Can I modify a car on finance?
Modifying a car can be a fun way to put your personal stamp on it, or even improve its performance. But what if your car is on finance? Whether you can customise it depends on your finance agreement including the type of finance you have, and the kind of changes you want to make.
To clear up any questions you’ve got, we’ve covered everything you need to know about modifying a financed car.
Can I modify a financed car?
This depends on how big the changes are that you want to make, and what your lender’s rules are. Some lenders allow small, reversible modifications, while others do not allow any modifications at all.
Generally, big modifications are never allowed, but you may be able to make some minor changes without incurring fees. For example, you might be able to add a phone holder or seat covers that you can easily remove when you hand the car back.
Before modifying your car, you should always check your agreement thoroughly and get your lender’s permission.
What happens if you modify a financed car without permission?
If you modify a financed car without asking your lender, you may have to pay for any repairs to return the car to its original condition, and you could face additional charges based on the car's changed value or condition. It’s important to check your finance agreement for any specific fees related to modifications.
In some cases, modifying the car could lead to an increase in the outstanding loan balance due to extra fees, potentially affecting your APR. In serious cases, the lender could take back the car for breaking the finance agreement.
What modifications are usually allowed?
The key is whether or not changes are reversible. It's important that modifications do not permanently alter the car. Some small, cosmetic modifications may be more likely to be accepted by lenders, such as:
Seat covers or steering wheel covers you can remove
Parking sensors or dash cams (if they do not damage the car)
Alloy wheels (if they can be swapped back)
However, bigger modifications are usually not allowed, such as:
Engine remapping or performance tuning
Bodywork changes like spoilers or wide-body kits
Lowered or modified suspension
Custom paint jobs
In short, you need to hand the car back in the condition you got it in, so anything that alters that will likely lead to charges unless you have explicit permission from your lender.
Why don’t lenders allow modifications?
Lenders don’t allow many modifications because they want to protect the car’s value. Modifications could decrease its resale value or make it harder to sell when you give it back.
What seems like a good modification to you could be off-putting to a future buyer. Things like the car colour and wheels can impact its resale value, and certain modifications, like lowering suspension, might even increase the likelihood of wear and tear or cause mechanical issues down the line.
The type of finance deal you have can sometimes make a difference in whether or not you can make any custom changes:
Can you modify a car on hire purchase (HP)?
Even though you’ll own the car at the end of your HP agreement, the lender still owns it until you’ve paid it off. For this reason, most HP agreements do not allow modifications without permission. Lenders want to protect the value of the car in case they do need to take it back.
Some lenders may allow small cosmetic changes if you ask, but they may not allow major modifications. If you want to modify a HP car, it’s best to always contact your lender and ask for written permission. Otherwise, simply wait until you’ve paid it off and the car is yours!
Can you modify a car on PCP?
At the end of a PCP deal, you can return the car, make a final payment to keep it, or trade it in for a new one. Because many people choose to return the car at the end of a PCP deal, lenders don’t usually allow modifications.
If you modify a car on PCP, you might have to remove the modifications before returning the car. If they’ve changed the car’s value or condition at all, you’ll likely be charged.
Can you modify a car on PCH?
Since you never own the car with PCH, modifying it is usually never allowed. The car must be returned in its original condition at the end of the lease, except for light wear and tear.
Modifying a car on PCH will likely lead to charges, unless you can remove them before handing the car back. Always check with the lender before making any changes to avoid these.
Can I modify my car if I plan to keep it?
If you plan to keep your car after the finance agreement ends, you might think it’s okay to modify it, especially if you think you’re adding value to the car.
However, you still need to ask your lender for permission. Even if you’re in a HP agreement or you plan to buy the car at the end of a PCP deal, the lender owns it until the final payment is made. If you modify the car before then without permission, you could face a fine because it doesn’t belong to you yet.
The takeaway
If you want to modify a financed car, it’s crucial to check your agreement first, and contact your lender. Some lenders allow small, reversible changes, but most do not allow major modifications. Breaking the rules could lead to extra costs or even losing the car. If you do want to make any changes to your car, it may be wise to make sure you get permission first.
It’s important to consider whether the cost of modifications and the risk of penalties fit within your overall financial situation. If you're unsure whether modifying your car fits within your finance agreement or financial plans, we recommend seeking independent financial advice.
Want a change and looking for a different car you don’t need to modify? Get a quote today!
This guide is for informational purposes only and does not constitute financial advice. For tailored advice regarding your finance agreement and any modifications, please consult a financial advisor.