest for, despite “””pricing to sell”””.

    It’s very helpful to know this is available as a fall-back option if the car doesn’t sell. Interesting to read your closing my comments – my father has just financed a new car and was instructed by the dealer to deliberately under-disclose the mileage and then do a VT at the end of the agreement..!!

  190. Hi Stuart,

    I took a 4 year PCP out with Mercedes 2 years gone in May. I am under the milage quoted and was wondering if I hand the car back, can I walk away?

    • Hi Matthew. The VT point is 50% of the total amount payable, not 50% of the term. Typically on a four-year PCP, this doesn’t happen until after about three years.

  191. Hi Stuart – I have just been on the phone to my finance company who I am terminating with early – by only 2 months tho – and they have asked me to send a letter which I have done via email there, they said that I might have to take the car to the auction place which is in Lanarkshire, Scotland. I stay in Perthshire which is a good 2 hour drive away from Lanarkshire. Is this something that I should have to do? I don’t think it’s correct really and it’s just been said to make me change my mind. They also said that I would have a pack sent out to me which I would have to sign but reading up on these comments its clear that I shouldn’t have to sign them, but what happens if you refuse to sign them? can they hold up the process? I want to have this done and dusted before my next payment at the end of this month. is there anything that I can send them to prove my rights

    • Hi Laura. Collection/return is a grey area, so you can argue it with the finance company or just accept their location. You don’t have to sign any of their forms; once you formally voluntarily terminate the agreement, you have ended the contract and are not liable for any further monthly payments. You can and should sign the vehicle inspection report if you agree with it, and make any amendments if you disagree with it – then sign it.
      The finance company can either make life easy or difficult, and there’s not much you can do about that.

  192. Hi, if I do a VT, in my contract it says after paying 50% I can VT at any time with no extra cost. Will I need to pay the 2 weeks of the month I have had it?

    • Hi Kayleigh. You have to be up to date with your payments, so in theory you should be able to VT any time before your next payment is due (as long as the finance company has received your VT notice before your next payment is due). I certainly haven’t heard of a finance company trying to bill a customer for a pro-rata monthly payment on a VT.

  193. Good afternoon Stuart having taken out a Mercedes PCP 6 months ago the service is now due however they are saying it’s going to be around £700 this time then £200 for the next one the first service seems rather steep to me and they won’t explain why they just say its a major service that’s why it’s more. We weren’t told about this price when taking out the lease and nowhere in the paperwork does it state three times the price for a major service. They are also telling us if we even go to another garage to get a quotation the warranty will be void will this void the warranty how does warranty even effect us if its a PCP any advise would be grateful.


  194. Hi Stuart. I’m looking in to canceling my finance contract, I’ve only had the vehicle since late November and I have been back and forth to the garage 8/9 times now. The garage I bought the car from have out right said that there’s nothing they can do and are basically refusing to do anymore. It is a Fiat 500 and the fault is that the radio keeps crackling and losing signal. Apparently this is a known fault with FIAT cars. With my car still being under warranty, am I entitled to cancel the contract?

    • Hi Grace. I don’t think you’ll have much chance of rejecting the car and cancelling your finance contract because of poor radio reception. The car itself is not faulty, and the radio is not going to be considered essential to the vehicle’s operation.

  195. Hi Stuart I have a question wondering if you could help.
    I just startes a PCP on the 31/03/17 from Infiniti and have been really happy with everything, finances have also been fine however just 2 months in and I have accepted a job overseas therefore will not be in the country. What options do I have?

  196. Hi, I purchased my car Renault Megane Gt Line under 2 years ago on PCP (3/4 year deal), within that time I have had problem after problem with the product itself. I have had 5 courtesy cars and the service has been awful. At this stage I would like to get a new car completely wither I stay with this company or not is another question. Is there any way I am able to get out of this contract?

