Can I change my car on PCP early?

Swapping cars on PCP at Dick Lovett

Personal contract purchase (PCP) is a great way to get funding for your car if you don’t have the cash available. And if you’re in positive equity in your PCP agreement, you can use this as a part exchange for your next car.

Positive equity happens when your car’s current value is more than the amount left on your loan. For more information on how this works, we go into more detail below.

There’s high demand for used cars at the moment, so there’s never been a better time to consider an upgrade with plenty of part exchange deals at Dick Lovett. Trade in your PCP car early (with equity) for a brand new vehicle with money off. Or if you are just looking to sell, we’re always on the lookout for used cars & offering great prices so don’t hesitate to get in touch.

Swapping cars on PCP at Dick Lovett Image 1 Swapping cars on PCP at Dick Lovett Image 2

Even though PCP is one of the most popular car finance types, there are still a lot of questions around how it works.

One of the main ones being “can I change my car on PCP early?” Yes you can, by following these quick and easy steps:

  • Contact your lender and ask for a finance settlement figure
  • Get your car valued (use our quick & convenient Sell My Car form)
  • Subtract the settlement figure from your car’s current valuation

If you’re left with a positive number at the end of the sum, you’re in equity and you can put this towards your next car. A negative number means you’ll have to pay that back on top of the cost of your next car.

For a more detailed step-by-step guide, and why you must complete each step, explore our guide below.

Types of car finance:

Learn more about PCP and HP finance options, how they work and how you can upgrade your car early on both.

PCP Early Upgrade & Part Exchange

PCP Early Upgrade & Part Exchange

PCP stands for Personal Contract Purchase. This finance option is flexible with an optional balloon payment at the end if you want to own the car. PCP typically has lower monthly payments compared to HP, making it an attractive choice. PCP contracts typically last between 12 and 48 months in total.

Once your PCP agreement comes to an end, you can either:

  • Return the car
  • Purchase the car by paying the balloon payment (also known as the Guaranteed Minimum Future Value)
  • Part exchange your vehicle for a new model on a finance agreement (PCP or HP)

It’s important to keep in mind that any damage or mileage over the agreed limit may incur additional charges.

It’s quick and convenient to get a PCP early upgrade, so you don’t have to worry about being locked in for the full duration of your agreement. If you want to trade in for a newer vehicle you can easily do so if you are in positive equity or prepared to pay any outstanding difference.

Hire Purchase

Hire Purchase

Hire Purchase, or HP, is another popular type of finance for those who want to own the car at the end. Contracts typically last between 12-60 months, with your monthly payments covering the full cost of the car. Once your agreement ends, you fully own the vehicle.

Some HP agreements have an option to purchase fee at the end, which covers the cost of transferring ownership to you and is outlined clearly in your agreement.

At the start of the agreement, you put down a deposit (typically 10% of the car’s value) and pay monthly from there. Unlike PCP, you won’t be hit with any charges for wear and tear or going over your annual mileage limit.

The process for upgrading your car with a HP agreement is the same as it is for PCP. Find the full steps below for swapping a car on PCP.

Swapping a car on PCP: The Settlement Fee

If you’re looking into swapping your car on PCP, here’s everything you need to know about the process.

PCP early upgrade process

The process of trading in your PCP car early is simple.

Step 1: Contact your lender and get a finance settlement figure (this is how much you have left to pay on your agreement.) Note this number down.

Step 2: Get your car valued. Use our Sell Your Car valuation system for a fast & accurate price. Note this number down.

Step 3: Subtract the settlement figure from the valuation price of your car. This will show how much equity is in your vehicle. A positive number, or positive equity, means you can use this value as part exchange when you upgrade your car, or you can have it as cashback. Negative equity means you’ll have to pay this figure on top of the cost of your next car, so it might be a good idea to keep your current car a little longer.

Example of the PCP Settlement Fee

Positive equity:

Finance settlement figure £10,000
Car valuation £12,000
Equity £2,000


​£12,000 - £10,000 = £2,000

Negative equity:

Finance settlement figure £10,000
Car valuation £7,000
Equity -£3,000


£7,000 - £10,000 = -£3,000

The best time to swap a car on PCP?

If you’ve had a car from new on PCP, it’s best to wait until later in your agreement for its value to even out. Certain brands and models will hold their value over time, so it’s worth researching before you get a car on PCP.

The best time to swap your car on PCP is in the final year of the agreement, as this is typically when your car’s value starts to break even and gain equity. Keep your eye on the market and make sure to regularly value your car too.

There are a few things you can do to make sure that your settlement fee is as low as possible.

  • Cars that depreciate slowly: Look for models that depreciate slowly. This includes fuel-efficient engines, newer models/facelifts, cars with longer waiting lists. Anything sought-after
  • Used & nearly new cars: With a nearly new car that’s one to three years old, there’ll be less of a drop in value by the time you want to trade up
  • Five to eight-year-old cars: Eight-year-old cars have pretty much hit that sweet spot in terms of value. So if you don’t mind sacrificing the latest features (although you’ll be surprised at what you can find equipped in an older car) you can get yourself a really good deal in the long run
  • Take care of your car: This is a simple one, but often overlooked. Keep the cabin clean and take care of the paintwork with regular washing. Make sure to stick to your servicing schedule too as this helps retain value
  • Keep the miles down: Your car’s mileage has a massive impact on its value. If you can, keep your annual mileage under 10,000 for best results

Trading in a PCP car early during COVID

Things are different during COVID times. There’s an increased lead wait time for all new vehicles, meaning that used car values are going up and up. Especially for cheap to run models.

Many are now finding they’re in positive equity in their PCP agreement due to used car values being higher than ever. So if you’re after a new car, or even if you don’t need a car due to a lifestyle change because of COVID, there’s never been a better time to cash out.

This won’t last forever. So if you’re thinking of trading in your PCP car, make sure to get involved ASAP.

M135i Rear Exausts

PCP & HP from Dick Lovett

Get your next PCP or HP car deal from Dick Lovett. We accept trade-ins of PCP cars and we can create a bespoke PCP or HP finance package to fund your next vehicle.

We represent some of the most iconic performance & luxury car brands with dealerships located all across the South West of England. Locations include Bath, Bristol, Swindon, Hungerford, Melksham, Tewkesbury & Cardiff.

Dick Lovett is a family-run business and the longest-serving BMW partner in the country. We have over 50 years experience of selling cars with first-class customer care to prove it. And we only offer the best service possible at all of our dealerships, whether you’re after a new car or you’re booked in for a quick service.

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