Toyota Financial

Toyota Financial is the car finance arm behind Toyota, Lexus and Mazda dealerships in the UK. It lends money for buying cars and leases cars to customers through Toyota Centres, using three main types of agreement: personal contract purchase (PCP), hire purchase (HP) and contract hire. Each one gives you a different route to driving a Toyota, Lexus or Mazda: monthly payments towards ownership, or a rental-style lease you hand back at the end.

The most important thing to understand about all three products is who owns the car. On PCP and hire purchase, the finance company owns it until you have made the final payment, so you cannot sell it without written permission¹. On contract hire you never own it at all: you are renting the car for a fixed period and must hand it back at the end².

Because these are regulated credit and hire agreements, you have statutory rights at every stage, from cooling off to handing the car back³.

Car finance from Toyota Financial: PCP, hire purchase and contract hire

Toyota Financial's agreements fall into two families. PCP and hire purchase are both forms of hire purchase in legal terms: some creditors use the term personal contract purchase to describe hire purchase agreements for vehicles, and HP agreements are sometimes called PCP agreements when they are used to buy a car¹. Contract hire is different: it is a rental, and you never have an option to buy.

On a PCP, you typically pay an initial deposit and monthly payments that are lower than on hire purchase, because you are only financing part of the car's value. At the end of the term you can return the car, pay a final payment to keep it, or trade it in⁴. On hire purchase, you pay a deposit plus monthly instalments over an agreed term, and the finance company owns the car until you have made the last payment². On contract hire, you hire the car for a set period with fixed monthly payments and hand it back at the end; there is no final payment and no way to own the car².

Because PCP and HP are credit agreements, they sit alongside other ways of borrowing for a car. A personal loan from a bank works differently: with an ordinary loan you own the car before it is paid for and the lender cannot take the car back⁷. The trade-off is that hire purchase and PCP usually let the lender recover the car if you stop paying, which is why the two are treated differently in debt advice and in insolvency. If you are weighing up the options generally, see our guide to loans.

One point worth knowing if the car is written off or stolen: the Financial Ombudsman Service takes the view that where a car is on a PCP or hire purchase agreement, an insurer should provide a new vehicle replacement as long as it was agreed with the finance company⁸. The finance company's position as owner matters in insurance claims as well as in sales.

Who can apply

Toyota Financial does not publish a single eligibility rule in the material this page is built from, but car finance agreements are regulated credit agreements, so the general rules for borrowing apply. A lender will assess whether the credit is affordable for you before lending, and it will usually check your credit file. If you want to see what lenders look at, our guide to credit scores and credit reports explains how the information is collected and corrected.

Because the finance company owns the car during the agreement, applying is not the same as buying outright. You are entering a hire agreement as well as a credit agreement: Toyota Financial's FCA permissions cover entering into regulated credit agreements as lender and entering into regulated consumer hire agreements as owner³. That dual role is why the agreement will set conditions on how you use the car, such as mileage limits, and why breaking them can cost money even if you keep up the payments.

If you are refused finance, or offered a worse rate than you expected, the decision may rest on information in your credit file, which you have a right to see and correct. If you cannot get credit at all, free help is available: MoneyHelper, National Debtline and StepChange can all look at your budget with you before you commit to monthly payments you may not be able to sustain.

Mileage allowances and excess mileage charges

PCP and contract hire agreements set an annual mileage allowance, agreed when you sign. Go over it and you will be charged for the extra miles, typically around 10p per extra mile, payable at the end of the contract⁵. The charge adds up quickly the more miles you go over the allowance.

The charge applies because the finance company has based the agreement on the car's expected value at the end. More miles means a less valuable car, so the excess mileage charge recovers the difference. Advice NI notes that a finance company might attempt to add extra charges based on mileage, especially if it exceeds what they expected, but that if you have maintained your car well they legally cannot impose such penalties⁴. In other words, the contractual excess mileage charge stands, but charges beyond the agreement's terms do not.

The Financial Ombudsman Service has dealt with disputes over exactly this. In one case study, a customer received an invoice for £2,000 for exceeding the allowed mileage under her hire purchase agreement; the finance provider's final response was that the agreement clearly set out the annual mileage cap and so it was entitled to charge her for going over it⁹. The mileage term is one to read before signing, and the allowance is one to set at a realistic level rather than at a lower figure to shrink the monthly payment.

