Can I cancel car finance before I get the car?
Under UK law, the car finance agreement will have a 14-day cooling-off period. If the 14-day cooling-off period has passed, it’s unlikely you’ll be able to cancel. If you have paid a deposit for the new car and cancel within 14 days, you should get all your money back.
Cancelling a hire purchase agreement works a little differently. With a hire purchase, if you want to cancel the agreement, the finance company must be paid the money owed for the car within 30 days.
Can you give a car back during finance?
The answer is yes you can give your car back, but there are a few things to be aware of.
- You’ll likely be charged an early hand back fee. Check your contract for more information on what you’ll have to pay when you hand the car back
- When you agree to the monthly payments, you’ll also have pro-rata mileage limits. Should you exceed this limit, when you’re giving the car back, you will be expected to pay an extra charge for every mile travelled. The charge will be outlined in your personal contract hire plan
- If your financial circumstances mean you need to leave the deal early, you might have to borrow money via personal loans to pay the remaining balance to bring you up to 50% of the finance deal. It’s worth figuring out when applying for a personal loan whether it will end up costing you more in the long run compared to trying to reach the halfway point in your monthly repayments.
Can I give my car back on finance if I can't afford it?
You can voluntarily terminate your car finance agreement if you cannot afford the monthly repayments. Under the Consumer Credit Act, you can terminate your agreement provided you have paid at least half the cost of the finance agreement.
Another option is to sell your car to IsYourCarAvailable. We can buy your car outright and settle any outstanding finance. All you need to do is contact your finance provider and get an up-to-date settlement figure to find out how much it is to end the agreement early and send the car back.
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Does voluntary termination of car finance affect credit rating?
Voluntary termination does not affect your credit rating as you are exercising a legal right to end your agreement early.
How long does a voluntary termination stay on your credit report?
From the date you ended the finance agreement, your credit file will show the voluntary termination for seven years. Unlike a voluntary surrender, voluntary termination is unlikely to harm your ability to apply for credit in the future.
Voluntary surrender is when you contact the lender to let them know that you can no longer afford all the monthly payments.
When contacting your finance provider to communicate your wish to terminate or surrender the agreement, be clear with the route you’d like to take to avoid any confusion. In the event of voluntary surrender, you’ll be expected to hand the car back and pay any outstanding payments.