Can you part exchange a car on PCP?

During a PCP agreement, the finance provider normally remains the legal owner of the vehicle unless and until the agreement is settled and any required purchase conditions are completed.

You are usually the registered keeper and responsible for using, insuring and maintaining the vehicle, but that does not automatically give you the right to sell or transfer it.

You should not sell, transfer or part exchange the vehicle without dealing with the outstanding finance and following the finance provider’s requirements.

Check the exact terms of your agreement and speak directly with the finance provider if anything is unclear.

A dealer considering the vehicle will normally compare its appraisal with the current settlement figure.

If the dealer agrees to proceed, it may arrange to pay the finance provider directly as part of the transaction. The precise process depends on the dealer, finance provider and agreement.

The dealer may ask for a copy of the settlement quotation or permission to confirm information with the finance provider.

You remain responsible for the existing PCP agreement until the finance provider confirms that the required settlement payment has been received and the agreement has been brought to an end.

Potentially. A different dealer may be willing to take the vehicle as part exchange, but the outstanding PCP finance still needs to be dealt with in line with the finance provider’s requirements.

Ask the dealer how it proposes to obtain or use the settlement figure, how the finance payment will be made and how any positive equity or shortfall would be handled. Do not assume the PCP has been settled until the finance provider confirms it.

There may be positive equity where the dealer’s final vehicle valuation is higher than the amount required to settle the existing finance.

After the finance is settled, the remaining value may be available towards another vehicle or handled as agreed within the transaction.

The amount is not confirmed until the dealer completes its appraisal and the finance provider supplies a valid settlement figure.

This is commonly described as negative equity.

It means the dealer’s vehicle valuation is not enough to settle the outstanding PCP finance in full.

The shortfall would need to be addressed before the current agreement can be fully settled. How this is handled depends on the consumer, dealer, finance provider and any separate finance application.

A dealer may decide not to proceed with the transaction.

Drive On does not arrange finance, refinance negative equity or advise consumers to borrow to cover a shortfall.

Some dealers may arrange to pay the finance provider directly on the consumer’s behalf as part of a completed transaction.

Before proceeding, confirm:

You remain responsible for the finance agreement until the finance provider confirms that it has been settled.

Retain copies of the settlement quotation, transaction documents and settlement confirmation.

No.

A valuation, dealer enquiry, vehicle appraisal or agreement in principle does not by itself settle the PCP finance.

The existing agreement continues until the settlement process is completed and the finance provider confirms that it has been brought to an end.

Continue following the finance provider’s payment instructions unless it confirms otherwise. Do not cancel a Direct Debit or stop making payments solely because a dealer transaction is being discussed.

No.

Part exchange involves a dealer taking the existing vehicle as part of a wider vehicle transaction, with the outstanding finance dealt with as part of that process.

Handing a vehicle back at the scheduled end of a PCP agreement is one of the contractual end-of-term options, subject to the agreement’s mileage, condition and other requirements.

Voluntary termination is a separate legal process that may be available under certain regulated finance agreements after the required proportion of the total amount payable has been paid, or after enough is paid to reach that point.

Read more about changing your car on PCP early

Understand the scheduled end-of-PCP options

A dealer may discuss another vehicle or finance application as part of the proposed transaction.

Any new finance is separate from the existing PCP settlement and will normally be subject to the lender’s eligibility, affordability and credit-assessment requirements.

Approval for a previous PCP does not guarantee approval for another agreement.

Drive On does not provide finance advice, broker finance, submit finance applications or guarantee eligibility.

You should not privately sell or transfer a PCP vehicle while the finance remains outstanding without the finance provider’s permission.

Obtain an official settlement figure and follow the provider’s instructions.

A private sale should not be completed until the finance position has been resolved and you are legally entitled to sell the vehicle.

Drive On allows you to share your current vehicle and PCP position once.

Approved dealers can review a masked summary of the opportunity. Your direct contact details are not shown unless a dealer chooses to unlock the opportunity.

Submitting your details is free for consumers. There is no consumer account and no obligation to proceed.

Drive On does not value the vehicle, calculate or verify settlement figures, settle finance, arrange part exchange, provide financial advice, broker finance or guarantee that a dealer will proceed.