Returning a car on finance due to faults
Cars are one of life’s bigger purchases, and whilst finance agreements can make it easier to spread the cost, they are in themselves a huge commitment. So what happens when there is something wrong with a car you’ve bought on finance? You are well within your rights to reject a car that you have purchased through a finance agreement if there is a fault with it. Stormcatcher Law can help guide you through this process.
You have rights when it comes to faulty cars on finance, but it is a complex area; we are here to help you avoid the pitfalls so many consumers fall into. Whether it is a right-to-repair issue, broken beyond repair, or something that will require the financial ombudsman, we can help.
We have many years of experience in helping people with car finance claims for faulty cars. We can provide advice, and deal with the sellers and finance company to ensure that you get the result you need.
Free Initial Legal Advice For a Faulty Car Bought on Finance
What do I do if I bought a faulty car on finance?
Have you ever wondered about your rights concerning a faulty car on finance bought from a dealer? Numerous online forums offer advice on how to address the issue, yet merely 30% of consumers see their complaints validated by the financial ombudsman. Why the discrepancy?
A widespread belief is that you can simply return a malfunctioning car on finance within 6 months of its receipt. Others think that booking their vehicle into a local dealership for repair and sending the bill to the seller is the way to go. Both assumptions are wrong.
Whether your goal is to have your faulty car on finance fixed, or to return it, you should get a health check at a reputable dealer. Recognising the exact issue is vital for your next steps.
The fact that it might need repairs or part replacements doesn't automatically classify the vehicle as being of unsatisfactory quality, granting you the right to a repair or return.
This dynamic can result in customers bouncing between the car dealer, finance broker, and the finance company, each pointing fingers at the other. If you've acquired a defective car on finance and feel stranded, it's time to consult a car finance specialist.
Right to Repair
The right to repair or replace is what most car buyers seek. The law acknowledges that issues arise and expects dealers to rectify them. This premise raises several questions:
- Can sellers employ second-hand components?
- Is it permissible for the dealer to utilize my warranty to cover repair costs?
- Is the use of the warranty mandatory?
- What’s a reasonable repair duration? Regardless of the proceedings, always keep your finance company in the loop—preferably in written form./cl/
Your car on finance is broken beyond repair: what's next?
Three scenarios can lead to the return of a car on finance:
- A defect manifesting within 30 days of delivery, termed as the short-term right to reject. This is arguably the trickiest grounds for a return due to the evidence required.
- Post the initial repair, the car's issue persists or a new fault emerges. Does a different defect than the original qualify for a return?
- The vehicle can technically be fixed, but the effort is either disproportionate or cannot be done without causing significant inconvenience or beyond a reasonable duration.
A prevalent query revolves around the feasibility of returning a car on finance after the six month mark and the associated legal intricacies.
Like all legal scenarios, the success in returning a car on finance hinges on the strength of evidence and apt application of laws. Relying on consumer rights, where the dealer must demonstrate that your car's issue wasn't present at purchase, can be a risky proposition.
What Our Customers Are Saying
What counts as a fault with your vehicle?
A fault is anything that prevents your car from operating normally. This could be anything from engine problems or gearbox malfunctions, to issues with the window operation, steering, or suspension. The car should meet standards that would be reasonably expected from a car of its age, mileage, and price, matching the description it was sold under, and the purpose it's expected to perform. It’s not just a car beyond repair on finance that you can reject.
Examples of major faults include:
- Recurring engine stalling, which could happen as stalling in traffic, or present as rough idling, or failure to start
- Slipping gears, which includes difficulty shifting, delayed acceleration, or sudden gear changes that make the vehicle unsafe or undrivable
- Power steering malfunction, which can present as heavy or unresponsive steering due to faults in the electronic power steering system, hydraulic leaks, or sensor failures
- Persistent electrical faults such as non-functional headlights, dashboard warning lights staying on, or immobiliser failures that prevent the car from starting
- Critical safety defects, such as faulty airbags, defective seat belts, malfunctioning ABS, or braking system failures
You cannot request a refund for minor faults, though the seller is obligated to fix them. Blown bulbs, problems with the air conditioning, small undisclosed scratches or dents, or slight wear to the brake pads are all a little annoying when taking delivery of a new-to-you car. However, they are not faults through which you can reject the car.
