Can I modify my car on a PCP finance agreement?

  • Modifying a car on PCP isn’t simple
  • Lending company remains the legal owner of the car until balance is paid
  • Changing too much can cost you dearly

Plenty of motorists enjoy modifying their cars – whether that be as simple as hanging an air freshener from the interior mirror or as complex as tuning the engine.

However, plenty more motorists purchase their cars through a finance plan, such as Personal Contract Purchase (PCP) or Hire Purchase (HP) – and where those lines cross, there can be a problem. That’s what one YouTube personality found out after heavily modifying a BMW M4 with various body and engine upgrades; BMW sent out a letter threatening to recall the car if the finance was not settled.

Riccardo Senior, better known as the face of the YouTube channel LivingLifeFast, had his finance agreement cancelled by BMW following a series of pricey modifications - watch his video here.

An unmodified BMW M4 with 444hp

Senior had installed a hybrid turbocharger, a performance exhaust system and methanol injection. As a result, the car was reportedly producing as much as 720hp – a huge increase from the standard 444hp. It was also fitted with various body modifications. As a result, BMW demanded the full payment of the remaining balance within a week, and threatened to repossess the car if it wasn't paid.

In the contract Senior would have signed, BMW states that: “Until the Vehicle is returned to us at the end of this agreement or you become the owner of the Vehicle, you must not alter the Vehicle in any way without first obtaining our prior written consent, and if we consent you must restore the vehicle to its original condition (at your cost) before returning the Vehicle to us.”

At the time of writing, Senior had not posted an update on his situation.

Does the finance company still own the car?

When thinking about modifying a car, it’s important to know the distinction between ‘Owner’ and ‘Keeper’. Generally, if you buy a car on finance, you’re the registered keeper of the vehicle, giving you the right to use it and ensuring correspondence goes to the right place – if you get a speeding ticket, for example.

Modified Porsche Cayenne

However, until the balance of outstanding finance is paid in full, the lending company remains the legal owner of the car. This means they can place conditions on your time with the car such as mileage restrictions, when and where it’s serviced and yes, whether it can be modified.

Can I make minor modifications?

If this has got you panicking about changing anything at all on your vehicle, don’t worry. Minor modifications – reversible ones, that is – are absolutely fine. Anything you can remove is fair game, so if you want to install items such as seat covers, phone holders, or sun blinds, you’re good to go.

Changing consumable items is also fine – so you don’t need to worry about switching out items such as bulbs or tyres, though you may have to use approved parts.

Anything more extreme than this, you will have to contact your lender and get their permission. Remember, the finance company owns the car and its interest will be protecting its investment. Any modification that could negatively impact the car’s resale value will likely not be approved. Think of it like renting a flat: you can put any items of furniture you like inside it, but swap out the shower for a jacuzzi tub and your landlord won’t be best pleased.

What happens if I break my contract?

As with the case of Riccardo Senior, finance companies can make life pretty difficult if they suspect you've modified your car beyond the terms of your contract. In the most extreme cases, they can demand full payment of the remaining balance - this could be anything from a few thousand pounds on a cheaper car to tens of thousands if financing something more expensive.

Mazda 3 modified

Most of the time, however, a finance company will have little way to tell whether you've modified your car. Instead, they'll find out about the modifications at the end of the PCP deal - and that's likely to cause problems if you intend to hand the car back or trade it in. Most will insist that the car is returned to factory spec before being handed back.

If you intend to purchase the car at the end of the agreement, then your modifications will present no issue. But financial circumstances can change, and it's probably best not to make modifications on the assumption that you'll pay a substantial balloon payment in 2-3 years time.

Read the contract carefully

As with all major financial commitments, it’s important to read your contract very carefully. If it states that you must not modify the car, there’s not likely to be a huge amount of wiggle room – most manufacturer finance providers sell vast numbers of cars and really don’t need to concern themselves with individual exceptions.

If you’re intent on buying a car to modify, then you may need to resort to a personal loan. This may not offer as competitive a rate as a PCP agreement, but you will be both the owner and the keeper of the car – allowing you to modify it to your heart’s content.

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