  197. Hi Stuart
    So I have a car from new on PCP I currently owe £11,000 the car is still worth around £7000, I have done 31,000miles in 26months out of 32,000mile allowance over 4years, I have a few curb scratches on my front alloy and a scratch on the rear wheel arch when it seems someone has clipped my car, nothing T-Cut hasn’t solved. Would it be possible for me to VT and if so what costs can they put on me?

    • Edit*
      I need to pay £11,480
      My remaining balance is £10,145
      Car is valued at £7,200

      So I’ve paid £1,500
      Car is worth £7,200
      Total paid back off finance would be £8,700 when I return the car?

    • Hi Joshua. Your finance agreement should set out exactly what the VT point is. You’ll need to refer to this, as the numbers you have provided are not particularly clear. Your car’s current value is irrelevant to VT calculations; it’s simply whether you have paid back 50% of the total amount payable.
      The finance company will almost certainly try to chase you for excess mileage. As for the alloy wheel damage and scratches, that’s a matter of negotiation – there’s no legal definition of “normal wear and tear”.

  198. I’ve just voluntary terminated my contract deal with the car finance company and I told them they need to pick it up by next week because I will be taking my insurance off it and putting it on to a new one. I have paid 50% of it off and missed no payments. I’m given it back because the car was already faulty and I was lied to about the cars failed MOTs from it’s previous owners. Fowlers finance are the moto traders and total con artists too. I have the log book and it’s registered in my name but they are the legal owners of course. They have told me I need to sign paper work first to say it’s been voluntary terminated and what do I do with the log book? What do I do if they don’t pick the car up by the date I have given them? Sown it I’m guessing.

    • You can’t SORN it and you can’t cancel the insurance while the car is still in your possession.

      You are not legally required to fill in any of their paperwork, and consumer legal experts legalbeagles.info recommend that you don’t fill in anything – however, you can sign the inspection report if you agree with the details of the inspection.

      You can advise the finance company that if the vehicle is not collected by a reasonable date, you will start charging for storage and insurance costs. They may ask you to deliver the car to a nominated facility, which they are allowed to do as long as the distance is considered “reasonable” (and there is no legal definition of reasonable). This is fair since you are the one cancelling the contract, however they can’t expect you drive 100 miles to return the car.

  199. Hi Stuart i had a 3yr contract through vauxhall as i had a new car for my mother to get in n out easliy i have had it since 2015 Aug but recently had a change of circumstance now im struggling to pay my car had a slight dent to it as well dont know what to do ?

    • Hi Craig. If it’s a three-year PCP then you may or may not have reached your VT point by now (but it’s unlikely). Vauxhall Finance should be able to tell you if you have reached it or how far you have to go.

      If you can’t VT the car, you will need to work out whether you can manage your finances to keep paying it. If not, you can sell the car but you’ll probably not get enough to cover the finance settlement – so you’d need to find the difference from somewhere.

      Finance contracts don’t have a provision for change of circumstances. You can try speaking to the finance company to see if they can offer alternative terms that ease your cashflow (although it would probably cost more overall). They may be able to help, although they are not obliged to.

  200. Hi, seems to me in my experience that the 50% rule is not worth the paper its written on unless I still do not understand how the amount is calculated. Ever since I can remember, the guaranteed future value of every car I have bought on PCP is always seems to end up as 50% of the list price, so I will never reach 50% of what I owe until the end of the agreement and all monthly payments have been made. Have I got this wrong and I do not take into account the balloon. Just curious as the 50% rule is banded around as if its somewhat useful for consumers. Maybe I need to buy a different make of car to get the 50% safety net?

    • Hi Jeff. It depends on the vehicle you are choosing, the term taken and the annual mileage. Don’t forget to include your deposit, which counts towards the total amount payable. It is rare these days to have a balloon/GMFV that is more than half the total amount payable unless you have a short term (ie – less than three years) with a low annual mileage on a car with very good resale value.

  201. Hi Stuart, I am currently able to VT even though the 50% would be completely paid up in October. I am able to pay the difference so to speak in advance to terminate. My main concern however is this the milages, which is contractually 15,000 per year.