Cancelling Car Finance Due to Faulty Car
Faulty cars bought on finance: what are your consumer rights?
Consumer rights protect you if the car you’ve purchased on a finance agreement turns out to be faulty, and it will do so for up to six years. Under the Consumer Rights Act 2015, the vehicle you have bought needs to be satisfactory in its quality, and should be fit for purpose. This means that you can take action in accordance with this legislation if the car malfunctions, or is otherwise in unsatisfactory order.
It is worth noting though that the longer you have the car, the harder it is to prove claims of fault. Normal wear and tear comes into play, and it could be tricky to hold the dealer responsible.
Engaging the Financial Ombudsman for faulty car on finance
If your plea to return a car on finance gets declined, your next recourse is the Financial Ombudsman Service (FOS). The Ombudsman is a complimentary service designed to assess and rule on grievances related to consumer-regulated finance agreements. Familiarity with effective complaint lodgement and case preparation are key; to optimize your chances of a successful faulty car return, treat the complaint process with the rigor of a court case.
Assuming the Ombudsman is inherently on your side or possesses car finance expertise could be a mistake. This is particularly pertinent for claims exceeding £10,000, where the FOS offers a more economical alternative than court proceedings.
Although consumers aren't bound to the Ombudsman's decision and can resort to legal action, litigation costs might be daunting.
Cancelling car finance due to faulty car
Should your claim to the Financial Ombudsman be successful, the finance company may be obligated to fix the car, or concur with your decision to reject the car on finance and rescind the agreement.
This could mean refunding your deposit, reimbursing monthly instalments, covering incurred expenses, and interest.
The benefits of using Stormcatcher Law for rejecting a faulty car on finance
Specialising in disputes such as those with car dealers and lenders means we know the industry inside out, and can draw on our experience to get you the outcome you deserve. A trusted consumer rights lawyer for finance disputes, such as those at Stormcatcher Law, can handle both new and used car complaints and claims, with a straightforward, knowledgeable approach that gives car owners confidence in pursuing their case.
Litigation is an expensive and stressful process to go through; avoiding it whilst pursuing a positive outcome for your car rejection is our priority. We have a track record in settling car finance disputes outside of the courtroom, and take pleasure in helping complainants avoid this ordeal.
With automotive law specialists behind them, our clients feel empowered and well-equipped in successfully rejecting a car on finance.
Call About Making a Complaint to The Financial Ombudsman
Our car finance lawyer
Stormcatcher Law is led by Philip Harmer, a lawyer and arbitrator that possesses unparalleled knowledge of the automotive industry. His insight, expertise and straight-talking approach mean he can pursue positive outcomes quickly and effectively; he simply knows the cars, the rules and the motor trade inside out. In short, Philip is the person to have on your side when you are rejecting a car on finance.
Why choose Stormcatcher Law for returning a car on finance?
If you are looking to reject a car on finance, the reasons to choose Stormcatcher Law are simple:
Industry expertise and experience
With a deep understanding of car finance disputes, dealer practices, and lender regulations, we know how to navigate the system to get the best outcome for you.
Stress-free resolution
We prioritise settling disputes outside of court, saving clients time, money, and stress while still achieving successful car rejections.
Specialist legal support
Led by an automotive law expert, we provide clear, knowledgeable guidance, giving clients confidence, and the best chance of success in their case.
Cancelling Car Finance Due to Faulty Car
Should your claim to the Financial Ombudsman be successful, the finance company might be obliged to fix the car or concur with your decision to reject the car on finance and rescind the agreement.
This could encompass refunding your deposit, reimbursing monthly installments, covering incurred expenses, and interest. Naturally, a range of outcomes is plausible, but it’s feasible to reject the vehicle and recuperate your funds.
Return a Car On Finance
Contact The Car Lawyer for First Free Legal Advice
Getting a refund for a faulty vehicle on finance after 6 months - FCA rules v Consumer law 2015?
Want refund for a faulty vehicle bought on finance after 6 months from sale can be difficult because of the interplay between the Financial Conduct Authority rules and the law. If you have tried to reject your car you have probably been told by the dealer and car finance firm that under the Consumer Rights Act 2015 the burden of proof lies with you to prove that the car was not of satisfactory quality and fit for purpose at the point of sale. But does this mean the finance company does not have to comply with FCA rules to investigate your complaint.
