What Car? Q&A - How can I end my PCP contract?

Q: I’m two years into the PCP deal on my Honda, and want to get rid of the car because I don’t really use it much and could use the money that I spend on it every month. I’d like to get out of the contract without paying too much money. What is the easiest way of achieving this?
Kate Jackson

A: It is possible to extract yourself from a PCP deal before it reaches its end, but it depends on the car purchased, and the exact details of your deal. The terms and conditions of the contract should be with the paperwork you signed when the package was agreed.

Any regulated loan agreement (your PCP deal should be included) is covered under the Consumer Credit Act, and allows you to hand the car back and walk away after your payments have equalled 50% of the total amount payable in the contract. Contact the finance company that organised your loan for the exact amount.

Alternatively, you may be able to settle the agreement by selling the car privately or to a dealer, and paying off the outstanding amount. If you are lucky, you might even be able to sell the car for more than the settlement figure, and make some money.

Contact the finance company for a settlement figure, and investigate the value of your car. You will get more money selling it privately, but this may take longer than going to a dealer. If you do want to sell the car, you should inform the finance company first, which may require you to settle the loan agreement before you transfer ownership.