Car Finance FAQs

Under Section 99 of the Consumer Credit Act 1974, you have the legal right to voluntary termination. This is when you end your car finance agreement early and hand the car back to the lender. You’ll need to pay 50% of the total amount payable (including the balloon payment in a PCP). If you’ve already made payments but not yet reached this point, you’ll need to pay the difference.

The great thing about credit scores is that they’re never fixed, and you can take proactive steps to improve them over time. It’s not an exact science, but you might be able to boost your score if you register on the electoral roll, make all your debt payments on time, don’t max out your credit cards, and keep the number of hard searches on your credit report low.

You can’t simply change a car with outstanding finance, you’ll need to settle the loan first. That’s because, with an HP or PCP deal, the lender will be the car’s legal owner until you’ve made all your loan repayments. It’s also against the law to knowingly buy a car with outstanding finance remaining.

Car finance lenders need to know your income to double-check that you can comfortably afford the loan you’re being offered. You can provide proof of income whether you’re employed or self-employed by providing recent payslips, bank statements, or copies of your company accounts if you own a limited company.

While it can be easier to secure a car finance agreement if you have a full UK driving licence, it is possible to get a loan if you have a provisional licence, an EU driving licence, or no licence at all. However, many lenders will ask you to upload a copy of your driving licence to serve as proof of identity.