Voluntary termination is a right, not a favour. Under section 99 of the Consumer Credit Act 1974, once you have paid 50% of the total amount payable on a regulated PCP or HP agreement, you can end it, return the vehicle, and owe nothing further in instalments.
The catch that surprises most people: the 50% is of the total amount payable — the cash price plus all the interest plus any fees — not 50% of what the car cost. That is why the halfway point usually lands much later than half way through the term.
Work out your VT figure
Every number you need is on your finance agreement. Nothing is sent anywhere — this runs entirely in your browser.
How the 50% figure is worked out
The total amount payable is everything the agreement will cost you across its full life. On a PCP that includes the final balloon payment, because that sum is part of the credit you agreed to.
- Add up the total. Cash price + total interest + any fees = total amount payable.
- Halve it. That is your VT figure — the amount you must have paid before the right applies.
- Count what you have paid. Your deposit counts, and so does every monthly instalment.
- Pay any shortfall. If you have not reached the halfway figure yet, you can still VT — but you must pay the difference to get there.
You can VT before the halfway point. The right is always available; what changes is the cost. Terminate early and you settle the gap between what you have paid and the 50% figure in one go. Some people do this deliberately when the car is worth far less than the settlement.
What you can and cannot be charged
Once you have hit 50% and handed the car back in reasonable condition, the instalments stop. Lenders may still legitimately charge for:
- Damage beyond fair wear and tear. The BVRLA fair wear and tear standard is the benchmark most UK lenders use. Age and mileage are taken into account.
- Excess mileage, but only where the agreement expressly provides for it. This is contested territory — check your contract wording.
- Arrears. Any missed payments up to the termination date remain due.
They cannot charge you the remaining instalments, and they cannot refuse a valid VT.
Photograph everything before collection. Date-stamped photos of every panel, the interior, the wheels and the mileage are the single best protection against a disputed damage charge after the car has gone. Get the collection driver to sign the condition report and keep a copy.
VT compared with the alternatives
- Settling early. You pay the outstanding settlement figure and keep the car. Sensible when the car is worth more than the settlement — you have positive equity to release.
- Part exchange. A dealer settles the finance and puts any equity toward the next car. Only works in your favour with positive equity.
- Voluntary termination. You hand the car back and walk away. Usually the best route when the car is worth less than the settlement — negative equity that VT simply erases.
The deciding question is nearly always whether you have equity. Check your equity position before committing to any of them.
Common questions
Does the 50% include interest and fees?
Yes. It is 50% of the total amount payable — cash price, all interest, and fees such as option-to-purchase or documentation charges. It is not half the car's price, which is why the halfway point falls later than half way through the term.
Can the finance company refuse?
No. On a regulated agreement this is a statutory right, not a discretionary one. Put your request in writing, reference section 99 of the Consumer Credit Act 1974, and keep a record. If they resist, escalate to the Financial Ombudsman Service, which is free.
Will it damage my credit score?
VT is not a default and should not be recorded as one. It usually shows as the agreement ending early. Some lenders take a dimmer view of that in future applications, but it is a long way from a default or repossession. What genuinely does harm your file is leaving a balance unpaid afterwards.
Can I do this on a lease (PCH)?
No. PCH is a rental agreement rather than credit to acquire the vehicle, so section 99 does not apply. Ending a lease early means paying whatever early termination charge the contract sets.
What condition does the car need to be in?
You need to have taken reasonable care of it. Normal wear for its age and mileage is expected and cannot be charged for. Anything beyond that can be recharged, assessed against the BVRLA standard.
What if I have already paid more than 50%?
Then you can terminate immediately with nothing further to pay beyond arrears and any damage charges. Note that you do not get a refund of anything paid above the halfway figure, so there is rarely an advantage in waiting once you have passed it.
Track your VT date automatically
Motorise works out your voluntary termination date and minimum payable from your agreement, and keeps them up to date as you pay — alongside your balance, mileage and equity.
This calculator gives an estimate for general information and is not financial advice. Interest is modelled on a standard monthly reducing balance, which is how most UK PCP and HP agreements work, but your lender's exact figures may differ slightly depending on fees and rounding. Always request a formal settlement or termination figure from your finance provider before acting. Fees are not included in the calculation above unless you add them to the cash price.