Financing is a great way to get a new, reliable car without shelling out tens of thousands of pounds upfront.  

However, one slight issue may occur when the car gets damaged or breaks. One of the worst ways this can happen is a blown engine. If this happens, staying calm, assessing the damage, and planning your next steps is critical.  

In this article, we’ll provide some help and advice on what to do if your engine blows while your car is still on finance. No more Googling ‘car on finance engine blown.’ You’ll find everything you need to know here. 

Your rights when a motor blows up on a financed car 

You are permitted to give back a financed car, taken out on a PCP or HP deal, as long as you’ve paid over 50% of the total finance cost.   

Unfortunately, in order to give back a car early, it will need to be in reasonable condition. If the finance company takes back a car and the engine is damaged, they are very likely to seek costs from you.  

So, if you’re thinking ‘my engine blew and I still owe money,’ jump to your three main options below.  

What Next? 3 options for a financed car engine failure 

If you have a blown engine on a financed car, there are a few different ways to minimise the loss if your engine has blown, but you can’t afford to repair it outright. You can:  

• Pay for the car to be fixed using a car repair loan  
• Sell the car as is to a garage/mechanic or scrap yard 
• Strip the car for parts yourself  

Let’s go over these options in more detail below. 

Before making your decision  

Before deciding on the options below, ensure you’re cool, calm, and collected. A financed car with a blown engine is stressful, and it’s vital not to make rash decisions to protect your finances. 

Take a minute to assess the situation. Call a friend or family member for a second opinion if needed. 

1. Car repair loans  

Whilst a bank loan or credit card may be the first thing that comes to mind, there are far superior options available, especially with interest rates at the current levels.  

Car repair loans with 0% interest are much friendlier to your finances. They allow you to address the problem without dropping your credit score. 

Bumper offers interest-free monthly car repair loans. The money goes straight to the garage, and you can split the cost into multiple manageable payments, which can be a big help if you need to repair your car.  

2. Sell the car to a mechanic or for parts  

If your car on finance needs a new engine, there are loads of companies and individuals that look for broken cars to buy. They have the space and know-how to fix them. If the car is not worth fixing, they may dismantle it and sell it for parts.  

This is often a more feasible option if your car is not very old, but it would still be worth a bit if it was in working condition. 

Various online marketplaces allow bidding. This method would probably yield the highest price. Alternatively, some companies buy cars in any condition — including engine failure on a financed car. These are often less hassle as they deal with the paperwork and admin for you.  

3. Strip the car for parts  

If you have the space, time, and knowledge to safely dismantle your car, you could make more than you would sell by stripping it down and selling the bits.   

Be warned, though, that this is not an easy or quick process, and you have to be prepared to arrange for the sale of parts and remove them yourself. Unless the car is a particularly rare example, you may be left with half a vehicle on your drive for months!  

If your car's finance engine has blown, the last thing most want to do is strip their car. So, consider this option carefully and ensure you have the time and resources before starting. 

Should you contact your lender? 

Yes. If your financed car has any problems, you should contact your lender immediately. They need to know about the car’s value changes and your ability to make payments. Often, they have strategies and procedures to help in these situations. 

Can I trade in a financed car with a blown engine? 

It’s rarely possible to trade in a financed car with a blown engine. But it’s not impossible. Sometimes, dealerships and lenders will accept trades. However, they’ll first assess the car’s value and damage.  

Note that a trade may not cover your outstanding finance balance. In this case, you’ll have to pay the outstanding difference.  

You’ll also have to be prepared for a lower trade-in value since the engine failure will have devalued your car. 

Is it worth fixing a blown engine?  

To determine whether your car is worth fixing, it's necessary to check how much the car would be worth if it was in working order. You need to get multiple quotes to fix the car's issue.  

Another consideration is how much it would cost to replace the car with one that is like for like, as this may be more than what your vehicle could be worth due to availability and market trends.   

Financially it's probably worth fixing a blown engine as long as the parts are available from a breaker or dismantler, as a new engine will often be more expensive than the value of the car.  

How to get insurance to cover a blown motor 

Whether or not your insurance covers a blown motor depends on your personal policy. Before you contact your insurance, review your policy to see if it covers mechanical breakdown coverage. If this isn’t included, you won’t be able to claim for the problem.  

However, some insurers allow add-on policies for these situations. Contact your provider for more information, but make sure you have your policy details on hand before calling. 

How much to replace a blown engine  

Like any repair, the cost will vary greatly depending on the car's age, make and model, and where you are located in the country.  

See the list of prices below to give you an idea of how much it’s likely to cost:  

Cost to replace an engine with a new one:  

• Small/city car — £4,500 - £6,000  
• Medium/economy car — £5,000 - £7,000  
• Large/luxury car — £5,000 - £9,000  

Cost to replace an engine with a secondhand or refurbished one:  

• Small/city car — £1,000 - £3,000  
• Medium/economy car — £1,500 - £3,000  
• Large/Luxury car — £2,500 - £4,000  

How much can you get for a car with a blown engine?  

Wondering what to do with a car with a blown engine? 

As mentioned, there are a few options for selling a car with a blown engine, but how much you can get will depend on the car's condition, age, and desirability.   

Generally speaking, most people who will fix your broken car to sell themselves will want to pay the sale price of an equivalent working car, minus the cost of replacing the engine, the above prices would be a useful indicator of this.   

If your car is in good condition and was initially expensive, you will have a much better chance of getting a premium price for your broken car.   

What option is best when my engine is blown? 

Because everyone's situation is different, it’s advisable to gather all the information you need before you make an informed decision. So we advise you to do the following: 

• Research what it would cost to buy a replacement car 
• Get a valuation from a garage/breaker for buying the car as is  
• Get a quote to fix the engine 
• Visit a site like Bumper for an idea of how the cost of fixing your car could be made affordable.   

Car on finance engine blown - The takeaway 

Dealing with a financed car and a blown engine is challenging, but several solutions are at your fingertips. From assessing the damage and repairing parts to working with your lender and insurance, you can find an answer that meets your needs. Ensure you are honest and communicate clearly throughout the process for the best results and a positive outcome. 

Split the cost of repairs into interest-free monthly repayments and find a reliable garage in your area.