    I am currently at 45,000 which is what it should be in October! So I am in excess, if I VT now is there a chance that I could be charged the excess milage now even though I am paying up until October as per the contract or should I leave the car on the drive until October gaining no milages and be 100% of no excess miles (the impractical option)?


    • Hi Jo. As the article points out, excess mileage is a disputed aspect of voluntary termination. If you stick to your guns, despite any assertions to the contrary from the finance company, you should be fine to VT the car now.

  202. Hi Stuart, I bought my Vauxhall astra on finance with Close motor finance 2 years ago to be repayed over 3 years. Over the period I have had the car it has cost me an arm and a leg in repairs, over and above normal servicing and has clearly been unfit for purpose. Now the gear box oil cooler seals have blown rendering the car unusable yet again. The car is an 07 plate and has only done 54,000miles. The garage tell me that the cost of repair will be in the region of £2,500. Am I legally allowed to hand the vehicle back to the finance company as I have paid more than 50%of the payments and the vehicle is and has been unfit for purpose from approximately 3 months after purchase. It has passed it’s M.O.T.s first time every time with no advisories proving that the vehicle has been maintained correctly and the mileage is low.

    • Hi William. VT may be an option if you have repaid more than 50% of the Total Amount Payable (not necessarily the same as making 50% of the payments, depending on the type of finance), assuming you have an agreement that provides for VT. However, the car will have to be working properly at the point you hand it over or you will end up with a bill for the repairs.

  203. Can a finance company (Advantage) charge me for picking up a motorbike that i have VTd …. i owe nothing as in an email they say have paid half but they are asking for me to pay £80 for a pick up service …..is this normal ?

    • Hi Chris. Normally you would be expected to deliver the vehicle to their nominated destination, as long as it is within a reasonable distance. Given that you’re the one cancelling the contract, you should expect to be responsible for either returning the bike or paying for it to be collected.

  204. Would I be able to start a new insurance policy now then cancel once the car has been given back to finance company?

  205. Hi there,

    I am voluntary terminating my agreement due to moving to London and not needing my car anymore. Due to it not being used for the last few months I have SORNED the car and it has been parked on our drive the last 4 months. On the voluntary termination agreement it stipulates that the car must be taxed and insured in order for the agency to collect the car.

    I have looked into simply insuring the car for one day (the day that will be arranged for pick up) but would this suffice or does there need to a completely new insurance policy set up?

    Thanks in advance

    • Your finance agreement will almost certainly have a clause in there stating that the car must be kept fully comprehensively insured at all times. You are asking for trouble in not having it insured at the moment, even if it is declared SORN.

  206. Hiya,

    I am voluntary terminating my agreement with PSA finance. I had mileage of 30,000 over the three years. They are claiming that, as I have used 27000 and have 4 months remaining, they can charge me pro-rata for the fact I have overused my allowance for the year. They are basically saying I should have drove my car 830ish miles a month and I have been doing approximately 875. Usually my mileage levels off in summer but I won’t have that on my side this year.

    Is this something which they can charge for? It seems unfair as I am still handing back the car with what I believe to be a fair amount mileage.

    I have had my termination letter sent out but am reluctant to sign it now after reading this page and will be writing my own letter.

    Any help on this matter would be greatly appreciated.


    • Hi Becca. As you can read in this post above, excess mileage is a disputed area. Looking at the numbers involved, there’s no great amount to be gained by the finance company pursuing the matter, so you shouldn’t have too much resistance if you simply make it clear that you will not be paying anything for excess mileage.

  207. Hi Stuart – my finance agreement has a table laying out the various charges – so price of the car (A), less deposit paid(B) to give the amount of credit (C, calculated as A-B). It then shows the total charge for credit, i.e. interest & fees (D) to give something described as the “Repayment Balance” (E, calculated as C+D). The next bit is how this relates to a VT payment. It has a final figure called the “Total Amount Payable” (F, calculated as A+D). It is 50% of this last figure, F, that is shown as the VT amount. Why isn’t it 50% of the repayment balance, E ? I’ve paid the deposit so surely that should be factored in and therefore the figure E used rather than F ? Confused !

