PCP Equity Check: How to Calculate Your Position and What to Do Next

If you're driving on a PCP deal, you're probably paying monthly and not thinking too much about the numbers behind the scenes. But there's a figure that could be worth thousands to you — or cost you money if you ignore it. That figure is your equity position.

Here's what it means, how to check it, and what to do with it.

Quick PCP equity check (3 steps):

1. Get your settlement figure from your lender (online portal or phone — see lender contacts below)
2. Get your car's current value from We Buy Any Car or Motorway
3. Subtract: Market value − Settlement figure = Your equity

Positive result = positive equity. Negative result = negative equity. That's it.

What is PCP equity?

Your equity position is simply the difference between what your car is currently worth and what it would cost you to settle your finance today.

• Positive equity — your car is worth more than your settlement figure. If you sold or part-exchanged it, you'd pocket the difference.
• Negative equity — your car is worth less than your settlement. If you ended the contract now, you'd owe money on top.

Most PCP drivers are in negative equity for the majority of their contract, particularly in the first two years. This is normal — depreciation front-loads the drop in value, while your settlement figure drops more slowly as you pay off interest.

How to calculate your PCP equity

You need two numbers:

1. Your settlement figure

This is the amount you'd need to pay your finance company today to own the car outright. It's not the same as your remaining monthly payments — it also accounts for any outstanding interest. See how to get it from your lender below.

2. Your car's current market value

Two useful benchmarks:

• We Buy Any Car (WBAC) — the guaranteed floor. They'll actually pay this amount, same day.
• Motorway, AutoTrader private sale — the realistic ceiling if you sold it yourself.

Your true equity sits somewhere between those two numbers depending on how you exit the contract. For part-exchange at a dealer, expect something between the two.

The calculation:

Equity = Market value − Settlement figure

If the result is positive, you're in positive equity. If it's negative, you're underwater.

Worked example:

In this example, exiting the contract today would require covering a £2,800 shortfall. If the same car were worth £16,000 instead, the equity would be +£800 — meaning you could sell or part-exchange and walk away with cash.

You can also use our free PCP equity calculator to work this out alongside your mileage position and VT progress.

How to get your settlement figure

Your lender must provide a settlement figure within a reasonable time by law. Most provide it instantly online. Here's how to get it from the main UK lenders:

• Black Horse — log in at blackhorse.co.uk or call 0344 824 8888. Online quotes are usually available 24/7 and valid for 28 days.
• Santander Consumer Finance — log in at santanderconsumerfinance.co.uk or call 0333 202 9791.
• Close Brothers Motor Finance — call 0333 321 6060 or log into your online account.
• Moneybarn — call 01202 828 828 or log in online.
• Volkswagen Financial Services / Audi Finance — log in at vwfs.co.uk or call 0800 069 9842.
• BMW / MINI Financial Services — log in at bmwfinancialservices.co.uk or call 0370 5050 100.

The settlement figure is usually valid for 28 days. After that you'll need to request a fresh quote as interest accrues daily.

Note that settlement figures can include up to 58 days of extra interest on top of the outstanding balance — this is allowed under the Consumer Credit Act. For a full breakdown of how settlement figures are calculated, see our guide to PCP settlement figures.

When does equity turn positive?

There's no single answer — it depends on how fast your car depreciates versus how fast your settlement figure falls. But there are some common patterns:

Typical timeline for a 4-year PCP:

• Year 1: Deep negative equity. The car drops 15–25% in value in the first year, while you've barely touched the settlement figure (most of your early payments are interest).
• Year 2: Still negative, but the gap is narrowing.
• Year 3: Many contracts begin approaching neutral equity around month 30–36, particularly if the car has held its value well.
• Year 4: Most PCP deals move into positive equity in the final 6–12 months — this is by design, as the GMFV (balloon payment) was set at a level the manufacturer expected to remain below market value.