If your driving changes mid-agreement, for example a new job with a longer commute, contacting Toyota Financial before you exceed the allowance rather than after is one way to avoid a surprise bill. Some lenders will review the allowance, though Toyota Financial's own terms are on its website.

The end of a PCP: hand back, pay the final payment or refinance

At the end of a PCP you have three options, and the right one depends on the car's value, your mileage and your finances. You can hand back the car at the end of the term with nothing more to pay if you have not gone over the mileage limit or damaged the car, or you can buy the car by paying the amount left over². The third option is to trade the car in: any value above what you owe can go towards the next one⁴.

Refinancing the final payment, sometimes called a "balloon payment" spread over a further term, is a further possibility if you want to keep the car but cannot pay the final amount in one go. It is a new credit agreement, so it will be assessed on affordability and it extends the time you are paying for the car.

One situation worth knowing about: if you reject the car because it is faulty and the dealer accepts the rejection, the dealer has to refund the finance company rather than you directly. The finance company then has to terminate your agreement and pay you back your deposit plus any payments you have already made, minus any deductions for fair usage¹⁰. This applies to cars bought on PCP, HP or lease¹⁰.

Settling early or making overpayments

You can settle a PCP or hire purchase agreement early. Under the Consumer Credit (Early Settlement) Regulations, early settlement takes place where the indebtedness of the debtor is discharged or becomes payable before the time fixed by the agreement, whether on refinancing, on breach of the agreement, or for any other reason, or where it is discharged in part¹¹. In plain terms: you can pay off the whole agreement early, or make part payments towards it, before the end of the term.

The regulations exist because settling early reduces the interest you would otherwise pay. When you ask for a settlement figure, the lender must calculate it in the way the regulations set out, which gives you a rebate of charges for the remaining period. Ask Toyota Financial for a written settlement quote before making any decision, and check the figure against the agreement.

Part payments work slightly differently from full settlement: the regulations cover sums discharged in part as well as in full¹¹. What a part payment does to your monthly amount or your term is set by the agreement's terms, which are on Toyota Financial's own site, so check there for how overpayments are applied.

Voluntary termination: handing the car back mid-agreement

If you want out of a PCP or hire purchase agreement before the end of the term, the Consumer Credit Act gives you a right called voluntary termination. You can voluntarily terminate the agreement at any time before the last payment is due, provided the lender has not already terminated it⁷. The halfway rule governs what you owe: you need to have paid 50% of the total amount payable under the agreement, otherwise you will need to make up the difference if you want to hand the car back⁴.

When you use voluntary termination, you give the car back and there are no further payments or penalties, and it will not hurt your credit score, so it is a relatively clean break⁴. If you end the agreement yourself, you will owe up to half the agreement, plus any arrears and reasonable charges if the car is damaged⁷. You will not get any payments you have made back².

Voluntary termination is different from voluntary surrender, which is another route a lender may offer. In a Financial Ombudsman Service case study, a customer in financial difficulty was told about an option which would allow her to hand back the car, have it sold, and have the proceeds deducted from the total amount she owed¹². That option leaves you owing the shortfall after the sale, which voluntary termination does not, so the two should not be confused. If you are in difficulty, ask the lender to set out every option in writing.

Commission paid to dealers and how to complain about it

When a Toyota Centre arranges finance, the lender may pay commission to the dealer. Commission arrangements in car finance have been the subject of a major FCA redress scheme. The FCA has gone ahead with a compensation scheme for millions of car finance customers, with payouts under set rules: where the commission was very high, defined as 50% of the total cost of credit and 22.5% of the loan, and another relevant factor of unfairness existed, the consumer receives the commission paid¹³.

The scheme covers hire purchase agreements such as PCPs¹⁴. The FCA publishes a list of lenders covered by its car finance complaints process, and you can search for your lender in the list and use the lender's complaint form, or download the FCA's template complaint letter or email and fill in your details before sending it¹⁵.

You do not need a claims management company to make a complaint: it is free to do it yourself¹⁶. Claims companies charge fees for something you can do directly, and if you are unhappy with the conduct of a claims company you can complain to the FCA¹⁷. The Finance & Leasing Association, whose members are regulated by the FCA, also advises that complaints about a lender be raised formally with the lender¹⁸.