    • Hi Dan. Yes, their numbers are correct and that is how VT is calculated. This works in your favour, as your deposit is taken into consideration when calculating the VT amount.

  208. Thanks for the reply. I simply cannot afford the payments Stuart. And Im pretty stuck and need to do something. What would you advise ??

    • The first thing you should do is contact the finance company and explain your situation. Putting this off or not telling them will generally only make your life harder. There is no easy answer and you may not be able to avoid ending up with an adverse credit history if you default on the loan.

  209. Hi. I have a mercedes I bought in September on pcp. My circumstances have changed and I need to get out of the finance agreement and return the car. Its currently in negative equity. How do I do this without gaining a black mark on my credit score?

    • Hi Ant. Your finance agreement will not have a provision for changed circumstances and returning the car. There is no provision to “get out of the finance agreement”; it’s a 3-4 year commitment. You can contact the finance company and ask them about making alternative payment arrangements if you are struggling to make your repayments, but they are not under any obligation to help you.


  211. I took the car to the dealer for a service less than three weeks ago and mentioned that the over heating light came on, the suggested it was the coolant that needed changing. I had this don’t and now less than 3 weeks on the car has water all over the floor and overheats.

  212. HI I took a car out on pcp and am in to my last year. I can either pay the ballon payment or hand the car back. My concern is that the car has been in and out of the garage for repairs at my cost and today the car cut out and overheated. it needs s new raider costing nearly £400! Can i hand the car back or can they swap it for me as i am still making the monthly payments and have until Jan 18 before I can hand the car back?

    • Hi Tracey. You can’t simply swap it for another car and carry on under the same contract; you have to conclude your current finance agreement before you can start another one. If your car is not under warranty, you’ll probably have to foot the bill for any repairs.

      You can try selling or part-exchanging the car in its current condition, but there’s no guarantee you’ll be financially any better off than paying for the radiator repair and keeping the car until January.

  213. That’s fine Stuart, I have managed to ring the finance company and sorted out the confusion. I initially phoned them to request a VT figure couple of weeks ago, they then sent me a letter saying I am in a position to VT as I have paid over the half amount. According to your advice in the article, I believe I do not have to sign any papers that they sent me (correct me if i am wrong please). What do I now tell them?

  214. Hi Stuart, I am coming up to the half way period of my finance with GMAC. In the initial letter of VT do I need to notify them of the mileage the car has done? I got the below template from legalbeagles as you suggested.

    ” Dear Sir / Madam,


    Agreement number:

    I am writing to notify you that I wish to invoke my statutory right under section 99 of the Consumer Credit Act 1974 and hereby give you notice that the agreement is terminated effective immediately from the date of this letter. Please confirm by return acknowledgement of this letter and to make arrangements for collection of the vehicle. The condition of the car is noted as being in a reasonable condition for its age and photographic evidence has been taken in the event of any future dispute as to the condition of the vehicle. You will be aware that the Consumer Credit Act limits my liability to half of the total amount payable under the agreement but excludes any sum payable as a penalty, compensation or damages for a breach of the terms of the agreement. Such terms imposed are inconsistent with my rights under the Act and are therefore deemed void and unenforceable. The vehicle is now available for collection and I would be grateful if you could contact me on [NUMBER] to arrange a suitable time within the next 14 days.

    Yours faithfully,
    [NAME] “

    • Hi Anoop. No, you don’t need to notify the finance company of the mileage; they will ask for it soon enough.

      Also, please note that the VT point is half of the total amount payable, not the halfway period of your agreement. Usually you are still well below the VT threshold halfway through the agreement, but it will depend on the type of agreement and how it was configured.

    • Hi Stuart, thank you for your reply. Luckily half of the total amount payable has come up on my halfway period as it was an interest free agreement. Please may I contact you if I need any further help? Thanks once again and have a good day.

