Voluntary termination vs settlement

“Can I get out of my PCP?” often leads to two very different concepts being mixed together: early settlement and voluntary termination (VT). Understanding the distinction prevents a lot of bad calculations.

Early settlement

You ask the finance provider for the amount required to clear the agreement early. If that amount is paid, the finance is settled in accordance with the lender’s quotation. If you are planning to sell the vehicle, the finance normally needs to be dealt with because you do not own the car free of the agreement beforehand.

Voluntary termination

MoneyHelper explains that the Consumer Credit Act can give a right to return a qualifying vehicle once the relevant 50% liability position is met, or by making up the difference to that point. On PCP, the balloon payment is included in the contract value, so reaching 50% can happen later than people expect.

Why the numbers are different

The settlement figure is a lender quotation for clearing finance. The VT figure relates to statutory liability and agreement wording. One should not be substituted for the other.

Which is “better”?

There is no universal answer. Settlement may make sense where the vehicle’s value compares favourably with settlement; VT may be relevant where the statutory route is available and returning the vehicle fits your circumstances. Condition, arrears and contractual obligations can matter, so confirm before acting.

Last reviewed: 5 September 2026