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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I have a question about PCP finance on a new car. We're

Customer Question

I have a question about PCP finance on a new car.
We're considering buying a new car with PCP finance over 3 years. One thing that we're not sure about is what happens if we need to stop the agreement before the end?
I understand that when we have paid back 50% of the total agreement price, we can do a voluntary termination - but because of the balloon payment being about 50% of the value of the car, that will not be an option until the end of the 3 years anyway.
What happens if after 1 year we need to stop? Can we just hand it back and pay the negative equity? Can we sell the car and pay off the finance? Or what other options are there?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you.
Its 50% of the repayments, so once you pay 50% of the number of payments then toy can voluntary surrender it at no most. You do not take into account the balloon payment.
You can hand it back after 1.5 years without any penalty. You can sell the car and pay it off if you wish.
Can I clarify anything for you about this today please?
Customer: replied 2 years ago.

I have seen a lot of conflicting answers about this.

I was under the impression that you have to pay back 50% of the total agreement price (which includes the final balloon payment) before you can do a voluntary termination.

Is there any chance you can link to any references that back up your answer?

Thank you :)

Expert:  Ash replied 2 years ago.
Section 100 Consumer Credit Act 1974
Does that help?
Expert:  Ash replied 2 years ago.
I am just following up to see if there is anything else I can help with?
If you have not done so already might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.
If you need more help please click reply.
Customer: replied 2 years ago.


After speaking to the finance company that (Audi Finance) they have insisted that the voluntary termination is only possible after we have paid 50% of the total (monthly payments + fees + balloon payment + interest). For a 36 month contract, this will happen at month 33.

Most advice we have seen has said the same as Audi Finance.

I wanted it to work the way that you suggested - but it appears that it doesn't, unfortunately.

Expert:  Ash replied 2 years ago.
But you are not required to pay the balloon, you can hand the vehicle back. Therefore its only 50% of sums due. If it was meant to be 50% then month 33 of 36 is grossly unfair and defeats the whole point of the system.
Does that clarify?
Expert:  Ash replied 1 year ago.
If this answers your question could I invite you rate my answer before you leave today.

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