    • Hi Stuart, is there a private email I can email you on with some figures? I just want to remain confidential if that’s okay with the numbers. There is some confusion with the ‘half of the total amount payable’ and ‘total amount of the finance’. Hope you can help, thank you.

    • No, we don’t do private consultation, and would not be allowed to do so under FCA rules anyway. All finance information provided is of a general nature for anybody to read, and not specific to your case.

  215. hi stuart I’ve just recently lost my job i have a 3 year pcp plan which I’ve being paying money for a year now can i phone mercedes to tell them to take the car back as i can’t afford the payment nomore without my name being black listed or being refused credit elsewhere or even have charges to pay

    • Hi Trevor. You can and should contact the finance company to explain your situation, but they are not obliged to alter the agreement to help you out.

      There is no provision in your agreement to cancel the agreement because of financial hardship for any reason. You may be able to voluntarily terminate the contract, depending on your position, but the finance company is not obliged (and not likely) to help you out.

  216. hi
    i have my car on pcp which is due back to citreon sept 2017. that will have been 3 years so i take it im well over the 50% mark. i was entitled to 18,000 miles for the 3 years and im on 19,500 now, so 1500 over the 18000.
    is your advice not to sign any documents and literally just send a letter to say i want to VT?
    also im thinking maybe 1 or 2 of my tyres maybe on the boarder line of legally need replacing. the last thing i want is for them to collect the car and say it needs 2 new tyres and charge ridiculous prices for a tyre. but if i dont sign any forms am i not legally obliged to pay for new tyres?


    • Hi Danny. We don’t offer advice as to what you should do (and we would not be allowed to if we wanted to); all we can do is explain how the system works so you can determine the best path for yourself.

      You will need to check your finance agreement to find out whether you have reached your 50% VT point – it will depend on the car’s balloon/GMFV so you may or may not have hit that point yet.

      Your car must be legal and roadworthy, and that applies to your tyres. They don’t need to be new but they do need to be legal. If the tread is below the legal limit when you hand over the car, the finance company will almost certainly charge you for new tyres. Refusing to sign any forms will not change anything in this regard; if the tyres are illegal, they will bill you and they are entitled to do so.

      To execute a VT, you do not need to fill in their forms or ‘information packs’ or similar. You simply need to write to the finance company and advise that you are exercising your right to voluntarily terminate the agreement as set out in the contract.

    • thanks for the reply stuart..
      i have confimred with them today that ive paid £2000 more after the point i was entitled to a VT…
      my issue is if i dont sign the forms then will they still bother to come and collect the car? or will they wait until ive signed them and sent them back?

      another issue ive come across today is my GAP insurance. when i took out gap insurance with citreon I was told by the sales man that my gap insurance fee would be included in my monthly payments…ive phoned up today to process the VT and they have said that i need to pay £279 to repay the remaining gap insurance on the vehicle!!!!!!!! im fuming!!!

      the way they have done it is when i took out the GAP insurance back in sept 2014, citreon finance have paid Car Care Plan (the GAP insurance company) the full £499 gap insurance for the 3 years in one go and now citreon wants the remaining back that hasnt been paid as im getting rid of the car before the 3 years! i was never told that this is how they work it. i was led to believe that i pay my gap insurance every month as part of my payment and thats it!

      Any thoughts on this?

  217. Hi Stuart,

    I have taken out a Mercedes C220 on PCP (3 years / 15,000 miles) in July 2015. The car price including finance was around the £36k mark. The balloon payment after 3 years was set at circa £18k. As my circumstances changed at the end of last year (lost job / new job) I have contacted Mercedes Benz finance to see if I could re negotiate the deal for lower monthly payments. Their answer was “tough love” stays as it is. With help from family I have managed to keep up with the payments for now but its not the way forward and I want to return the car. I have read through this article and a lot of the comments and followed the instruction from LegalBeagles and sent Mercedes Benz finance a letter for voluntary termination. Today I have received a letter from them accepting the voluntary termination however on the 50/50 rule they stating that I owe them £8,630 as shortfall?