Watch on YouTube
More in this series.
-
Rejection achieved for faulty Mercedes AMG GT 63
The Consumer Rights Act explains that if a vehicle becomes faulty (more than a minor fault) within 6 months of delivery, it is presumed to have been faulty from the outset. On the other hand, the dealer or finance company can potentially provide evidence which proves the vehicle wasn’t faulty on delivery, or that the…
-
Rejection upheld by Ombudsman for Range Rover Sport fire
Being involved in a situation where your car spontaneously catches fire is a frightening experience. Vehicle fires are fierce, causing significant damage to both the vehicle and adjacent property. For vehicle owners, the shock and distress are only matched by the surprising difficulty in getting car dealerships, manufacturers and finance companies to accept liability. Often,…
-
Claim settled: a missold Mercedes-Benz
Faulty car litigation can be a very expensive, lengthy and stressful process. Because of this, strategy, experience and specialist knowledge of the subject vehicle, which in this case is a Mercedes-Benz car, can prove decisive. This is never truer than when you’re up against a defendant who is an experienced car dealer specialising in buying…
-
Refund settlement negotiated for Toyota Land Cruiser 300 Sahara 3.3D
Because the legal rules are different when something goes wrong with a vehicle bought for and by your business, disputes can be tricky. However, it’s not easy to disclaim liability for misrepresentation especially if the supplying dealer has clearly falsely described something. This was the case involving a Toyota Land Cruiser 300 Sahara imported from…
-
Dealer agrees to refund for a Jaguar DPF problem they failed to fix
People say they can fix the problem with a DPF- a diesel particulate filter- not regenerating properly and becoming blocked, by replacing it and that the effects of poor historical servicing can be reversed. They’re wrong. When you complaint about the vehicle going into limp mode, exhaust gases entering the cabin and the dashboard lighting…
-
Buyer success with motorhome dealer dispute
It has been said that 80% of claims and disputes are resolved on the evidence. But determining what is evidence and who bears the evidential burden of proof is not always as easy as it sounds. It is a central principle of English law that the person making a claim or complaint bears the burden…
-
Refund secured for faulty motorhome
If you return your motorhome to the supplying dealer because of restricted performance and an engine management light coming on and the dealer tells you that they can’t find a fault with it, what are your rights if the problem occurs again, and a fault is found? Can the customer reject the motorhome or are…
-
Buyer refunded for faulty Volkswagen camper conversion
A motor dealer which promotes itself as being a specialist in converting and selling VW Campervans and Transporter vans can’t be surprised if customers hold them and their products to a higher standard than a standard dealership. If the quality doesn’t meet that standard, and the dealer doesn’t deal with complaints properly, they can’t be…
-
Cloned car sale leads to full refund for buyer
Car cloning is a fraud and is the process of disguising the identity of a stolen vehicle by using the number plates, VIN and logbook of a legitimate vehicle of similar make and model. In short, there will be more than one car on the road with the same ID. This is what happened in…
-
Car Finance company decision overturned by the Financial Services Ombudsman.
Establishing who bears the burden of proving the various aspects of a legal case is often more challenging than it appears; get it wrong and you could be asked to prove something you don’t have to or worse, something you can’t prove, like a negative. This is at the centre of this case involving a…
-
Finance agreement unwound because of a failed repair
The reliance on vehicle inspection reports by Automotive Consulting Engineers, commonly known as ACE, and reports by car finance companies has become part and parcel of investigating faulty car complaints. But these reports have come to be interpreted as fact rather than evidence, and have become determinative of whether to uphold a complaint or not…
-
FOS upholds refund complaint for failed Jaguar F-Pace engine after twelve months.
