Representative Example: You could borrow £10,699 over 60 months with an initial payment of £495.89 (including £199 Admin Fee) followed by 58 monthly payments of £296.89 with a final payment of £495.89 (including optional £199 Option to Purchase Fee). Total amount repayable will be £19,012,40. 26.1% APR, annual interest rate (fixed) 13.3%.
What if my financed car turns out to have problems?
If you’ve bought a car on finance and it starts showing problems, you’re not alone. Whether it’s a mechanical fault, hidden damage, or something that just doesn’t feel right, it can be stressful and confusing. The good news is that you have rights, and there are steps you can take to sort things out. This guide answers the most common questions about what happens when a financed car has issues.
If your car develops a fault soon after purchase, you have consumer rights, especially if you bought it using car finance like hire purchase or PCP. The first thing to do is report the issue as soon as possible. The sooner you raise the problem, the stronger your position.
If it’s within the first 30 days, you may have the right to reject the car and get a full refund under the Consumer Rights Act. After 30 days but within six months, you may still be entitled to a repair or replacement or even a partial refund if the issue can’t be fixed.
Make sure you contact both the dealer and your finance company. Because you bought the car on finance, the lender can help to try and resolve the issue. This means you don’t have to deal with the dealer alone. Keeping notes and any evidence of the fault will help the lender or finance broker get the issues resolved.
If you bought a car on finance and it turns out to have problems, you have protection under the Consumer Rights Act 2015. This law says the car must be:
Faults can include things like mechanical problems, electrical faults, or additional features not working properly, such as air conditioning, parking sensors, or infotainment systems.
You have the right to reject the car and ask for a full refund if a fault appears within the first 30 days of ownership. After 30 days, you may still be entitled to a repair or replacement, and if the issue can’t be resolved, you might get a partial refund.
These rights don’t cover issues like general wear and tear that would be expected based on the car’s age or mileage, or cosmetic damage inside the car such as worn interiors.
Yes, you can ask to cancel your car finance agreement if the vehicle turns out to have a serious problem. This is known as rejecting the car. It’s your legal right if the fault makes the car unfit for use, dangerous to drive, or not as described when you bought it.
To cancel, contact your finance company in writing and clearly explain the problem. Include photos, garage reports, or anything else that supports your case. The finance company may investigate and ask the dealer to inspect the car. If the complaint is accepted, the agreement will be cancelled, and you’ll return the car without needing to make further payments.
If you’ve had the car for more than 30 days, you may only be offered a repair or replacement. If the issue continues even after repairs, you may still have the right to reject it.
Avoid stopping your direct debit without approval, as this could harm your credit score or lead to missed payments being reported.
Not every issue means you need to reject the car or cancel your finance agreement. Minor faults can happen, especially with used cars, but they still matter and you don’t have to just accept them.
If the dealer described the car as being in great condition or recently serviced, and you later discover a problem that doesn’t match that description, you may be entitled to a repair or a partial refund.
Even if the fault seems small, you should report it. Start by speaking to the dealer and giving them the chance to put things right. If they refuse or ignore you, contact your finance company. Since they legally own the car until you’ve paid off the agreement, they may step in to help resolve the issue.
Make sure to keep a record of the problem, when it occurred, and any conversations or messages you’ve had with the dealer. This can be helpful if the complaint has to be escalated later on.
If the car has issues and the dealer refuses to help, you still have options. Start by contacting your car finance provider. Since they technically own the car until you finish paying off the agreement, they are jointly responsible for making sure it was sold in a satisfactory condition.
Explain the issue clearly and share any evidence you have, such as a mechanic’s report, photos, or messages from the dealer. Your finance provider should investigate and may offer a repair, refund, or even cancel the agreement if the problem is serious enough.
If you're not happy with their response, you can make a formal complaint through their complaints process. And if that doesn’t resolve things, you can take your case to the Financial Ombudsman Service (FOS). They offer a free and independent review and can make a decision that the finance company must follow.
Unfortunately, you can’t return a car just because you’ve changed your mind. If there’s no fault and the car matches the description at the time of sale, you’re still responsible for keeping up with the finance payments.
However, if your situation has changed, for example, due to job loss or financial difficulty, there may be other options available. It’s always best to contact your finance provider as soon as possible to explain what’s happened. They may be able to offer support, such as a payment break or a more affordable plan, depending on your circumstances.
If you’ve raised a complaint and feel it hasn’t been resolved properly, you can take further action. Start by contacting your finance company directly, they must treat your complaint fairly and explain your options.
If you’re still not satisfied, you can take your complaint to the Financial Ombudsman Service. You can also get support from Citizens Advice or a legal adviser if needed.
It’s important to act quickly, keep records of all communication, and be clear about what outcome you’re seeking, whether that’s a repair, refund, or cancelling your agreement.
