Car finance ‘half way’ scandal that’s leaving people trapped in debt


Buying on finance may be your only option if you want to drive a decent ­car that would otherwise be out of your league.

Typically it means spreading the cost over three or four years. But during lockdown, some motorists have seen a nasty flipside and shared their stories with me.

One reader, Jo, purchased her Ford Fiesta on finance in 2019, taking out a two-year agreement.

Before she entered into it she asked if the agreement could be ­terminated early if she could.

She was told it could, either by paying the finance off or by ­terminating when she reached “half way” through the agreement, at which time she would simply give it back.

Sadly she lost her job. When she tried to hand her wheels back in May, exactly halfway through the agreement, she was shocked when they knocked her back.

The finance company was within its rights to say no because the law, ­section 99 of the Consumer Credit Act, states you can terminate a credit agreement only when you have paid half the total credit.

But the relevant point here is that Jo, from Reading, was led to believe it was when she reached half way in time.

Many people have fallen into this same trap and in my view it is misrepresentation. I have advised Jo to lodge a claim with the Financial Ombudsman Service.

Another reader, William, bought his dream Land Rover Discovery in 2018 through a three-year ­finance agreement.

Back in February he tried to part-exchange it, only to find the ­negative equity was £22,000. That was the amount ­outstanding under the finance agreement, less the value of the car.

William, from Newcastle, was shocked by this, given the fact that the agreement had only nine months left to run.

Back in 2018, Sean purchased a VW Golf also via a three-year finance agreement.

He decided to terminate the agreement early and had paid half the total costs. But he was stung with a £2,539 bill for excess mileage and repairs, such as scratches.

Sean, from Leeds, says it was not explained to him at the outset.

You can see more advice from Dean at


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