Car finance companies and car dealers commonly rely on expert evidence from vehicle inspection firms to determine whether to uphold or decline vehicle quality complaints. Mostly, no one actually reads the report, focussing instead on the conclusion, “We do not consider the condition to have been developing at inception.” But engineer reports aside, surely common…
-
Car rejection based on the issue of reasonable time and significant inconvenience- a success story
Under s23 Consumer Rights Act, the trader must complete the repair free of charge, within a reasonable time and without significant inconvenience to the customer. But what constitutes a reasonable time and significant inconvenience? In law, this is not defined, apart from taking account of the nature of the goods and the purpose for which the…
-
Successful rejection of remapped and modified Mercedes AMG C63
Vehicle modification and remapping are widespread and often not declared by the seller, leaving the buyer none the wiser until something goes wrong. By which time, if outside the 6-month Consumer Rights Act, it can be difficult to prove when the car was remapped and modified. This was the basis of Mrs M’s complaint to…
-
Money back for material misrepresentation of Bentley Continental GT bought from a luxury car dealer
Because of potentially punitive repair and maintenance costs, provenance is central to the desirability and market value of high-performance and luxury cars. This leads most people preferring to buy from specialist car dealerships for peace of mind and a greater degree of certainty about the servicing and maintenance costs. It was precisely this reason that…
-
Financial Ombudsman upholds the right to reject Alfa Romeo Giulia Quadrifoglio
It is a widespread belief that the offer or supply of a courtesy mitigates the requirement (a) to complete vehicle repairs in a reasonable time and without significant inconvenience and (b) refund monthly finance payments. CA Auto Finance shared this view, and that as the attempted repairs on the Alfa were carried out under the…
-
Cancelled Bentley Bentayga bought by a distance sale contract
Distance selling regulations were brought in to increase retail opportunities beyond the geographic limitations of the trading premises, but also while protecting interests of consumers from either mis-selling or mis-describing goods when buying online, and they have a 14-day cooling-off period. These issues are at the centre of this case involving the purchase of a…
-
Complaint upheld for Approved Used BMW Hybrid Electric range depletion
Concerns about second hand Hybrid and electric vehicle battery range because of high voltage battery degradation presents a significant concern for buyers. The problem is that although EV batteries lose capacity and range over time there is little or no information about the rate they lose charge and by how much the electric range depletes.…
-
Car Dealership refunds the cost of repairs to BMW 530e plug-in hybrid
Have you been told you can’t claim from the selling dealer the cost of unauthorised car repairs by a main dealer? The idea behind this is twofold: Some car dealers and their lawyers have interpreted the law to mean that they have a right to repair a car which is become faulty after 30 days…
-
Negotiated settlement of Jaguar F-Pace mileage discrepancy dispute
Evidence is pivotal to all legal claims and disputes, but what constitutes evidence, what has to be proven and by who often misunderstood. This is never truer that in cases involving car finance complaints and especially those which are made outside the six months of purchase. This was the central issue in this case involving…
-
Money back for Range Rover Sport 3.0SDV6 crankshaft bearings failure
When it comes to cars and car engines, low mileage doesn’t always mean low risk and long life, and just because you’ve bought a warranty doesn’t mean it’s worth the paper it’s written on. As the risk of owning a Range Rover increases so does the willingness decrease for warranty companies and dealerships to comply…
-
FOS upholds rejection of Range Rover 3.0D Hybrid
The interaction between statutory and legal rights, used car warranties and manufacturer guarantees is often a bone of contention between dealerships, finance companies and customers. Almost without exception, where the buyer has owned the car for 7 or 8 months the trader will suggest liability under the manufacturer’s guarantee for a particular part will take…
-
Dealer declines responsibility for Discovery Sport stretched timing chain rejection claim.
