Can you modify a car on PCP finance?

Wheels, tow bars, and even floor mats count as modifications. But can you modify a car on finance?

John Evans
Jan 24, 2022
Audi RS5 Sportback rear view

If you have a car on finance you might be wondering what freedom you have to make it your own. Well, seeing as during the process of a car finance deal the car is owned by whoever is lending it to you, you don't really have much at all.

Just as you might redecorate or extend your house when you get bored with it or want to improve it, so you might also be tempted to modify your car. It may be something practical like fitting a tow bar, or a simple aesthetic change like fitting new wheels to it, or perhaps you're a little more ambitious and you want to increase the performance of the engine or change the car’s appearance with a body kit or a vinyl wrap.

That’s all fine if you own the vehicle, but if you're halfway through paying off a finance agreement or a loan, you could be in serious trouble and at risk of having your contract terminated. In this scenario, best case they take the car and you are left wanting, worst case they demand you pay the full value of the vehicle up front - that could be tens of thousands of pounds.

Read on for more details on the issues surrounding modifying a car on finance.

Can I modify a car on finance?

When you take out a finance deal on a new car, you are essentially borrowing the money to pay for it, so ownership of that car stays in the name of the lender until the end of your agreement, whether that's by completing all of the monthly payments in the case of a Hire Purchase contract, or paying the optional final payment if you're using PCP (Personal Contract Purchase).

In the majority of cases, for that entire period where you are driving the car but not the registered owner, you are not allowed to modify the car under any circumstances. Some finance providers will allow customers to modify a vehicle, but you must receive consent in order to do so. After consent has been given, and before the customer returns the car, it must be restored to the condition it was in when the finance contract started.

If you paid outright for the car using cash or an unsecured bank loan then you become the registered owner and are free to modify it in any way you wish. However, if you were to default on your loan payments, the lender could seize the vehicle or other property to recoup its money. Even then, they may not make enough on disposal to settle the outstanding loan (perhaps if the car has been modified), so you might still end up with outstanding debts.

What constitutes a modification on car finance?

Anything that changes the appearance or specification of the car when it was originally acquired constitutes a modification. We’ve already mentioned major changes such as increasing the car’s performance or fitting new wheels, but upgrading the radio, fitting video screens, or fitting a towbar would also constitute a modification.

A spokesman for BMW Finance told BuyaCar that even swapping the bespoke mats that come with the M Sport pack for another item would constitute a modification. BMW's finance agreement appears to cover any modification, small or large, although the spokesman said changing so-called consumables such as tyres would not be regarded as a modification.

The ins and outs of car finance

The most important point here is that the finance company retains ownership of the car until you have completed the payments of your finance contract. With a PCH (Personal Contract Hire), you do not (and will not have the chance to) own the vehicle, making it similar to a long-term rental. Here, it is unlikely that you will be able to make any modifications to the vehicle.

Be sure to understand the agreements on mileage and the expected condition of the car, as well as modifications, and how they apply not only at the end of the agreement but during it. This is because, at all times during the finance agreement, the car must be worth its predicted value should it need to be disposed of.

Make sure all this is clearly explained to you before entering into the contract – and on no account modify the car without the consent of the finance company.


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