PCP and HP calculator with the voluntary termination half rule
Voluntary termination lets you end a UK PCP or hire purchase agreement at any time before the final payment falls due, and the half rule fixes what it costs: nothing further once the sums paid and due reach half the total price, and the shortfall up to that half before then. Because section 189(1) of the Consumer Credit Act 1974 counts the optional final payment inside that total price while your monthly instalments do not, that point falls later than halfway through the term.
This page states what the law says and what your own figures produce. It does not recommend a product, a lender or a course of action.
Your agreement
Read these off the agreement itself. Nothing here is filled in for you except the APR, because no UK body publishes a typical deposit, term or final payment, and a calculator that guesses them is guessing at the numbers that decide the answer.
The price before any deposit, as shown on the agreement.
Counts in full towards the sums paid, so it pulls the half-rule point earlier.
The number of monthly instalments.
Seeded at 12% because that is the average APR on hire purchase for used vehicles in FCA, CP25/27 Technical Annex 2 (7 October 2025). That is an average across the regulator's dataset, not a rate anyone is entitled to and not your rate — replace it with the APR printed on your agreement.
On a PCP this is the guaranteed minimum future value. On HP there is none, so enter 0.
Part of the total price under s.189(1), so it moves the threshold. Treated as £0 if left blank.
Used only to work out where you stand today. Treated as 0 if left blank.
The half rule, with the arithmetic
Section 100(1) of the Consumer Credit Act 1974 sets the liability on termination as the amount by which one half of the total price exceeds the sums paid and the sums due. Everything therefore turns on what goes into the total price, so here is that sum in full rather than its conclusion.
The same car on HP and on PCP
Identical cash price, deposit, term and APR. The only difference is the optional final payment, and it moves the half-rule point by years.
What voluntary termination does not clear
Reaching the threshold ends the agreement. It does not wipe the slate, and the bill that arrives afterwards is where most of the surprise lives.
- Excess mileage already run up. Voluntary termination does not wipe out liabilities that had already accrued (s.99(2)), and the Financial Ombudsman has determined excess mileage may be charged in addition to the half-rule figure.
- Any arrears outstanding on the agreement.
- More than the half-rule figure if you have not taken reasonable care of the car — s.100(4) increases the liability by the amount needed to compensate the lender for that.
- You must still return the car. The right ends the agreement; it does not transfer ownership, which only passes on the final payment and the option-to-purchase fee.
Nothing is filled in for you
Enter the cash price, deposit, term, APR and optional final payment and the monthly payment, the total amount payable and the half-rule position all appear here.
The three sections that matter
- s.99(1) — the right to terminate at any time before the final payment falls due.
- s.100(1) — liability is the amount by which one half of the total price exceeds the sums paid and due.
- s.189(1) — total price includes any sum payable on exercise of the option to purchase.
The Consumer Credit Act 1974 extends to the whole United Kingdom, Northern Ireland included, so unlike the MOT fee or a clean air zone charge, nothing on this page is a Great Britain-only rule.
Worked example: one car, three shapes of agreement
A £20,000 car, £2,000 deposit, 48 months, at 12% APR. Those figures were chosen to show the mechanism and are not a claim about a typical deal — no UK body publishes a typical deposit, term or final payment. The APR is the FCA average for used-vehicle hire purchase. Every number below is produced by the same calculation the tool above runs.
Hire purchase, no final payment
£468.61 / month
- Total price
- £24,493
- Half of it
- £12,247
- Half rule reached
- Month 22 of 48
- Through the term
- 46%
PCP with a £8,000 final payment
£336.25 / month
- Total price
- £26,140
- Half of it
- £13,070
- Half rule reached
- Month 33 of 48
- Through the term
- 69%
PCP with a £14,000 final payment
£236.98 / month
- Total price
- £27,375
- Half of it
- £13,688
- Half rule reached
- Never, on instalments alone
- Through the term
- 104%
Same car, same deposit, same term, same APR. On hire purchase the half-rule point lands at month 22 of 48. Add a £8,000 final payment and it moves to month 33, which is 69% of the way through. Raise the final payment to £14,000 and the threshold falls beyond the last instalment altogether, so paying every contractual payment would still leave a shortfall to settle before the right could be used for nothing.
For the law behind these figures written out at length, read the voluntary termination guide. For monthly repayments on their own, including a personal loan comparison, use the finance calculator.
