Managing your finance
Voluntary Termination: Your Right to Hand the Car Back
Your statutory right to hand a PCP or HP car back once you've paid 50% — what it costs and when to use it.
Redress estimate
Any figures here are an estimate, not a promise, and nothing on this page is financial or legal advice. You can claim free yourself — you don't need a claims firm.
Voluntary termination is your legal right to end a PCP or HP agreement early by handing the car back, once you've paid 50% of the total amount payable. It comes from the Consumer Credit Act 1974, sections 99 and 100.
Once you reach the halfway point, you can return the car and owe nothing more — even if it's now worth less than your remaining balance. This guide is general information, not advice; check your own agreement and the figures before you act.
What is voluntary termination?
Voluntary termination (VT) is a statutory right that lets you end a regulated PCP or HP agreement by returning the car, once you've paid half of what you owe in total. It applies to PCP and HP regulated agreements — not PCH (leasing).
Your right under the law
When can you use voluntary termination?
You can use voluntary termination once you've paid 50% of the total amount payable — the full figure including deposit, all payments, the balloon on a PCP, and any fees.
If you haven't reached 50% yet, you can still terminate, but you must pay the difference to bring your total up to half first. Work out your halfway figure with the settlement calculator, or use the dedicated voluntary termination calculator.
- Add up the total amount payable on your agreement (it's stated on the contract).
- Halve it — that's your 50% target.
- Check how much you've paid so far against that target.
- If you're past 50%, you can hand the car back and owe nothing more for the finance itself.
What does voluntary termination cost?
If you've paid 50% and the car is in fair condition for its age and mileage, voluntary termination costs you nothing more. You may be charged for damage beyond fair wear and tear, or for going over the mileage limit.
Watch for extra charges
Does voluntary termination hurt your credit?
Voluntary termination is recorded on your credit file, but it's not the same as a default or missed payment. It shows the agreement ended early, which some lenders view less favourably than a fully completed deal.
It's far better for your credit than missing payments or having the car repossessed. If you're behind on payments, read missed a car finance payment before deciding.
Voluntary termination vs settling or selling
Voluntary termination wins when the car is worth less than you owe; settling or selling wins when it's worth more. VT caps your loss at the 50% point.
If you're in negative equity — owing more than the car is worth — handing it back through VT can save you money. If you have equity, you may do better to sell the car and keep the difference. Don't confuse VT with voluntary surrender, which is different and can leave you owing money.
Frequently asked
What is voluntary termination?
When can you use voluntary termination?
Does voluntary termination cost anything?
Does voluntary termination hurt your credit score?
Can you use voluntary termination on a lease?
Work out your next step
Independent calculators — pick the one that fits your situation.