Can I Modify a Car on Finance?
Whether it is alloy wheels, a remap, or something more involved, modifying a car you do not yet own is not as straightforward as modifying one you bought outright. Because the finance company owns the car until the agreement ends, any changes to the vehicle need to be considered in that context. This guide covers what counts as a modification, what your agreement is likely to say, and what it means for insurance and for selling the car later.
In most cases, modifying a financed car without checking with your lender first is a breach of your agreement. Under hire purchase and PCP, the finance company owns the vehicle throughout the term, and most agreements include a condition that you keep the car in its original condition, or only make changes with the lender's permission.
This does not mean every change is off the table. Some modifications are far more likely to be approved than others:
The safest approach is always to check your specific agreement and contact your lender before making any change, however small it might seem, including for modifications in the lower risk category.
When you contact your lender, it helps to be specific: explain what the modification is, why you want it, who will be fitting it, whether your insurer has been informed, and confirm it will not affect the car's safety or reduce its value. Get any approval in writing and keep a copy with your agreement documents.
Modifications cover a wide range of changes, and not all of them carry the same level of risk:
Yes, and this applies regardless of whether the car is on finance. Any modification, even a relatively minor one like alloy wheels or tinted windows, must be declared to your insurer. Undeclared modifications can invalidate your policy entirely, meaning a claim could be refused even for something unrelated to the modification itself.
Performance modifications in particular tend to increase insurance premiums, sometimes significantly, because they can affect the car's value, its likelihood of being stolen, and the cost of repairs. Before making any modification, it is worth getting a quote from your insurer with the modification declared, so you know the real cost before going ahead.
Comprehensive insurance, correctly declared, is required throughout a hire purchase agreement. See: You'll need comprehensive insurance.
If a modification is made without the lender's knowledge or permission and it breaches the terms of the agreement, the consequences depend on what the modification was and how the lender finds out, often at the point the car is returned, sold, or part-exchanged.
For more on the consequences of breaching your finance agreement, see the section "What happens if I break the terms of my finance agreement?" in our guide on can someone else drive my financed car.
If you are buying a used car that already has modifications, this is a different situation to modifying a car after taking out finance. The car's condition at the point of purchase is what the finance agreement is based on, so existing modifications are part of the vehicle as financed, not a breach of the agreement.
What does matter is making sure any existing modifications are declared on your insurance from day one, and that the modified value of the car (which can be higher or lower than standard, depending on the modification and buyer demand) is reflected accurately when arranging cover.
If you are looking at a used car and want to check its history before financing it, including any past write-off markers, our guide on how to check if a car has been written off covers what to look for.
If you have made modifications to a financed car and want to sell or part-exchange it before the agreement ends, the modifications become part of what the car is worth, for better or worse. Some modifications add value to the right buyer. Others, particularly anything unusual or poorly fitted, can make a car harder to sell and may reduce its value compared to a standard equivalent.
If the modified car is worth less than the outstanding finance because of the modifications, this adds to any negative equity you might already have. Our guide on selling a financed car covers how settlement and negative equity work when selling.
If modifying isn't something your current finance agreement allows, or you are looking to buy a car that already suits how you want it, AutoMoney Trust offers hire purchase finance from £4,000 to £25,000 over 36 to 84 months with no deposit required. We consider applications from people with poor credit. Check your eligibility on our apply for car finance page with a soft search that will not affect your credit file.
On a Hire Purchase agreement with AutoMoney Trust, legal ownership of the car does not transfer until you have made all monthly payments and paid the £199 Option to Purchase Fee at the end of the term. Until that point, the vehicle remains the property of AutoMoney Trust, which means you cannot legally sell or modify the car without our agreement, and the car may be at risk if payments are missed. You are still responsible for tax, insurance, MOT, and maintenance throughout the agreement. Once the final fee is paid, ownership transfers and the car is fully yours.
Fully comprehensive insurance is required throughout your finance agreement with AutoMoney Trust, because the vehicle legally belongs to us until your final payment is made. Comprehensive cover protects both you and the lender against damage, theft, fire, and accidents, ensuring the asset is protected for the full term. It is typically more expensive than third party or third party fire and theft cover, so factor this into your monthly running costs when budgeting. Many drivers also consider GAP insurance, which covers the difference between an insurance write-off payout and the outstanding finance balance.
All cars depreciate over time, with most used vehicles losing value steadily across a finance agreement. This matters because by the end of your term, the total amount paid, including interest, may be more than the car's market value. Depreciation also affects negative equity risk: if you want to sell or settle early, the car's value may not cover the outstanding finance balance. Mileage, condition, service history, and demand all influence how quickly a car depreciates. GAP insurance can help cover the gap between a write-off payout and your outstanding finance.
Yes, under section 99 of the Consumer Credit Act 1974, you have a legal right to voluntarily terminate your hire purchase agreement once you have paid at least 50% of the total amount payable. If you have paid less, you can still apply, but you would need to cover the difference. You must return the vehicle in reasonable condition and clear any arrears. Voluntary termination may still appear on your credit file. If you are unsure whether it is right for you, speak to our team before proceeding, as other options may be available.
