If you’re worried you might not be able to meet your car finance payments in future, or need to cut your costs even more, you might be able to return the car and cancel your contract.
If you decide to return the car, let the finance company know by letter or email – and keep a copy. Make it clear that you’re returning the car and ending the agreement.
If you don’t do this you could be seen to be defaulting on your payments, which could affect your credit file.
When returning your car and ending your credit agreement early, the condition of the vehicle is important. General wear and tear are acceptable. But you’ll be charged for the repair costs of things like broken wing mirrors or larger scratches.
Check with your dealer or finance provider to find out what’s classed as fair wear and tear.
If there’s damage that doesn’t count as wear and tear, it’s worth checking to see if you can get the car repaired by a garage before returning it if that’s a cheaper option.
If your PCP term is ending soon, but you can’t afford the balloon payment, you should ask your finance provider how they can help.
You might decide to refinance the balloon payment with your current finance provider or choose another provider. If the value of your car has fallen below your final payment, this might not be your best solution.