What affects it:

• Car type — premium brands and EVs can depreciate faster or slower than expected
• Mileage — higher mileage than forecast accelerates depreciation
• Market conditions — used car prices rose significantly during the 2021–23 chip shortage, pushing many drivers into positive equity earlier than expected; the reverse can happen too
• Your deposit — a larger upfront deposit means less to pay off and a lower settlement figure throughout

If you want to track this in real time rather than checking manually, EquityGo lets you log market value readings and see your current equity position — upgrade to Pro to see the full trend over time.

What to do if you're in negative equity

Being in negative equity doesn't mean you're stuck, but your options are more limited:

1. Wait it out The simplest option. Most PCP contracts move toward positive equity as you approach the final year. If you don't need to exit early, continuing payments is usually the right call.

2. Use Voluntary Termination If you've paid 50% of the total amount payable, you can hand the car back under Section 99 of the Consumer Credit Act — regardless of your equity position. You won't receive anything, but you won't owe the negative equity shortfall either. See our full VT guide for eligibility and how to do it correctly.

3. Part-exchange with a dealer Dealers will often absorb small amounts of negative equity into your next finance deal. This effectively rolls the shortfall into your next contract — be cautious here, as you can end up compounding negative equity across multiple contracts.

4. Pay to settle early You can settle the finance at any time, but if you're in negative equity you'll need to cover the gap out of your own pocket. Only makes sense if you have a strong reason to exit the contract — job change, moving abroad, or the car is costing too much in running costs.

Avoid: rolling large amounts of negative equity into a new deal. This is how some drivers end up persistently underwater — each contract starts with a built-in deficit from the last one.

What to do if you're in positive equity

Positive equity gives you options worth acting on:

1. Part-exchange toward your next car Tell the dealer your settlement figure and the car's estimated value before they make you an offer. If you lead with "I've got a PCP, just take it" they'll absorb the equity into their margin. Knowing your numbers means you can negotiate properly.

2. Sell privately and settle separately Private sale typically achieves a higher price than part-exchange. You'd use the proceeds to settle the finance (or settle first, then sell — check your finance agreement, as some lenders won't allow a sale before settlement). The difference is yours to keep or use as a deposit.

3. Buy the car outright at settlement If your settlement figure is significantly below the car's market value, you can pay it off and either keep the car or sell it. This is rare but does happen — particularly with cars that have depreciated slower than the lender expected.

4. Simply hand it back at the end If you don't want to keep the car or roll equity into a new deal, you can just return it at the end of the contract. You won't receive the positive equity — it benefits the finance company, not you. Worth knowing so you actively choose this rather than defaulting into it.

What about Voluntary Termination?

VT is a separate right under Section 99 of the Consumer Credit Act. Once you've paid 50% of the total amount payable, you can return the car with nothing more owed — regardless of your equity position (subject to fair wear and tear, and any clearly-disclosed excess mileage charges).

It's worth noting that VT isn't about equity at all. It's a right based purely on payments made, not on the car's value. You can be in positive equity and still use VT (though it would usually make more sense to sell), or be in negative equity and use VT to exit without covering the equity shortfall.

VT does not affect your credit score. It will appear on your credit file as "Voluntary Termination" rather than a default or missed payment, but this is not a negative mark. For everything you need to know, read our complete guide to Voluntary Termination.

How to track it without the spreadsheet

Manually calculating your equity, mileage pace, and settlement position every month gets tedious. EquityGo lets you enter your contract details once and tracks your equity position, mileage vs your annual allowance, and VT progress automatically — with trend charts and end-of-term projections on Pro.

Try the Android beta — free to use, with the full Pro plan locked in for life during the early-adopter period.

The short version

1. Get your settlement figure from your lender (see the list above)
2. Check your car's value on WBAC and Motorway
3. Subtract settlement from market value
4. If negative — that's normal; wait, or consider VT if you've hit 50%
5. If positive — you have options: part-ex, private sale, or buy outright
6. Track it over time so you're not caught off guard near the end of your contract