Save Money And Hassle With These Small Steps…

When your Personal Contract Purchase (PCP) agreement is ending, there’s one crucial step left before handing back the keys: the end-of-term inspection. This process determines if your car meets the lender’s return standards or if you’ll face additional charges.

Preparing your car properly can save you from unnecessary fees and a lot of stress. In this article, we’re looking at simple steps to help ensure everything goes smoothly. First, let’s look at some of the basics of PCP.

How Does PCP Work At The End Of Your Term?

You can find out more information about how a PCP works in general in our complete guide; The Only Car Buying Guide You’ll Ever Need. However, here’s a brief overview of the options available at the end of your PCP term;

• Hand The Car Back: Following your end-of-term inspection you can choose to hand the car back to the dealership or finance company with no financial or credit penalties. If you choose this option you will effectively be ‘starting again’ with your car ownership. 
• Buy The Car Outright: At the start of your PCP deal you will have been given an ‘Optional Final Payment’. If you choose to pay this the car is yours and you own it outright. Remember, with this comes total ownership of maintenance and repair too.
• Trade-In: If there is any equity in your vehicle (following your end-of-term inspection) you can use it towards the deposit on your next car. In some cases, finance providers or dealerships may have offers and incentives for continuing with a new PCP.

When Can I Change My PCP Car?

It’s advisable to keep the same car throughout your PCP to completion (where you reach the optional final payment or ‘balloon payment’ stage). However, strictly speaking, there are other options available.

The Consumer Credit Act (1974) means you can end your PCP after you’ve paid 50% of your total finance costs. However, this may incur early termination fees from your finance provider and could result in credit issues in the future.

As well as this, PCPs often factor in depreciation throughout your contract, if you change your car earlier than the end date you may be facing negative equity (where the value of the car is lower than the amount needed to pay off finance), meaning an early termination or trade-in could result in increased costs.

Use our Car Depreciation Calculator, free of charge, for an estimate of how much value your car has lost giving you an insight into any negative equity you could be facing.

Some dealerships and finance companies will consider ‘part exchanging’ your PCP car at an earlier stage, with any negative equity financed through a loan, but this will almost always be more expensive than seeing your contract through to completion.

Under the Consumer Credit Act (1974) You Can Terminate Your PCP Deal After 50% Of It's Value Is Paid. However, There May Be Fees And Further Implications To This.

How To Prepare Your Car For An End-Of-Term Inspection

Start With a Deep Clean

First impressions count, and that applies to your car, too. Give it a thorough clean, inside and out. A spotless vehicle not only looks great but can make minor wear and tear seem less glaring.

Don’t just stop at the car wash; tackle the interior as well. Vacuum carpets, wipe down surfaces, and don’t forget those tricky spots like air vents and cup holders.

Tip: Pay special attention to areas like the boot, seats, and door panels where dirt and scuffs are more prevalent. In most cases, specialist interior wipes (available in supermarkets or car spares) will do the trick.

Inspect For Cosmetic Damage

Lenders understand normal wear and tear; minor scuffs, small scratches, or stone chips are usually acceptable. However, larger dents, deep scratches, or cracked windows may result in penalties. Walk around your car with a critical eye or, better yet, ask a friend to help spot anything you might overlook.

If you find damage that might exceed the lender's fair wear and tear policy, consider having it repaired before the inspection. A minor repair now could cost far less than the fees charged by the finance company.

If you decide to continue with PCP on your next car, consider Scratch & Dent Insurance which provides repair for minor damage without claiming on your regular insurance (and harming your no-claims bonus). This can offer peace of mind, as you know your car will be in good condition at inspection time.

Check The Tyres

Your tyres must meet legal standards. Ensure there’s at least 1.6mm of tread depth across the central three-quarters of each tyre, and check for any visible damage like cuts or bulges.

Remember, tyre tread depth isn’t just an issue for the end of your PCP, failure to meet this standard is an MOT failure and dangerous. Don’t forget the spare tyre if your car has one as that will be inspected, too.

If your tyres are nearing the legal limit, it’s worth replacing them. Using budget tyres can be a cost-effective option, as long as they meet the required specifications.

Wheel damage can also impact your end-of-term inspection, with heavier scratches and scuffs needing repair therefore, costing you. Consider Alloy Wheel Insurance which provides ongoing maintenance against major wheel damage to minimise your risk.

Test The Lights And Electronics

Faulty lights or electronics are easily overlooked but could lead to unnecessary charges. Test all lights, including headlights, brake lights, indicators, and interior lighting. Also, ensure that electronic systems like the infotainment unit, sat-nav, and air conditioning are in working order.

If you notice any issues, a quick trip to your local mechanic might be all that’s needed to resolve them. Some smaller issues such as broken bulbs can even be repaired at home, both most likely much cheaper options than repairing through your dealership.

Review The Service History

Most PCP agreements require you to keep up with the manufacturer’s recommended servicing schedule. Gather all your service receipts and ensure the logbook is fully updated. Missing records can lead to penalties or reduce the car's resale value.

Next time, consider a dealership ‘Service Plan’ which can help spread the cost of servicing and sometimes means you’ll get a discount too.

Tip: If you’ve lost any documentation, contact your service provider; they often keep digital copies you can request.

Check Fluid Levels And Top Up If Needed

Low oil, washer fluid, or coolant levels can be a red flag during the inspection (especially as they will trigger dashboard warning lights) and dealerships may see them as an indicator of further neglect.

These are quick and inexpensive to address, so check and top up all fluids before the big day.

Remove Personal Items

You’d be surprised how often people leave personal belongings in their cars during inspections. Check the glove box, under the seats, and in the boot for any forgotten items. 

Returning the car in a clean, neutral state makes the process easier for everyone involved.

Address Warning Lights

Any dashboard warning lights will be scrutinized during the inspection. Whether it’s a service reminder or a more serious issue like a check engine light, get these resolved beforehand. Ignoring them could lead to hefty repair bills passed back to you.

Read More: Common Car Maintenance Mistakes (That You Need To Avoid)

Verify The Mileage

Every PCP agreement includes a mileage cap (which we’ve covered in greater detail in our blog; Common PCP Mistakes That Could Cost You Money). If you’ve exceeded it, you’ll likely face additional charges.

Double-check your agreement and current mileage to see where you stand. If you’re close to the limit, limit driving the car until the inspection is complete. We also recommend contacting your car finance company or dealership as soon as possible if you think you’re going to exceed your mileage limit; it’s often cheaper to amend your terms during your PCP than to pay surcharges at the end.

Prepare Spare Keys And Accessories

Don’t forget the extras! Lenders will expect all original accessories to be returned, including spare keys, the owner’s manual, and any equipment that came with the car, like a tyre repair kit or removable sat-nav.

Know What’s “Fair Wear and Tear”

Finally, it’s worth reviewing your lender’s specific fair wear and tear policy. These guidelines explain what’s acceptable and what isn’t, helping you focus your efforts where they matter most.

Our Final Word

Preparing for a PCP end-of-term inspection doesn’t have to be daunting. A bit of time and effort now can save you significant costs later. By following these steps, you’ll walk into the inspection with confidence; and, hopefully, walk away without any surprise charges.

Remember, most finance companies or dealerships want to carry on doing business with you, so it’s in their interest too, to be as transparent and fair as possible.

If you’ve found this article useful, please share it with your network. Feel free to message Luke on social media if you have any questions; he’s always happy to help.