Early Settlement

A settlement figure is the total amount you need to pay to clear your finance early and take ownership of the vehicle. It includes your remaining balance, any arrears, and a reduced amount of interest because you're paying early.

We understand everyone's circumstances are different and can change over time. There may be a number of reasons why you decide to settle your agreement early, maybe you're looking to change your vehicle, reduce your monthly outgoings, or simply want the flexibility of paying off your agreement sooner. For regulated agreements, in accordance with the Consumer Credit Act 1974, you have the right to repay your agreement early at any time prior to your agreement end date.

How the interest reduction is calculated depends on your agreement type:

Regulated agreements: the amount is calculated in line with The Consumer Credit (Early Settlement) Regulations 2004, including 28 days deferred interest and, if your agreement is greater than 12 months, an amount equal to 30 days interest.

Unregulated agreements: we use a fair outcome method called the Sum of the Balances, which adjusts the interest to reflect early repayment.

Because you’d be paying off your finance sooner than originally planned, you’re entitled to a reduction in interest. This is often referred to as an interest rebate. We calculate this reduction using a standard approach known as the actuarial method. This method takes into account the payments you’ve already made, applies them to the interest due, and then reduces the remaining balance of your agreement.

For further information please refer to section 7 of your finance agreement, or click here.

Right of Withdrawal: Only available within the first 14 days of your agreement. You repay the full amount borrowed plus interest for the days you have had the agreement. After this payment you take ownership of the vehicle.

Early Settlement: Available after the first 14 days of your agreement. You repay the remaining balance in full and then take ownership of the vehicle. As the interest is higher at the start of an agreement, settling early will include more interest than if you were closer to the end of your agreement.

As outlined in the Consumer Credit Act 1974, every monthly payment you make is split between interest and the amount you borrowed (the capital).

At the start of your agreement, a larger portion of your payment goes towards interest because your balance is higher. As you make payments and your balance reduces, the amount of interest charged each month also goes down. This means more of your payment goes towards paying off the capital over time.

_{The figures in the example above are for illustration only.}

For regulated agreements, a settlement quote is valid for 28 days after the date requested. For unregulated agreements, the quote is valid for 28 days, plus any additional days up to the next payment date. If the settlement quote expires, a new settlement figure must be requested.

Paying the settlement figure brings your agreement to an end early, which means interest stops being charged from that point. This will reduce the total amount you repay overall, as there is less interest to pay.

After requesting your settlement figure and choosing to settle your agreement early, there are 3 ways to pay:

We accept all major Debit and Credit Cards, excluding American Express. Once your payment has cleared, it takes us around 10 working days to close your agreement. We'll send a final letter within 3 weeks confirming your agreement has ended. You'll then have full ownership of the vehicle.

If you have settled your agreement or part exchanged, and another monthly payment has been paid since the day the settlement quote was generated, a refund may be due to your account. Please allow up to 14 days for this to be processed from the date we received your settlement payment.

If you need further information about settling your agreement early, or you're experiencing financial difficulties, we're here to help.