    Car price: 36,831.76 (inc. interest)
    Balloon payment: £18,000.00 (guaranteed car value after 3 years if kept within reasons and no excess mileage)

    I have so far paid £9,785.88 which in my calculations is more then half?

    Am I right in thinking that I shouldn’t be paying the aforementioned £8,630 and could return the vehicle?


    • Hi Lewis. No, your calculations are wrong and the finance company’s are correct. You can’t deduct the balloon; it’s money that is still owed. If you were to run the contract to its natural conclusion, you would either give the car back or pay off the balloon to settle the finance.

      If the Total Amount Payable is £36,831.76, then the VT point should be £18,415.88 – which is exactly £8,630 more than you have paid so far.

  218. I have also read my contract and it says that I can only return the goods if I’ve paid over 50% and have taken ‘REASONABLE CARE’…. what does reasonable care mean ??

    • Hi Chris. There is no legal definition of reasonable care; it’s simply a matter of negotiation. If you can’t resolve it between yourselves, you can always take it to court for a judge to decide.

      And yes, the finance company will almost certainly charge you for a missed service.

  219. Hi. I’m currently going through VT, I’ve had people come to look at my car to assess scratches etc, the car is only an 08 plate and most of the scratches and dents were already there when I bought it. If they come back with an invoice do I have the right to refuse to pay or am I legally abliged to pay ? Also is it legal for them to charge you for missing a service on the car ?


  220. Hi Stuart. I am only 6 months into my PCP with Nissan. I need to hand the car back as i have lost my job, i am unable to VT the car back, where do i stand if anywhere at all? Thanks

  221. Hi Stuart  TCE, I find myself in a slightly confusing situation, 11 months ago I part exchanged my X3 in for a New X4 from a BMW main dealer, the deal at he time was a PCP Lease of which my X3 made up for £14k of the purchase price of the new car, I told the salesperson my average mileage was around 10 to 12k per year, but when I got the paper work he had changed this to 8k, when I asked him he said to get the monthly figure to where I wanted it to be he’d changed it, and not to worry about the extra mileage and go and enjoy the car! now after 11 months I find that the X4 is not the car for me and want to change it for an X3, but perhaps change over to a Hire Purchase agreement from PCP, how do I stand on this change over?

    • Hi Paul. If you have had the car for less than a year, the chances are you will have a substantial amount of negative equity. So you will probably need a few thousand pounds to clear that before you can even start to think about your next car. For more information, have a read of our article on settling your PCP early.

      A hire purchase will cost you considerably more per month because you are paying off the whole car instead of just the predicted depreciation.

  222. Hi Stuart, Yes I went to get another car and the amount owed to the offered figure for my car shot the payments right up. If I pay £519 I can give the car back which means car to buy will be a straight buy and bring payments back to normal. Would the dealer pay the £519 for me to return the car in the deal?

    • Sorry, I guess you mean that you are £519 short of being able to VT the car. No, another dealer will not be able to get involved in that; you will have to do that yourself.

      The settlement amount on your car will probably be considerably more than £519 plus its current value. By VTing the car, you will be avoiding the negative equity you will currently have.

    • Yes, Correct Stuart. Okay so dealer cannot get involved. Currently my car is owing £6020. Dealers offering £4800ish , so to get a new car takes payments up to cover existing finance. I have spoken to my Finance company and they said I can pay £519 currently and hand car back. Which then leaves me free to purchase another car. Is this correct or does it leave a negative mark on my credit file? I dont see why as could hand car back in 3 payments time and if I pay it off , well I have paid it off so cant see a problem?

    • You can pay £519 to voluntarily terminate now, or make another three monthly payments and terminate then. It should work out to the same thing. Voluntary termination is your legal right, so it will not negatively affect your credit score or affect your ability to get finance elsewhere. The same finance company may choose not to finance you again, however (since you are walking away from your contract and costing them money, and there’s nothing they can do about it).

