Managing your finance

End of a PCP: Your Options Explained

Reaching the end of a PCP? Your three options, and how to pick the right one.

IndependentWe sell no financeNo commissionMaths based on FCA rules & the Consumer Credit Act 1974

At the end of a PCP you have three choices: pay the balloon and keep the car, hand it back and walk away, or part-exchange any equity into a new deal. You don't have to decide until the agreement is nearly up.

The right choice depends on whether the car is worth more or less than the balloon (its Guaranteed Minimum Future Value). Here's how each option works.

What happens at the end of a PCP?

At the end of a PCP, the lender contacts you to choose between keeping the car, handing it back, or part-exchanging. Your monthly payments have covered the car's depreciation, not its full price.

The balloon, or GMFV, is the lump sum you'd pay to own the car outright. Compare it with the car's market value to see which option makes sense.

Your three options at the end of a PCP

You can keep the car, hand it back, or part-exchange — and equity is what decides the best move.

Keep it: pay the balloon (often with a new loan) and the car is yours.
Hand it back: return the car within its mileage and condition terms and walk away.
Part-exchange: if the car is worth more than the balloon, put that equity towards your next car.

Should you pay the balloon or hand it back?

Pay the balloon if the car is worth more than the balloon figure; hand it back if it's worth less. That comparison is the whole decision.

If the car's value beats the balloon, you have equity — keep or part-exchange it. If the balloon is higher than the car's value, handing it back is usually smarter than paying over the odds. Check the gap on the negative equity calculator.

Ending a PCP before the end date

If you want out before the term finishes, you can settle early or, once you've paid 50%, use voluntary termination. You don't have to wait for the final payment.

Work out the cost of settling early on the settlement calculator, or read about handing the car back through voluntary termination. For other agreement types, see end of an HP agreement.

Frequently asked

What happens at the end of a PCP?

The lender contacts you to choose between three options: pay the balloon (GMFV) to keep the car, hand it back and walk away within the mileage and condition terms, or part-exchange any equity into a new deal.

Should you pay the balloon payment or hand the car back?

Pay the balloon if the car is worth more than the balloon figure, because you'd have equity. Hand it back if the car is worth less than the balloon, as paying it would mean overpaying for the car.

Can you keep a PCP car at the end?

Yes. You keep it by paying the balloon payment (the Guaranteed Minimum Future Value), often funded with a new loan. Once it's paid, the car is yours outright with no further finance on it.

Can you end a PCP before the end date?

Yes. You can settle the agreement early to clear it, or, once you've paid 50% of the total amount payable, use voluntary termination to hand the car back and owe nothing more under the Consumer Credit Act 1974.

Work out your next step

Independent calculators — pick the one that fits your situation.

What happens at the end of a PCP?

At the end of a PCP, the lender contacts you to choose between keeping the car, handing it back, or part-exchanging. Your monthly payments have covered the car's depreciation, not its full price.

The balloon, or GMFV, is the lump sum you'd pay to own the car outright. Compare it with the car's market value to see which option makes sense.

Your three options at the end of a PCP

You can keep the car, hand it back, or part-exchange — and equity is what decides the best move.

Keep it: pay the balloon (often with a new loan) and the car is yours.

Hand it back: return the car within its mileage and condition terms and walk away.

Part-exchange: if the car is worth more than the balloon, put that equity towards your next car.

Should you pay the balloon or hand it back?

Pay the balloon if the car is worth more than the balloon figure; hand it back if it's worth less. That comparison is the whole decision.

Ending a PCP before the end date

If you want out before the term finishes, you can settle early or, once you've paid 50%, use voluntary termination. You don't have to wait for the final payment.

Work out the cost of settling early on the settlement calculator, or read about handing the car back through voluntary termination. For other agreement types, see end of an HP agreement.