Car finance outstanding.

Corona Virus and managing your monthly payments.

The majority of UK motorists have some type of finance package in place to pay for their cars. This includes the increasingly popular Personal Contract Purchase, otherwise known as PCP, Hire Purchase and Lease Purchase.

Whatever type of contract you might have, the small print stipulates your legal requirements to pay your monthly fee on time, to avoid charges or negative impacts on your credit rating.

Lady running a car history check before buying this Nissan Qashqai

COVID 19 and contractual requirement changes

In a recent article by the automotive team at CarVeto, we discussed a car finance check that outlined opportunities for motorists to end their contracts, potentially doing so without effecting credit score. We suggest looking at the article in some detail as you may be able to remove monthly car finance payments right away.

Voluntary Termination of Hire Purchase and Personal Contract Purchase

Here are the basics to see if you qualify for Voluntary Termination:


  1. Termination applies if you have paid at least 50% of the total loan amount back to the lending company. This includes ALL associated fees and interest charges combined.
  2. Some charges apply in the shape of either
    1% of the whole outstanding loan or,
    0.5% of the amount outstanding
    If the loan is less than 8K, you’ll need to pay the interest, instead.

Hire Purchase

  1. Return your car if less than half of the total loan amount has been repaid
  2. You will need to make any missing payments up to half total loan amount
  3. Anything more than half and the car cannot be returned

Buying or selling with outstanding finance

It is illegal to buy or sell a car with an outstanding finance agreement held against it. The car still belongs to the finance company until paid off in full. You can check a car for free using any car reg number.

Run a vehicle check (also known at a hpi check) with CarVeto and see if there is a loan on a car. This needs to be done before you by or even pay a holding deposit.

Outstanding car finance check before buying

More reading: Summer is on its way. See our previous article on car inspections for the summer months.

Team CarVeto

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