      If you pay it off, it’s your car. Either way, the finance agreement will be concluded.

  223. Hi,
    I am currently in a 42 month pcp and am needing to get a bigger car. I have been told I can wait till June or pay £519 to give car back. Now, if I go to another dealer, would they pay the £519 off the pcp if I buy a car off them? Meaning, would they fit it into the deal and give me the money to pay it off or do I have to wait?

    • Hi Stuart. If you want to buy another car, the dealer will settle your outstanding finance as part of the part-exchange process. If that means that they cover whatever you still owe (or more), great. If they value your car at less than what you still owe (which includes the balloon/GMFV amount), then you are liable for the difference.

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

  224. Hi Stuart,

    I’m about to do a VT and hand my VW Polo back to the dealership. The car is in good condition with a full service history however the next service and MOT is due on 4 March. If I hand my car back to VW before 4 March, is it their responsibility to conduct the service and MOT? I am worried that the inspection won’t be carried out until after 4 March (even though I will have handed it back before then) and that I’ll be penalised.

    Further, I have lost a spare key which I accept responsibility for. Will inspectors accept a replacement made by a company like Timpsons, or will the replacement key have to be made by VW?


    • Hi Euan. If you have written to terminate the agreement, then you can legitimately argue that servicing and MOT due after that date is not your problem.

      If the replacement key is a like-for-like replacement, it should not matter if it was not supplied by Volkswagen. However, the key issue (sorry, pardon the pun) is whether or not the Timpsons key is exactly the same as that supplied by a VW dealer. Of course, the inspector may not even notice or care, as long as it works. The finance company will not be inspecting the car themselves; it will be outsourced to an auction house, who will inspect the vehicle and then dispose of it via trade or public auction.

  225. A slightly unusual question and not one I can find an answer to: I’ve started a VT process but on reflection I don’t want to go ahead with it. I’ve had a letter from Hyundai, and they want me to make an appointment for collection (and pay a £70 collection fee). Can I back out and continue with my finance agreement?

    • Hi Jeremy. Once you write to the finance company to voluntarily terminate the agreement, you have ended the contract. You can contact the finance company and tell them that you have changed your mind, but they are not obliged to go along with it. They may well be happy to, as it is probably in their best interests, but that’s not a guarantee that they will.

  226. Hi Stuart
    I’m handing back a Citroen after paying 50 % of the finance. They are saying I must pay £250 to cover the early termination of the gap insurance which was loaded on to the finance. This was not explained when I signed the deal. Do I have any rights to refuse to pay?

    • Hi Joe. It’s a bit dubious and unclear. On one hand, you can’t VT an insurance product; on the other hand, you should be able to hold the finance company to the VT amount in your contract since that’s what the contract says.

  227. Hi Stuart.

    I’ve had a lease BMW for the last 2 years and it’s due to be sent back this week. I am 25,000 miles over the agreed limited of 10,000 miles a year.

    What would you suggest if anything, I can do to try and void the excess mileage cost or reduce the bill on arrival?

    Many thanks for your time on this one.

    • Hi Morgan. If your finance has come to the end of the agreement and the car is being handed back to the finance company, they will definitely charge you for the excess mileage and they are perfectly entitled to do so.

  228. Hi Stuart, my father purchased a vehicle and is 5 paymenst ( approx £1300 ) off of the 50% figure for a VT. Only problem is he is no longer allowed to drive as he has been diagnosed with dimentia.He was previously a courier so he has been forced into retirement on very little income following this diagnosis. Can medical circumstances be brought into the reason for the VT or will tehy insist on that £1300 being paid despite the fact he has virtually no income?

    • Hi Mel. There are usually no provisions for medical circumstances to be used to cancel a finance contract, so you are likely to have to pay the outstanding £1,300 to VT the vehicle.

  229. 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.

  230. 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

  231. 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.

  232. 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.

  233. 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…..my 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.

  234. 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.

  235. 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 pay