Separate point: section 75 does not cover ordinary dealer-arranged HP or PCP
Section 75 of the Consumer Credit Act 1974 makes the creditor jointly liable with the supplier, but it applies only to an agreement falling within section 12(b) or (c), and dealer-arranged hire purchase or PCP falls outside that because the creditor is also the supplier of the car. Section 75 requires an agreement within CCA 1974 s.12(b) or (c). Dealer-arranged hire purchase and PCP fall outside it because the creditor is also the supplier.
Where section 75 does apply, to purchases put on a credit card, it covers a cash price above £100 and up to £30,000. That is why a deposit paid by card is often the part of a car purchase that section 75 reaches, while the finance on the car itself is not.
The two routes that do work are stronger, not weaker:
- •CCA 1974 s.56(2) — the dealer negotiates as agent of the finance company, so its statements bind the lender.
- •Consumer Rights Act 2015 s.7 — hire purchase is a goods contract, so a satisfactory-quality claim lies against the finance company that owns the car.
Alongside those, the Consumer Rights Act 2015 gives a 30-day short-term right to reject a faulty car from delivery, and a fault appearing within six months is presumed to have been present at delivery. Cars are the exception to the usual no-deduction rule: section 24(10) lets a deduction for use be made even inside the first six months, and it can only be made because the goods are a motor vehicle.
Full guide: section 75 and car financeWhy the halfway point is not halfway
The half rule is usually described as handing the car back once you have paid half. That is right about the fraction and wrong about the base. The half is measured against the total price, and section 189(1) defines the total price to include any sum payable on exercise of an option to purchase. On a PCP that is the balloon, and it can be a large share of the total price.
So the balloon sits inside the number you are climbing towards while sitting outside the payments doing the climbing. The consequence is arithmetic, not opinion: the more of the price is deferred into the final payment, the smaller each instalment and the later the crossing point. Push it far enough and the crossing point moves past the end of the term.
A deposit works the other way. It counts in full towards the sums paid on the day the agreement starts, so it pulls the crossing point earlier. That is why the hire purchase column in the worked example above reaches the threshold slightly before the midpoint of the term rather than exactly at it.
Section 99(1) gives the right at any time before the final payment falls due, and it applies to hire purchase and to conditional sale agreements regulated by the Act. PCP is a form of hire purchase, so it is covered: you do not own the car until the final payment and any option-to-purchase fee are paid.
What the calculator does not know
It does not know your excess mileage. Section 99(2) preserves liabilities that had already accrued when the agreement ends, and the Financial Ombudsman Service determined in DRN-3597504 that excess mileage may be charged in addition to the half-rule figure. On a high-mileage year that charge can be the larger of the two.
It does not know the condition of the car. Section 100(4) increases the liability where the customer has not taken reasonable care of the goods, by whatever sum is needed to compensate the lender.
It does not know your lender's own schedule. The payment here is an annuity computed from the APR you entered, converted to a monthly rate as (1 + APR)^(1/12) − 1, the basis prescribed by CONC App 1.2.6R rather than the APR ÷ 12 shortcut. Small differences in rounding and fee timing are normal.
It does not know what the car is worth. Voluntary termination is a right to end the agreement, not a valuation, and the largest single cost of running a car is depreciation, which no UK public body publishes.
The FCA motor finance redress scheme, as it stands
The scheme was confirmed in PS26/3 on 30 March 2026 and covers agreements entered into between 6 April 2007 and 1 November 2024. It was partially suspended by the Upper Tribunal on 1 and 2 July 2026, so lenders are not currently required to calculate or pay redress. Hearings are listed for 14 to 18 December 2026 or 16 to 26 February 2027, and payments are not expected before 2027.
The FCA has said there is no need to use a claims management company, and that one could cost over 30% of a payout. This is separate from voluntary termination: the half rule is a statutory right under the 1974 Act that exists whether or not any redress is ever paid.
For scale, the FCA recorded around 6.4 million motor finance agreements outstanding in 2024 and around £92 billion of advances, with an average advance of about £28,000 on a new car and about £15,000 on a used one. PCP accounts for over half of agreements and is the most common product for new cars at around 5% average APR; hire purchase is the most common product for used vehicles at around 12%, with a used-segment weighted average of 13%.
Factual information only. This page describes what the Consumer Credit Act 1974 says and what the figures you entered produce under it. It is not advice, not a recommendation and not a quotation, and it does not suggest that anyone should take, keep or end any finance agreement. Statutory references verified against legislation.gov.uk; APR averages from FCA, CP25/27 Technical Annex 2 (7 October 2025), checked 2026-09-09. Always check the agreement itself and speak to your lender before acting.