The Latest Car Finance News & Advice

Understanding Car Finance Help And Your Rights In 2025

by Jamie Burgoyne on Jun 13, 2025 3:51:22 PM

A clear guide to your options if you're struggling with car finance

Car finance can be a practical way to get on the road, but what happens if you hit financial difficulty and can’t keep up with the payments?

Whether you're dealing with rising living costs, reduced income, or unexpected expenses, knowing your rights around car finance and understanding what help is available can make a huge difference.

This guide breaks things down in plain English, offering support, legal context, and practical options to help you feel more in control, no matter your situation.

👉 What happens if you can't afford your car finance payments?
👉 Your rights if you're struggling with car finance
👉 What is voluntary termination of a car finance agreement?
👉 Can I return a car if I've just bought it?
👉 Can I refinance my car if the payments are too high?
👉 Will missing a car finance payment affect my credit score?
👉 What support does Marsh Finance offer when I'm struggling?
👉 Where can I get free debt help if I'm struggling?
👉 Summary
👉 FAQs

A person looking in their wallet which is empty, indicating they have money troubles.

🚗 What Happens If You Can’t Afford Your Car Finance Payments?

First, take a breath. You’re not alone, and lenders like Marsh Finance are here to support you, not punish you.

If you're falling behind or worried about upcoming payments:

  • Don't ignore it. Reach out to your lender as early as possible.
  • Many lenders, including Marsh Finance, can offer:
    • Temporary reduced payments
    • Payment holidays
    • Help reviewing your agreement
    • Support for vulnerable customers

Important: Speaking up early can prevent a missed payment from affecting your credit score and make your options more flexible.

Newspaper cut outs spelling 'RIGHTS' forming the background, with a large white cut out reading 'RIGHTS' again.

⚖️ Your Rights If You're Struggling With Car Finance

When life gets difficult, it's important to know that you're not powerless. If you’re having trouble making your car finance payments, there are clear legal protections in place to support you, and lenders like Marsh Finance are required to follow them.

Here’s what your rights actually mean in real terms:

✅The right to fair treatment under the FCA’s Consumer Duty rules

The Financial Conduct Authority (FCA) sets rules to ensure all finance providers act in your best interest. This includes treating you fairly, clearly explaining your options, and offering support, especially when you’re in financial difficulty.

Under the FCA’s Consumer Duty, lenders must:

  • Communicate clearly and honestly
  • Make sure their products are suitable and affordable
  • Support customers when they’re vulnerable or struggling
  • Avoid causing harm through poor treatment or inaction

At Marsh Finance, we live by these standards, not just because we have to, but because it’s the right thing to do.

📩 The right to complain to the Financial Ombudsman Service (FOS)

If you’ve raised a concern with your lender and don’t feel it’s been handled fairly, you can take your complaint to the Financial Ombudsman Service — an independent, free service that helps resolve disputes.

You can use this service if:

  • You’ve given your lender 8 weeks to resolve your complaint
  • Or, if they’ve sent you a final response you don’t agree with

This gives you a path to fairness if something has gone wrong.

🤝 The right to support during financial hardship

If your circumstances change — job loss, illness, caring responsibilities, or anything else — you have the right to ask your lender for help.

They must:

  • Listen to your situation
  • Offer reasonable solutions (like payment holidays or reduced plans)
  • Avoid adding unnecessary charges or pressure

This right is especially important if you are classed as a vulnerable customer, meaning you may be more at risk of harm due to personal circumstances. At Marsh Finance, we train our teams to identify and support vulnerable customers with care, flexibility, and empathy.

🚗 The right to voluntary termination, if conditions are met

This is a powerful consumer right that lets you hand your car back and walk away from your agreement, once you’ve repaid at least 50% of the total finance amount (including interest and fees).

Voluntary termination (VT) can be used with:

  • Hire Purchase (HP)
  • Personal Contract Purchase (PCP)

It’s designed to give you an exit if the car is no longer affordable, without needing to pay off the full agreement. There are rules around car condition and mileage, but your lender can walk you through the process.

What this means in real life

If you’re feeling anxious or unsure about your car finance situation, you have legal rights designed to protect you, and a lender has responsibilities to help.

At Marsh Finance, we don’t see people as problems. We see people with stories, and we do everything we can to make sure you’re treated fairly, respectfully, and with care.