The volume of commission complaints has been enormous. The Financial Ombudsman Service processed 21,500 new complaints about motor finance commission in Q1 2025/26, down from 36,000 in the last three months of 2024/25¹⁹. By Q3 2025/26 it received 400 new complaints, compared with 2,200 in Q2 2025/26 and 14,400 in the same period a year earlier, and it resolved 7,100 complaints about motor finance commission in that quarter, mainly about fixed commission²⁰.

If you fall behind on payments

Missed payments on a car finance agreement have consequences that build in stages. The lender will contact you after you miss one or two payments and should discuss ways to catch up and pay the arrears². Continuous non-payment can result in formal notices of arrears and, after 3 or 4 missed payments in a row, a default notice⁴. If you keep missing payments, the lender can take further action to collect the debt and recover the car, possibly using a debt collection agency or applying for a county court judgment².

On lease or hire agreements, the finance company can take the car back if you miss payments². On hire purchase and conditional sale, it can take the car back without going to court if you have paid less than a third of the agreement². Beyond a third, it needs a court order, which is a protection worth knowing about.

The most important step is to talk to the lender early. In one ombudsman case study, a customer struggling to repay his car finance agreement was let down by the way his situation was handled, and the ombudsman told the finance company to take back the car, cancel the remaining finance amount, correct adverse entries on his credit file and refund his £500 deposit with interest, with the customer paying something towards his use of the car²¹. In another, the ombudsman found the options had not been properly explained to a customer who wanted to exit a hire purchase agreement early because of financial difficulties¹². Lenders are expected to work with customers in difficulty, and complaints are upheld when they do not.

Free, impartial help is available: see our guide to debt for where to get it. Business Debtline advises that if you are behind with these payments, or if you have a Motability car, you can contact it for advice²². If you are considering insolvency, the treatment of the car depends on the agreement: vehicles bought on hire purchase or conditional sale do not belong to you until the last payment has been made, and a logbook loan is treated differently again, with the official receiver possibly selling the vehicle or allowing you to keep it depending on its value²³.

Managing your agreement and making a complaint

To manage your agreement day to day, contact Toyota Financial using the details on its website, www.toyota.co.uk³. Keep your agreement number to hand: it is on the documents you signed and on correspondence about the agreement. If you want to change your monthly payment date, contact the customer support team and ask; lenders can generally move the collection date so it lines up with your pay cycle.

To make a complaint, the process is the same as for any regulated financial firm. First complain to the company involved: it has eight weeks to investigate and give a final response²⁵. If you do not get a final response within eight weeks, or you are unhappy with the response, take the complaint to the Financial Ombudsman Service, which is free, using its complaint form²⁵. The ombudsman can look at complaints about car finance, including complaints about commission²⁶.

For complaints about the car itself rather than the finance, the route is different: Which? explains how to complain about a car dealer, and if you bought your car with a finance package or a lease, the car technically belongs to the finance company, which should be able to help you through the process⁵. In Northern Ireland, Consumerline can refer complaints to the Trading Standards Service for investigation or to the FCA, which authorises lenders²⁷.

Beware of scammers posing as lenders. Warning signs include something that sounds too good to be true, being contacted unexpectedly, being asked for personal or bank information, not being given long to make a decision, and being asked to keep quiet²⁸. The FSCS lists similar red flags: being asked for money or payment details, messages from unusual channels such as WhatsApp, and phone numbers or email addresses that do not match the firm's website²⁹. To check you are dealing with a legitimate lender, search the FCA's firm checker and use the contact details listed there, not the ones given to you³⁰.

Is Toyota Financial regulated?

Yes. Toyota Financial Services (UK) PLC is authorised by the FCA under reference number 310226³. Its permissions cover entering into regulated credit agreements as lender and entering into regulated consumer hire agreements as owner³. You can check its status yourself on the FCA Register using that reference number. The company is active, incorporated on 26 September 1988, company number 02299961³¹. As a member of the Finance & Leasing Association, it is regulated by the FCA¹⁸.

Being authorised means your agreement carries the statutory protections described throughout this page: the right to settle early with a rebate of charges, the right to voluntary termination at the halfway point, protection from repossession without a court order once a third of the agreement is paid, and access to the Financial Ombudsman Service if things go wrong. For more on how the system works, see our guide to consumer protection and to financial regulation.