A stretched Discovery timing chain can lead to a noisy engine, misfire, restricted performance and potentially engine failure. Ingenium 2.0L Jaguar Land Rover cars seem susceptible to timing chain stretch, but that can be caused by poor servicing and reduced lubrication, whether due to Dpf related issues, oil dilution or blocked oil ways. Car dealers…
-
Consumer’s Right to Reject when Land Rover Discovery engine seized & turbo failed
The Discovery 5 and Discovery sport are prone to early service warnings and the need for the increased frequency of engine oil and filter replacement because of oil dilution. Because oil dilution can lead to accelerated wear and failure of engine parts and ultimately the engine seizing, regular servicing is crucial. If the Discovery has…
-
The Financial Ombudsman upholds the right to reject the Jaguar I-Pace
Introduction This is a case involving a faulty Jaguar I-Pace, an EV, bought by Mr T, from Marshall Jaguar Oxford for around £50.000.00 by way of a 60-month car finance agreement with Jaguar Financial Services (Black Horse). Mr T tried to reject it around 18 months after taking delivery. Black Horse, the finance company, issued…
-
Mr A – Complaint Against Blackhorse
Mr A bought an approved used BMW on finance with Blackhorse for around £15,000. Mr A had the car serviced as required but 2 years after taking delivery of the vehicle the timing chain prematurely failed, causing catastrophic engine failure and requiring its replacement at a cost of around £8,000. The vehicle type had a…
-
Mr A – Complaint Against Alphera
Mr A bought a brand new Range Rover Velar from a dealership on finance. After a couple of weeks, the vehicle started leaking fuel onto his driveway. Additionally, a fault was reported relating to the vehicle “Incontrol” system which failed to accurately record the fuel level, indicating it to have “half a tank” when empty…
-
Ms H – Complaint Against BMW Financial Services
Ms H bought an approved used ex-demonstrator BMW X6 M50d from a BMW dealership by way of a regulated consumer finance agreement. Around a year later and having had the car serviced in accordance with the manufacturer’s service schedule, the engine suffered catastrophic failure. Subsequent diagnostic testing revealed the car had suffered “flood damage” which…
-
Ms E v MK Auto-Motors Ltd
Ms E bought a 2008 Audi A3 from a dealer MK for £6000. The Audi is fitted with a DSG gearbox which uses the mechatronic system which in effect consists of an electronic control unit attached to the outside of the gearbox which controls the internal dual clutch system. After owning the car for a…
-
Mr U v a Motor Finance Company
Mr U saw a Mercedes-Benz Benz GLS 350d AMG LINE for being offered for sale on Autotrader and went to view it. The Mercedes was 2 years old at the time and it was therefore implied that it had 1 year of the manufacturer’s warranty left, so Mr U agreed to buy it for close…
-
Ms P v Long Term Horsebox Hire Company
Ms P is a successful, prize-winning international showjumper who rides her own highly prized and valuable thoroughbred horses as well as those owned by her celebrity clientele. In the furtherance of her sport, Ms P, required a larger Horsebox with accommodation facilities and decided to hire rather than buy one, simply as even a good…
-
Mrs W v Land Rover Financial Services
Mr & Mrs W bought brand new Land Rover Evoque in 2017 by way of a Hire Purchase Agreement with Blackhorse Financial Services trading as Land Rover Financial Services. Mr & Mrs W also bought a 3 year service plan from the supplying dealer. The Range Rover was serviced a year later in accordance with…
-
Mr & Mrs W (a Financial Ombudsman Service Matter)
Mr & Mrs W bought a brand new Volkswagen Tiguan R-Line 4motion 2.0 Tdi 190ps DSG from a VW Main dealer in March 2017 by way of a regulated consumer HP agreement. On delivery, Mr & Mrs W became concerned about a strange and unusual “grating” noise from the gearbox which they reported to the…
-
Ms H v MotoNovo Finance
Ms H bought a Nissan Qashqai from Witham Vehicle Solutions Ltd for £12000 at the end of 2018 by way of a regulated hire purchase agreement. Soon after taking delivery, the car engine developed a “knocking noise,” a strong smell of fuel from under the bonnet and excessive fuel consumption. Witham Vehicle Solutions inspected the…
-
Mr A v BMW Financial Services
Mr A acquired a brand new BMW 640i M Sport Convertible in July 2018 for nearly £70,000 by way of a hire purchase agreement from BMW Financial Services. Almost immediately after taking delivery of the Vehicle Mr A experienced problems with it which the supplying dealer tried to repair. However, this was just the first…
-
Mr M V Santander Consumer (UK) PLC
Mr M bought a 2011 Land Rover Discovery 3.0L from a car dealer by way of a 60-month conditional sale agreement with Santander consumer finance in March 2018. As a widower, he serviced and maintained the Discovery impeccably, as he needed the Land Rover to make regular trips to the hospital with his young daughter,…
-
Mr M v Wren Prestige Ltd
Mr M bought a Porsche Boxster from Wren Prestige Ltd for around £12000, part-exchanging his BMW. The Porsche was advertised as a low mileage example with around 45000 miles on the clock and having good service history, three services carried out by a Porsche main dealer and two by Porsche specialists. After taking delivery of…