A business person ripping a sheet of paper that reads 'CONTRACT', indicating the end of a contractual agreement.

🔁 What Is Voluntary Termination Of A Car Finance Agreement?

Voluntary termination (VT) is a legal right under the Consumer Credit Act. It allows you to end your HP or PCP car finance agreement early, without paying off the full loan, if:

✅ You’ve repaid at least 50% of the total amount owed (including fees and interest)
✅ The car is in reasonable condition
✅ You're not already in serious arrears

You return the car, walk away, and owe nothing more (unless there’s damage or excess mileage).

Car Keys Handover

🔙 Can I Return A Car If I've Just Bought It?

If your car was purchased on finance and has serious faults or doesn’t match the description, the Consumer Rights Act 2015 gives you the right to:

  • Reject it within 30 days for a full refund, or
  • Request a repair or replacement within 6 months

This applies to both HP and PCP agreements. However, be sure to report the issue in writing and keep records.

A hand writes in a signature area of a document with car keys and a mini car on, representing a car agreement.

📃 Can I Refinance My Car If The Payments Are Too High?

Yes, refinancing can be an option if:

  • Your credit score has improved
  • You’ve built up equity in the car
  • Interest rates have dropped
  • You want to extend your loan term for smaller monthly payments

It’s worth comparing offers or speaking with your lender to see if refinancing can help reduce your car finance costs and ease pressure on your budget.

Want to check out your refinancing budget? Click here to get started.

Remember, depending on your circumstances, refinancing may increase your costs.

A hand holding up a phone displaying a credit score metre, against a background showing a credit score metre.

🚨 Will Missing A Car Finance Payment Affect My Credit Score?

Yes, if a payment is missed and not resolved, it may be reported to credit agencies. This can affect your credit score and future borrowing.

But here’s the good news: if you contact your lender early, you may be able to avoid missed payments entirely by setting up a temporary arrangement or payment plan.

A silhouette of a person helps another person up over a small hill, representing teamwork, partnership and support.

💜 What Support Does Marsh Finance Offer If I'm Struggling?

At Marsh Finance, we offer tailored support for customers facing financial hardship. That includes:

  • Flexible repayment plans
  • Support for vulnerable customers
  • Clear explanations of your rights
  • No judgment… just help

We’ll talk to you like a person, not a problem, and help you navigate your options with care.

A white question mark against a vibrant yellow background.

📞 Where Can I Get Free Help If I'm In Debt?

If your money worries go beyond car finance, help is available from trusted organisations:

These services are confidential, free, and there to help you take back control.

Summary

Car finance is a commitment, but life doesn’t always go to plan. If you’re struggling, your rights and options are there to protect you.

Whether it’s returning the car, asking for support, or exploring refinancing, the key is to act early and ask for help. You’re not in this alone, and you don’t have to figure it all out by yourself.

Need support with your Marsh Finance agreement?
Our friendly team is here to help. Contact us online, or call us to speak to someone who will listen, understand, and help you move forward.

FAQs

What are my rights if I can’t afford my car finance payments?

If you’re struggling with car finance payments, you have the right to ask your lender for support under the FCA’s Consumer Duty rules. This includes fair treatment, tailored repayment options, and help if you're classed as a vulnerable customer. You may also be eligible for voluntary termination of your agreement.

Need support? Contact our team here »

What is voluntary termination in car finance, and how does it work?

Voluntary termination gives you the right to end a Hire Purchase (HP) or Personal Contract Purchase (PCP) agreement early, provided you’ve paid at least 50% of the total amount owed. It can help you return the car and walk away without owing more (as long as the car is in good condition).

👉 Read our full blog: What is Voluntary Termination and How Does It Work?

Am I classed as a vulnerable customer in car finance?

You may be considered a vulnerable car finance customer if you’re experiencing poor mental or physical health, a recent life event (like bereavement), low financial resilience, or difficulty understanding financial information. Lenders like Marsh Finance have a duty to offer extra support in these situations.

Can I return my car if I’ve only just bought it?

Yes, under the Consumer Rights Act 2015, you can reject a car within 30 days if it has serious faults or isn’t as described. After that, you may be entitled to a repair, replacement, or partial refund. This applies to financed vehicles too, including PCP and HP agreements.

