Car leasing and PCP finance agreements are increasingly popular, but they create a different ownership structure that affects your ability to scrap the vehicle. Understanding your position is important before contacting our car scrapping service.
Who Owns the Car?
With leasing (PCH) and PCP finance, the finance company owns the vehicle, not you. You are essentially renting the car for an agreed term. This means you cannot legally scrap it without the finance company’s consent because you do not own it. Our scrap yard checks every vehicle for outstanding finance as part of our standard process.
Lease End Options
At the end of a personal lease, you simply return the car to the leasing company. If the car is in poor condition, you may face damage charges, but the vehicle is not yours to scrap. The leasing company decides its fate — often it goes through their own remarketing channels or to a licensed facility like our breakers yard.
PCP End Options
PCP offers three choices at the end of the agreement: pay the balloon payment and own the car outright, hand it back, or use any equity as a deposit on a new car. If you pay the balloon and take ownership, you can then freely scrap the car if it is no longer worth keeping.
HP Finance
Hire Purchase is different — once you have made all payments, ownership transfers to you automatically. At that point, you can scrap the car freely. If you want to scrap before the HP is fully paid, you will need to settle the outstanding balance with the finance company first.
What If My Financed Car Is Written Off?
If your financed car is involved in an accident and written off by insurance, the insurer pays the finance company directly. If the insurance payout is less than the outstanding finance (known as negative equity), you are responsible for the difference. GAP insurance protects against this scenario.
Unsure about your finance status? Contact us for guidance. We check finance on every vehicle. Free quotes at our quote page.