Can You Sell a PCP Car Before the Contract Ends?

Selling Your PCP Early - What You Need To Know

Personal Contract Purchase gives flexibility, but life does not always run on a fixed term. You might need a different car, your mileage could spike, or the used car market may have shifted in your favour. Selling a PCP car before the term ends is possible in the UK, but there are rules. The finance company owns the car until the agreement is settled. That means you must clear the outstanding finance before any sale goes through. In practice, you can request a settlement figure, pay it, then sell or part-exchange. Alternatively, you can sell through a dealer or online buyer who will settle the finance on your behalf as part of the transaction.

What complicates matters is the fine print. PCP agreements contain mileage limits, damage and fair wear clauses, and service requirements. If you hand the car back at term end, excess miles and condition charges may apply. Sell before the end and you avoid some end-of-term fees, but you must still meet settlement and provide the logbook once finance is cleared. Early in the term, negative equity is common because you are paying interest and initial depreciation. Later, you may have equity if the car holds value above the settlement figure and the optional final payment.

There is also a timely backdrop for UK drivers. Many PCP and HP agreements from 2007 to late 2024 included undisclosed commissions between dealers and lenders. The Supreme Court has clarified lenders’ fairness duties, and the FCA is finalising a redress scheme expected in early 2026. Average compensation is signposted at around £700 per agreement, with complaint handling pauses due to lift on 31 May 2026. If your deal was mis-sold, you could reclaim overpaid interest even if the agreement has ended. Understanding your settlement options alongside potential redress puts you in control of real costs.

Selling early is legal - you just need to settle the finance first.

Quick takeaway

If your car’s market value exceeds the settlement figure, selling early can make financial sense. If not, consider voluntary termination thresholds or waiting until more equity builds.

Who Will Benefit From This Guide

If you currently have a PCP or HP on a car, van, or motorbike and are considering changing vehicle, freeing up cash, or cutting monthly costs, this guide is for you. It is equally relevant if you have moved jobs, your mileage has changed, or you face repair bills that make keeping the car less attractive.

It is also helpful if you had a PCP or HP agreement between 2007 and 2024 and suspect commissions were not properly disclosed. You may be eligible for compensation under the upcoming FCA scheme while still making the right decision about selling your car. As a UK-based retail finance broker, Kandoo focuses on clear, practical steps so you can act with confidence.

Your Practical Choices

1. Request a settlement figure and sell privately for the best price.

2. Part-exchange with a dealer who settles the finance on your behalf.

3. Sell to an online car buyer that handles finance settlement directly.

4. Keep the car and wait until equity improves or the balloon is due.

5. Pay the balloon early then sell as the legal owner.

6. Consider voluntary termination if eligible under Consumer Credit Act rules.

7. Pause and check potential mis-selling redress before making a move.

Pounds and Pitfalls - What It Could Mean For You

Are You Likely To Qualify For A Claim Or Early Exit?

If your PCP or HP was taken out in the UK between 6 April 2007 and 1 November 2024 and the dealer or lender did not clearly disclose commissions, you may be eligible for compensation once the FCA scheme rules are finalised in early 2026. The Supreme Court decision reinforced fairness duties, and the FCA has paused complaint handling until 31 May 2026 to align firms with the new framework. Many agreements included discretionary commission models that were banned in 2021, and the regulator estimates a significant share of deals may have been mis-sold. Compensation could include a refund of overpaid interest plus statutory simple interest, though exact amounts depend on the final rules and individual circumstances.

For selling early, eligibility is simpler. You can sell at any time as long as the finance is settled first. If your car’s value is below the settlement figure, you will need to pay the shortfall or consider voluntary termination if you have paid at least 50% of the total amount payable under the Consumer Credit Act. Always request a written settlement figure and check for any early settlement interest adjustments. Kandoo can help you navigate settlement versus sale options and highlight tools to check potential redress without paying upfront fees.

Step-by-Step To Sell A PCP Car Early

1. Get a written settlement figure from your lender.

2. Check your car’s live market value with multiple sources.

3. Decide: private sale, dealer part-ex, or online buyer.

4. Confirm who will settle the finance and when.

5. Obtain written confirmation of settlement before handover.

6. Clear outstanding amounts and receive proof of title.

7. Complete V5C transfer and cancel or update insurance.

8. Keep all documents for potential FCA redress claims.

Advantages And Trade-Offs

Read This Before You List Your Car

Timing matters. Used car prices move with supply, interest rates, and model-specific demand. Get at least three valuations the same week you request your settlement figure. If values are close to the settlement, a small shift could tip you into shortfall. Confirm service history and address minor repairs to protect your price. If your car could be written off or stolen while on finance, consider whether gap insurance is in place so you are not left owing the lender more than your insurer pays. Be cautious with unsolicited calls or messages about PCP claims. Do not pay upfront fees and use trusted free tools to check eligibility. Keep an eye on the 31 May 2026 complaint pause end date and the FCA’s final scheme rules expected in early 2026, especially if your agreement ran between 2007 and 2024.

Only hand over keys once you have written confirmation that the finance has been settled.

Alternatives If Selling Now Is Not Ideal

1. Refinance the balloon to spread the cost over more months.

2. Wait until you cross the 50% threshold and consider voluntary termination.

3. Keep the car to the end, then return it within mileage and condition limits.

4. Part-exchange into a cheaper model to reduce monthly outgoings.

5. Make an overpayment to reduce settlement, then review values again.

FAQs

Q: Can I sell a PCP car before the end of the contract? A: Yes. You must settle the finance first. Many dealers and online buyers will handle settlement as part of the transaction.

Q: How do I find out my settlement figure? A: Contact your lender and request a written settlement figure. It will include the remaining balance and any interest adjustments.

Q: What happens if my car’s value is less than the settlement? A: You must pay the shortfall or consider voluntary termination if you have paid at least 50% of the total amount payable and meet condition requirements.

Q: Could I be owed money from my old PCP? A: Possibly. Agreements from 2007 to 2024 with undisclosed commissions may qualify for compensation under the FCA’s upcoming redress scheme, with average payments around £700.

Q: When will I be able to make a formal claim? A: The FCA plans to publish final rules in early 2026. The complaint pause is due to lift on 31 May 2026, after which claims can proceed under the scheme or individually.

Q: Are there scams around PCP claims? A: Yes. Avoid unsolicited contacts and upfront fees. Use reputable, free eligibility tools and communicate directly with lenders or trusted services.

Q: Do I need gap insurance? A: It is not compulsory but can protect you if the car is written off or stolen while you still owe more than the insurer pays.

How Kandoo Can Help

Kandoo is a UK-based retail finance broker committed to clear, jargon-light guidance. We help you compare settlement versus sale options, sense-check valuations, and understand voluntary termination. We also signpost reputable, free eligibility tools for potential PCP or HP redress so you can act safely. Ready to move? Speak to Kandoo for straightforward next steps.

Important Information

This article provides general information only and is not financial advice. Always check your agreement and obtain written figures from your lender. Redress eligibility and amounts depend on final FCA rules and personal circumstances. Consider independent advice if unsure.