Can you clear car finance early?

If you would like to pay off your finance early, you will need to contact your lender to obtain a settlement amount. This amount includes any early repayment fees you may incur in the process of clearing your finance. Lenders will determine these fees based on the amount owed to them.

My car is on finance and I can’t afford it

It is not uncommon for people to enter into a PCP agreement to purchase a car, but then their financial situation changes, causing them to no longer be able to afford the payments.

If this is happening to you, you may be able to:

• Until you are able to regain control of your finances, you can request a PCP agreement payment holiday
• Don’t let your debts get out of control by looking for debt solutions
• Ensure that unnecessary expenses are cut by creating an effective budget
• You may want to consider ending the Hire Purchase agreement (HP)

Is it possible to finance a car?

You may have been thinking of selling your vehicle even though it is still under a car finance agreement. Nevertheless, this is illegal.

You are not the legal owner of the vehicle until all your payments have been made to the finance company. As a consequence, if you sold it, they could sue you for the money and force you to reimburse them.

And it doesn’t end there…

Depending on the circumstances, you may have to go to court in order to get back the money you collected from the person you sold the vehicle to. Legal costs may also be incurred by you.

Can I settle my car finance agreement?

A settlement figure could be obtained from the lender in return for early payment on the car.

In the settlement figure, there will be an amount set aside to pay off the car loan early and become the instant owner of the car. In most cases, settlement figures will be lower than the original agreement amount, but you may have to pay early settlement fees.

It’s worth keeping in mind that you may have agreed on a final balloon payment at the end of the contract. You would still need to pay this.

Paying to settle with the lender can be beneficial if you can afford to do so. You will immediately own the car and can sell it to recover some or all of the money.