Voluntary Termination of your Car Finance
Sometimes, you need to ask 'Can you get out of car finance early?' The good news is that yes, you can.
Can you get out of car finance early?
Purchasing a car on finance is a popular method of being in control of your lifestyle and being able to drive wherever you want without spending all of your money and putting yourself in debt on a single purchase. It works by putting down a deposit, usually of 10%, and then paying off the cost of the vehicle in monthly instalments across 12, 18, 24, or even 48 months. This is known as a Personal Contract Purchase.
However, while car finance is a popular method, it doesn't always work out for everyone involved, and sometimes, you need to ask 'Can you get out of car finance early?' The good news is that yes, you can. If you are looking for tips and advice on how to undertake voluntary termination of car finance, here is everything you need to know.
Will Voluntary Termination Affect My Credit Score?
Your credit score is always something you need to think about when hoping to get financed on anything, whether it's something significant such as approval for a mortgage, or something such as a mobile phone contract. The same is true of car financing. Evidence of the terminated finance may show up on record during a credit check. However, it is unlikely to affect your credit score.
If you find yourself unable to keep up with payments, you may be tempted to simply stop paying them. However, unlike termination of your contract, this is almost certain to affect your credit score and could affect you being approved for loans and other financing contracts in the future. You may also experience higher APR charges later on.
With this in mind, voluntary termination is almost always the best option should you want to get out of your financing contract.