When you take out car finance, it’s important that you understand how your agreement works. One part of this is your settlement figure.


Everyone gets excited when they pick up their new car. Whilst we don’t want to be party poopers, if you have taken out car finance, it’s important you understand how to end the agreement when the time is right for you.



How can I obtain my settlement figure?


Obtaining a settlement figure means asking your lender how much is left to pay on your finance agreement.


You might be thinking of changing your car, or you may have decided to pay off your finance balance early. Either way, you will need to contact your lender using the details on your finance documentation.


Your lender can provide you with your settlement figure over the phone, via email (which can take 2-3 days) or by post (which could take 7 or so days). Your settlement figure is valid for 14 days from the date you request it. Once you have paid your remaining balance, the finance company will confirm in writing, and it is important that you keep this letter in a safe place.


What your settlement figure means


Most of the time, your settlement figure will be less than the value of your car. The difference between your car’s market value and the settlement figure can be used as a deposit towards a new car, or as cashback.


When the value of your car is less than the settlement figure, the difference in values is known as negative equity. This often occurs where people change their car early into their finance agreement and have only paid a small deposit.


If you do have negative equity, you can opt to pay it off. Alternatively, some lenders will accept a small amount of negative equity on a new finance agreement.


If you have any questions about obtaining your settlement figure, our car credit specialists are here to help!