Can I refinance my car finance agreement if payments are too high?

Yes — refinancing your car loan can help reduce monthly payments, especially if your credit score has improved or interest rates have dropped. It may involve switching to a new agreement with a longer term or better rate.

What happens if I miss a car finance payment?

Missing a car finance payment could lead to additional charges, late fees, or a negative mark on your credit file. But if you contact your lender early, they may be able to prevent this by offering a payment plan or short-term solution.

Contact our team now to discuss your options »

 

Can I hand my car back and walk away from my finance agreement?

Yes — if you’ve paid at least 50% of your total car finance amount and the vehicle is in reasonable condition, you can hand the car back through voluntary termination. This is a legal right designed to protect borrowers in financial difficulty.

👉 Read: What is Voluntary Termination and How Does It Work?

 

How can I get my finances back on track if I’m struggling with car payments?

Start by reviewing your income and spending, then talk to your lender about possible support options. You might benefit from budgeting tools, debt help services, or refinancing.

👉 Check out our blog: 5 Tips to Get Your Finances Back on Track

 

Will asking for car finance help affect my credit score?

No, reaching out to your lender to ask for support won’t damage your credit score. In fact, it can help protect it by preventing missed payments. Being proactive is always the best step.

Talk to our support team confidentially here »

 

Where can I get free help with car finance debt?

There are several trusted organisations offering free, non-judgemental advice:

These services can help you review your debts, set up payment plans, and explore all your legal options.

 

How do I get support if I can’t afford my car finance payments?

You can get help by contacting your lender directly. At Marsh Finance, we offer tailored support for customers who are struggling, from temporary payment reductions to reviewing your agreement. The sooner you get in touch, the more we can do to help.

👉 Speak to us today via our contact form »

 

What is an early settlement on a car finance agreement?

An early settlement means paying off the remaining balance of your car finance agreement in one go, before the agreed term ends. You’ll need to request a settlement figure from your lender. This can sometimes save you money on interest.

 

Will I be charged fees for ending my car finance early?

This depends on how you end your agreement.

  • With voluntary termination, there should be no extra charges if you’ve paid 50% and the car is in fair condition.
  • With early settlement, your lender may include early repayment charges, though these are often capped.

Check your finance agreement or contact your lender for the exact terms.

 

What happens if my car is damaged and I want to return it?

If you return a car under voluntary termination and it’s not in reasonable condition (as outlined in your agreement), you may be charged for any damage beyond fair wear and tear. It’s a good idea to have the car inspected or take photos before handing it back.

 

Can I switch to a cheaper car if I can’t afford my current one?

Yes, depending on your agreement and how much equity you have, you may be able to part-exchange your current car and move to a more affordable one. Speak to your lender or a car finance broker about your options.

 

What’s the difference between voluntary termination and voluntary surrender?

  • Voluntary termination is a legal right where you can return the car once you’ve paid 50% of the total owed.
  • Voluntary surrender means handing the car back before reaching that 50% mark, but you’ll still owe the remaining balance after it’s sold.

👉 Check Out Our Guide: Voluntary Termination vs Voluntary Surrender, What’s the Difference?

 

Can I still get car finance support if I’ve missed payments?

Yes. Even if you’ve already fallen behind, you still have the right to contact your lender and ask for help. The earlier you do this, the more options you’ll have, including payment plans, support for vulnerable customers, or exploring voluntary termination.

 

Can I get help with car finance if I’m unemployed or on benefits?

Yes, if your circumstances have changed, you may still be eligible for support. This could include reduced payments, payment holidays, or even exploring a refinance or downgrade option. Your lender should assess your situation with understanding and flexibility.

 

Can I keep the car if I settle early?

Yes, if you pay off your agreement in full through early settlement, the car becomes yours outright. This is often a good option if you’re nearing the end of the term and want to avoid ongoing payments or interest.

👉 Read up on car finance settlements here.

 

Is voluntary termination the same for PCP and HP agreements?

The principle is the same, once you've repaid 50% of the total finance amount, you can end the agreement and return the car. However, with PCP, your balloon payment counts toward the total amount owed, so you may need to pay more upfront to reach that 50% threshold.

👉 Explore: What is Voluntary Termination and How Does It Work?

 

Back to top

 
Topics: Car Finance Support & Advice

See all

See all

Subscribe by email