Car finance early settlement calculator: what will it cost to pay off early?

Thinking about paying off your car finance early? Your lender will quote you a settlement figure — the lump sum that clears the agreement. Use our calculator to estimate yours in seconds, then read on to see how the number is worked out and whether settling early makes sense.

What is an early settlement figure?

An early settlement figure is the amount you would need to pay today to clear your car finance in full — the outstanding balance, plus a small amount of extra interest the rules allow the lender to charge, minus the future interest you no longer owe. Once it is paid, the agreement ends and the car is yours outright.

It is almost always less than simply adding up your remaining monthly payments, because those payments include interest you avoid by paying early.

How is the settlement figure calculated?

UK lenders follow a statutory calculation set out in the Consumer Credit (Early Settlement) Regulations 2004. In plain English:

• Your outstanding balance is worked out from what you borrowed, the interest rate, and the payments you have already made.
• The lender can set the settlement date up to 28 days after you ask for the figure — and add one further month if your agreement runs for more than 12 months. In practice that means up to 58 days of extra interest on top of the balance.
• Future interest beyond that date is knocked off. That rebate is why settling early usually saves money overall.

Our calculator applies the same approach, which is why the result is a close estimate — but only your lender can give you the exact, guaranteed figure, and some add their own admin fees.

How do I settle my car finance early?

• Ask your lender for a settlement quote. They must provide one, in writing, for free. It is usually valid for 10 working days or more.
• Check the figure and any fees. Compare it with the estimate above — if it looks far off, ask the lender to explain how it was calculated.
• Pay before the quote expires. Pay after the deadline and the figure is recalculated, usually slightly higher.
• Get written confirmation that the agreement is closed and, on PCP or HP, that you now own the car.

Is settling early worth it?

Usually, yes — if you have the money and no better use for it. The earlier in the agreement you settle, the more interest you save, because interest is front-loaded across the term. It can be especially worthwhile if you are about to change your car: settling (or part-exchanging with the settlement figure factored in) frees you to buy the next one without carrying old finance across.

Two things to weigh up before you commit:

• Emergency savings come first. Clearing cheap finance while leaving yourself with no buffer can cost more later.
• Partial settlement is an option too. You can overpay a lump sum without clearing the whole agreement — the lender must reduce your interest accordingly, either shortening the term or lowering the payments.