Worried about your car finance?
Here's what you need to know.
From hidden interest costs to repossession fears, we'll walk you through your rights, your options, and exactly what your deal is really costing you.
Free guide
PCP Car Finance Explained UK
What PCP really costs, your rights to exit early, and how to avoid common traps.
📋 Quick facts before you start
- ✓UK drivers owe over £40 billion on car finance, PCP is the most common type.
- ✓You can voluntarily terminate a PCP/HP deal after paying 50% of the total amount.
- ✓Lenders need a court order to repossess once you've paid more than one third.
- ✓Always check the total amount repayable, not just the monthly payment.
- ✓Pre-2021 car finance customers may be owed compensation from the FCA mis-selling scandal.
Quick estimate
Can I afford this car on finance?
How much interest will I actually pay?
Car finance deals often advertise a low monthly payment but hide the true cost. A £12,000 car on a 48-month PCP at 9.9% APR can cost you over £2,500 in interest alone, before any balloon payment at the end. Always compare the total amount repayable, not just the monthly figure.
What is my settlement figure and can I exit early?
On a PCP or HP agreement you have a legal right to "voluntary termination" (VT) once you've paid 50% of the total amount payable, including interest and fees. This lets you hand the car back with no further payments. If you haven't hit 50% yet, you can request a settlement figure from your lender at any time.
↑ StepChange, free, confidential advice
I'm worried about repossession, what are my rights?
If you've paid less than one third of the total finance amount, your lender can repossess the car without a court order. Once you've paid over a third, they need a court order first. If you're struggling, contact your lender immediately, they're required by FCA rules to treat you fairly and offer breathing space before taking action.
↑ Citizens Advice, free, impartial help
Was I mis-sold my car finance deal?
The FCA found widespread mis-selling of car finance through "discretionary commission arrangements", where dealers earned more by charging you a higher rate. If you took out car finance before January 2021, you may be owed compensation. A free eligibility check takes minutes.
↑ Resolver, free complaints tool
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