Car Finance Settlement Figure

What a settlement figure actually is

A settlement figure is the amount you need to pay right now to close your finance agreement in full. Not the total remaining payments. Not the outstanding balance on a simple spreadsheet. The actual, legally calculated figure that settles everything cleanly.

It includes what you still owe on the car. It subtracts future interest you won't actually use, because you're paying off early. It may include a small early settlement fee. On PCP, it may include elements of the balloon depending on how far through the contract you are.

The figure is lower than just adding up remaining payments - because of the interest rebate. That rebate is where most people leave money on the table by not asking.

The interest rebate: what you're owed

Under the Consumer Credit (Early Settlement) Regulations 2004, you're entitled to a rebate of future interest charges when you settle early. This is statutory. The lender calculates it using a formula called the Rule of 78 (on older agreements) or an actuarial method (on most modern ones).

The actuarial method, which the FCA prefers, calculates exactly how much interest you'd have paid on the remaining term and knocks that off your settlement figure. The earlier you settle, the bigger the rebate. Settle 12 months into a 48-month agreement and you get a significant chunk back. Settle month 47 and you're saving almost nothing.

One exception: some lenders charge a statutory exit fee of up to 58 days' interest or 1% of the amount settled, whichever is lower. This is allowed under the Consumer Credit Act. It reduces but doesn't eliminate your rebate.

How to get your settlement figure

Contact the finance company directly. Not the dealer. Not a broker. The lender whose name is on your credit agreement.

Most finance companies let you request it through an online account portal or by phone. You can also write. Under FCA Consumer Credit rules (CONC 6.7), they must respond within 12 working days of receiving your request.

What you'll need ready: your agreement number, your name and address as registered on the agreement, and the date from which you want the figure calculated. The 28-day validity starts from that calculation date, not the date you receive it.

The 28-day window

Your settlement figure is valid for 28 days from the date it's calculated. After that, it expires and you need a fresh one. The new figure will be slightly different - interest will have accrued, and you may have made another monthly payment in the meantime.

Don't let it expire. If you've got a figure and you're planning to settle, move within the 28 days. If you're waiting on a sale or a bank loan to come through, keep that timeline in mind. A few days' delay can mean a couple of hundred pounds extra if the old figure lapses.

When settling early saves money

The most obvious case: you have a high-APR finance agreement and you've come into some cash. Say you're paying 9.9% APR on a four-year deal and you've got 24 months left. Settling now, even after the exit fee, saves you roughly 18-20 months of net interest. That can be £1,000-£2,000 depending on the outstanding balance.

The less obvious case: settling to refinance. If your credit score has improved since you took out the original agreement, you might now qualify for a personal loan at 4.1% APR - the Bank of England's March 2026 benchmark for personal loans. Use that to pay the settlement figure, then repay the personal loan at the lower rate. You own the car, your monthly payment drops, and you pay less interest overall.

Work the maths carefully. Settlement figure plus loan arrangement fee on one side. Total interest saving over the remaining term on the other. If the saving exceeds the cost, refinance.

When it doesn't save you much

Late in the agreement, the rebate is small. Month 44 of a 48-month deal - you're saving 4 months of interest, minus the exit fee. That might be £80. Not worth the admin in most cases.

Also: 0% deals. If you're on a manufacturer PCP at 0% APR, there's no interest to rebate. Your settlement figure is essentially just the outstanding balance. Settling early costs you nothing extra but saves you nothing either. Might still be worth it to free the car for a sale.

Settling to sell: HP vs PCP

HP

Straightforward. Get the settlement figure. Pay it. The finance company releases their legal interest in the car (they hold it under a bill of sale until HP is cleared). Then you own it outright and can sell. Some buyers and dealers will accept a simultaneous settlement-and-sale on the same day with solicitors or a car-buying platform managing the fund flow.

PCP

More complex. On PCP, you don't own the car at any point during the agreement - the finance company does. Selling it without settling first is technically selling something you don't own, which is fraud. Don't do it.

The process is: get the settlement figure, check if the car's trade value exceeds it. If the car is worth £18,000 and your settlement figure is £14,000, you have £4,000 equity. Sell the car (usually through a dealer or car-buying platform), they pay the settlement figure directly to the finance company, and the remaining £4,000 comes to you.

If the car is worth less than your settlement figure - which is common in the first half of a PCP deal - you're in negative equity. Selling means paying the shortfall out of your own pocket. That's a real cost. It's why many people stay in PCP deals they'd rather exit.

Settling to refinance: the numbers

The saving in that example is real but not enormous. Refinancing makes sense when the APR gap is large and you've still got a significant term remaining. A 3-4% rate difference on £20,000 over 36 months is meaningful. A 1% difference on £5,000 over 12 months isn't.

Use the calculator

Put your current outstanding balance into the calculator below. Compare the total cost at your current APR for the remaining term against the same amount at 4.1% (the current personal loan benchmark). That gap is your maximum possible saving before fees.

What if the finance company won't give you a figure?

They must. Within 12 working days. If they don't, write to their complaints department citing CONC 6.7.4R. If still no response after 8 weeks, escalate to the Financial Ombudsman Service. Finance companies know the Ombudsman costs them £750 per complaint whether they win or lose. A formal complaint usually produces a settlement figure very quickly.

The bottom line

Get the figure. Check the rebate maths. Compare it to a personal loan at the current market rate. If the settlement plus a cheaper loan costs less than running the existing deal to term, refinance. If not, don't bother.

The 28-day clock runs from calculation. Don't sit on it.