-
Dr C v BMW Financial Services
Dr C acquired a used BMW X5 eDrive MSport plug-in electric hybrid car from a specialist BMW dealership for £31,750 by way of a 49-month hire purchase agreement with BMW Financial Services (BMWFS) in November 2019. The BMW X5 was represented as having a range of up to 31 kilometres (approx. 19 miles) in the…
-
Ms S – Complaint About a Lamborghini
Ms S bought a Lamborghini from a dealer for over £100,000 by way of a hire purchase agreement. Soon after taking delivery Ms S experienced difficulties in starting the car and issues in changing gear and it was returned to the dealer, who in turn submitted it to a Lamborghini main dealer. They performed a…
-
Ms M – Complaint Against Motonovo
Ms A bought a used car for £11,940 from a trader by way of a regulated hire purchase agreement with Motonovo through a third party broker. A month or so after delivery, Ms A reported the vehicle suspension spring required replacement, a suspected oil leak repair, a noisy heater, air conditioning functional issues, anti-roll bar…
-
Mr S – Complaint Against Blue Motor Finance
Mr S bought a used BMW M5 from a dealer for around £28,000, which he financed through Blue Motor Finance. Soon after taking delivery the vehicle suffered a sudden and complete loss of power and engine failure, resulting in it being recovered to BMW specialist. This revealed that the cause was more likely than not…
Faulty Car Bought on Finance FAQ
When buying a car on finance as a consumer you have the protection of a number of consumer law and common laws where the vehicle is faulty, has been missold or misrepresented or you have been misled or scammed.
These legal rights entitle you to a range of legal remedies including the right to repair, rejecting the car or a claim for damages or compensation.
To reject a car on finance, you will need documentary evidence proving the car is faulty, misdescribed or has a hidden history. This should be sent to the finance company along with your written rejection of the vehicle. Once received, the finance company are duty bound to investigate the complaint and provide you with a written outcome.
As a rule, once you have exercised your rejection of the car you should stop driving it. However, you should first obtain expert legal advice which you can obtain via our advice line.
Whilst rejecting a car on finance, it is possible to hire a car to use if the finance company has not supplied you with an alternative vehicle, and claim the cost back from the business. However, you should first obtain expert legal advice on this, which you can obtain from our automotive law expert.
Technically if you reject the car and have good legal grounds to do so then you are demonstrating you no longer wish to be bound by the terms and conditions of sale. However, non-payment of the finance may damage your credit rating, although if you succeed in court or with the Financial Ombudsman this will in all likelihood be rectified. As with all these things, if in doubt, obtain expert legal advice and call The Car Lawyer.
If the car finance company does not uphold your complaint and refuses to accept the return of the car you have the right to escalate the complaint to the Financial Ombudsman or the court. It maybe the finance company has misunderstood your complaint or the evidence you have supplied and has as a result arrived at the wrong conclusion. It may therefore be a good idea to get a second opinion from a specialist lawyer before proceeding.
The Financial Ombudsman Service (FOS) is appointed under the Financial Services and Markets Act 2000 to adjudicate on regulated consumer finance and insurance products. The FOS are tasked to investigate and decide complaints, which finance companies are bound by. Importantly customers have the choice to accept the decision or not, and if they do not, can make a court claim.
Escalating a complaint to the Financial Ombudsman can be done after receiving the final response from the finance company and by completing the online form on their website, sending with it all the evidence upon which you intend to rely. If your finance company does not uphold your complaint it is crucial to consider the reasons why, and get a second opinion before escalating to the FOS.
No, the Ombudsman service is intended to be accessed and handled by the individual. However, the finance company will be a large company with expertise in financial products and likely have a legal department or in-house solicitors.
On the other hand, the ombudsman service does not employ solicitors and there may be a risk of the finance company unfairly influencing the results.
It would, therefore, be sensible to at least get legal advice before submitting your complaint to the Ombudsman service.
About Philip Harmer
Philip studied consumer finance during his master’s degree and led the Finance and Insurance division for Mercedes-Benz Retail Group. His deep understanding of compliance processes, combined with Stormcatcher’s FCA authorisation, allows him to advise on HP, PCP, and insurance mis-selling with authority. He has acted against most major finance providers and is known for securing strong outcomes in complex finance disputes.
He regularly advises on
car finance complaints,
finance-related vehicle defects, and
ombudsman referrals.
Contact Stormcatcher for First Free Advice