Pepipoo Motoring Legal Resources
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Financial · 24 November 2025 · 350 words · 1 min read

Tags: #civil #finance #hp #pcp #vt

Voluntary Termination

What Is Voluntary Termination?

VT enables you to return a vehicle and walk away from the agreement once you've paid at least 50% of the Total Amount Payable (including fees and interest). This is a statutory right protected under Section 99 of the Consumer Credit Act 1974 and so, fundamentally, overrides almost all terms and conditions you agreed to when taking out the finance.

Steps to Voluntarily Terminate Your Agreement

  1. Check your agreement type – VT applies to HP and PCP, not personal loans or lease agreements.
  2. Calculate your payments – Ensure you've paid at least 50% of the Total Amount Payable.
  3. Inspect the car – You must return it in reasonable condition (fair wear and tear is acceptable).
  4. Write to the finance company – Clearly state you're exercising your right under Section 99 of the Consumer Credit Act 1974.
  5. Arrange vehicle return – Cooperate with the lender to return the car promptly.

What to Watch Out For

  • Excessive damage – You may be charged for repairs beyond fair wear and tear.
  • Missed payments – VT may not be available if you're in arrears; lenders could pursue default instead.
  • Pressure to pay more – Some lenders may discourage VT or suggest you owe more - stand firm on your legal rights.
  • Credit impact – VT is not a default and shouldn't harm your credit score but check your credit file to ensure it's recorded correctly.

Best Practices: Do's and Don'ts

✅ Do:

  • Use written communication and keep copies.
  • Reference Section 99 of the Consumer Credit Act 1974.
  • Take lots of photos of the car before return.
  • Request a final settlement statement.

❌ Don't:

  • Let the lender pressure you into selling or part-exchanging instead.
  • Ignore damage or mileage clauses - review your agreement carefully.
  • Assume VT applies to all finance types - check your contract.

Legal Reference

Consumer Credit Act 1974, Section 99 – Termination of Agreements: View legislation

Conclusion

Voluntary Termination is a powerful consumer protection tool. If used correctly, it can help you exit a car finance agreement without penalty. Always act early, document everything, and know your rights.