On Hire Purchase (HP), you don't own the car until the final instalment is paid. Miss payments and the lender can end the agreement and repossess — though if you've paid a third or more, they need a court order to do so.
On PCP, you're paying for the depreciation of the car during the contract, with a large optional 'balloon' payment at the end if you want to keep it. Repossession rights work in a similar way, and voluntary termination is a right in both HP and PCP agreements after you've paid 50% of the total amount payable.
If you're struggling, talk to the finance company early. Options include refinancing, extending the term, voluntary termination or voluntary surrender. Each has very different consequences for what you owe at the end.
Related reading
Car Finance
Voluntary termination of car finance: how it works
If you've paid at least half of the total amount payable, you can usually hand the car back and walk away.
ReadCredit Cards
Why minimum payments keep you in debt for longer
Minimum payments protect your credit file but barely touch the balance. Here's what's actually happening each month.
ReadCredit Cards
When it's time to stop using a credit card
Warning signs that a card has stopped being a tool and become a trap — plus practical next steps.
ReadCredit Cards
Balance transfers: when they help and when they hurt
A 0% balance transfer can buy you breathing room, but only if you can clear the balance before the deal ends.
Read