Sometimes things change, and you might need to end your finance agreement early. Maybe you want to sell your car and get a different one, or you just don't need a car anymore. Whatever the reason, you tell your finance provider you want to end your car loan early, and they will tell you how much you need to pay – this is the settlement figure.
Yes, it does. The settlement figure is the total amount you still owe on your car loan, including any interest. If you paid a deposit or have made some payments already, those will be subtracted from the total amount you owe.
If you have a personal contract purchase (PCP) agreement, the settlement figure will include a large final payment called a ‘balloon payment’.
If you have a hire purchase (HP) agreement or an unsecured personal loan (UPL), there isn't a balloon payment to pay, but there may be early settlement fees.
Your lender will add up all the payments you still need to make until the end of the loan. They subtract any future interest and the deposit you paid. If you missed any payments, those will be added, along with any early settlement fees. If you added extras like warranties or maintenance to your loan, you’ll need to pay for those too.
A multi-part agreement (MPA) allows you to add extras to your finance agreement, such as certain warranties and maintenance. You can settle your Oodle finance by selecting ‘Request a settlement figure’ from our app (iOS or Android), from our customer portal, and from the ‘Chat with us’ feature at the bottom of this page. This will show you how much you need to pay to settle the finance. If you want to fully settle your MPA, you’ll need to pay off any add-ons or negative equity too.
Voluntary termination
If you have an HP or PCP finance agreement and you've paid off 50% or more, you can usually give the car back and end the contract early through a process called ‘voluntary termination’. You'll still have to pay any missed payments or fees. If you haven't paid 50% yet, you'll need to pay the difference to reach 50%.
With a UPL arrangement, you don’t need to worry about reaching the 50% threshold.
Contact your lender and tell them you want to end your agreement early. They will calculate your settlement figure and send it to you in writing, usually giving you 28 days to pay. If you don’t pay within that time, you’ll need to ask for a new settlement figure.
Some lenders, including Oodle, will let you request a settlement figure online. With us, you can do this via the Oodle app, from our customer portal, or via the ‘Chat with us’ feature on our website.
If you need to end your finance agreement early but you can't afford to pay your settlement figure, talk to your lender. They can help you figure out what to do.
Voluntary surrender
If you’re having trouble paying your car finance, contact your lender – they will want to help you. If all else fails, you might want to think about ‘voluntary surrender’. This means you give the car back to the finance company, and they sell it to help pay off your settlement figure. If the car sells for less than what you owe, you’ll still have to pay the difference, but the finance company can help you set up a payment plan. If the car sells for more than the settlement figure, you’ll receive the extra money. Voluntary surrender will affect your credit score, so it's a last resort.
It’s never a good idea to get into more debt if you are already struggling. If – and only if – it is manageable, you may be offered the option to refinance to a new deal. This will mean settling your existing agreement with a one-off payment (usually by incorporating the original finance into the new one) and switching to a new plan with more affordable monthly repayments over a longer loan term.
Can I pay off some of my settlement figure?
Yes, you can! If you want to pay off part of your agreement early, tell your lender. This is called a partial settlement.
Is it worth paying off car finance early?
It depends on your situation. You could save money on interest if you pay off your car finance early, but there might be fees for ending your contract early. The amount you save depends on how much time and interest are left on your loan. Make sure to check all the costs before deciding.
