Car Finance Daily Car Blog
Can You End a Car Finance Plan Early?

A car finance payment plan can be a very challenging and financially taxing endeavor. A lot of people find that they pay a lot of money every month, and it can be difficult to keep up. There are also a handful of situations where you might want to cancel your repayment plan because either your circumstances have changed or the value of the car would be less than the cost of repayments, and it’s no longer financially viable for you.

We want to make it very clear that in no way do we suggest canceling a repayment plan unless necessary, but understanding what options you have available to you is crucial, so let’s take a look.

The Condition of Your Vehicle

A vital factor to think about when prematurely ending a payment plan is the condition of your vehicle. Those vehicles which have been damaged more than general wearing tear would allow are subject to extra repayments.

So for example, if you broke the wing mirror, that might count as being an exceptional breakage which requires an additional payment.

Your dealership will articulate precisely what constitutes general wear and tear, but typically most vehicles are accepted back so long as they’re not massively damaged.

Early Termination Fees

Something that you may find you have to deal with is early termination fees. A lot of dealerships won’t care if you attempt to terminate a repayment plan, because they will charge you termination fees to compensate for the fact that you won’t be making any more payments.

These can vary in cost, but sometimes they equate to the rest of what you’ve got to pay, so be careful.

Termination fees are typically listed somewhere in your contract or on the website, so make sure that you consult with that before you decide to make any moves.

It’s important to note that exiting prematurely can in some instances cause damage to your credit score, so if you want to try again, you only have access to poor credit car finance deals.

Settle, Split n Sell

Sometimes, one of the best options for exiting a payment plan is to go with the tactic known as settle, split, and sell. In essence, what you do in this situation is sette with the provider to buy the car by paying off the rest of your plan at once, leave the contract with the vehicle, and then sell it on and try and recoup most of what you’ve lost. It isn’t the most efficient way to end a payment plan, but sometimes it’s the best way when you’re trying to make back some of your money, assuming that the vehicle you’ve bought is still worth quite a bit.

To summarise, yes you can leave a contract early, but there can be costs to doing so. You should try and make sure that you are considering the potential complications before you try and leave, because that dealership will not look favourably on you in the future.

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