This option makes the most sense if you are nearing the end of the financing agreement, if there is less difference between what you owe and what the car is worth. Try using VT before you`ve paid half the credit, and you need to make up the difference between what you`ve paid so far and half the total amount to pay, which could be thousands of pounds. Under UK law, you have the right to terminate certain types of car financing agreements prematurely. This is called voluntary dismissal. Section 99 of the Consumer Credit Act states that, in certain circumstances, you may voluntarily terminate a regulated DEP or PCP contract. This applies to both new and used cars. The purpose of the law is to protect people who may have accepted a financing contract but for one reason or another can no longer afford the monthly repayments. Although the law covers both PCP and HP agreements, they are both slightly different in how they work – read on to find out how both work and how to terminate them. If you don`t pay, HP could hire collection companies or take you to court. Since companies lose money if you terminate early deals, this means that they are often not very favorable if you want a voluntary dismissal.

They might want the process to take as long as possible. None of us know what the future holds, which is why entering into a car financing contract, whether it`s a Hire Purchase (HP) or a Personal Purchase Agreement (PCP), is not to be taken lightly. Your current circumstances may be very different tomorrow. The most important thing is that this sum also includes the balloon payment. This is essential, as it means you probably haven`t paid off 50% of your total financing contract in the middle of your monthly repayment plan. However, many people have sold payment insurance incorrectly or do not know that a financial company has added it to a deal they have made. The amount the lender can charge you for prepayment of an HP agreement is limited by law. The PCP deal is one of the most popular types of auto financing. For this type of financing, you need to make a first deposit, followed by a series of monthly payments. At the end of these monthly payments, you have two main options.

Most businesses don`t like you resiliating a deal (see below), so you can expect them to look for ways to cut down on your monthly payments to make them more affordable — perhaps by distributing the loan over a longer period of time…