Reject a Car On Finance

Rejecting a New or Used Car on Finance

You can reject a car on finance if it is faulty. The Consumer Rights Act 2015 gives you a short-term right to reject within the first 30 days for a full refund and a final right to reject if a repair fails after that. Because the finance company legally supplied the vehicle, it is jointly responsible with the dealer so you can pursue either. Stormcatcher Law acts for owners whose rejection has been refused.

This page is about rejecting a faulty vehicle you have bought on finance, not rejected finance applications. That is a separate issue and not addressed on this page.

Has a car dealer or finance company refused your rejection of a new or used car under consumer rights law? If they have, you are not alone, and our team can help you. Requests for advice on rejecting cars bought on finance keep rising, though the true scale is largely unreported. It’s been estimated that approximately 43,000 people were helped by Citizens Advice in 2023 regarding used car complaints and their rights as used car buyers. In the 2024 Motor Ombudsman report, it stated that demand for help is growing. When the dealer doesn’t listen, and the finance company passes the buck, we step in and pursue the claim on your behalf.

Reasons for Rejecting a Car on Finance

You can reject a car on finance on any grounds that stop it operating normally. Engine, gearbox, steering, suspension or braking problems can all leave a car unfit for purpose. When you buy a car on finance, it should be expected to perform just like any other car of similar age, mileage and price.

Where you cannot reject a financed car is when the problems are minor and the dealer is obliged to correct them. Things such as inconsistent air conditioning, a blown bulb or a small scratch on the door are not, on their own, grounds for rejection. What matters is whether the fault causes the car to fall below the standard a reasonable person would expect given its age, mileage, price and description.

The right to reject is established in consumer law. Our consumer rights specialists regularly advise clients on the consumer law right to reject a faulty car, clarifying when you are entitled to a refund, repair or replacement, and how to see those rights enforced correctly against dealers and finance companies.

Consumer Rights When Rejecting a Car on Finance

The Consumer Rights Act 2015 protects you if the car you bought on finance turns out to be faulty. One important caveat is that this only applies to sales through a trader, not private sales. The car must be of satisfactory quality, fit for purpose and sold as described. You can take action if it falls short of those in accordance with this legislation.

There is a point that trips people up, so we say it plainly: when a car is bought on finance, the finance company has supplied you with the goods and carries the same statutory obligations as the dealer. You have direct rights against the finance company for any breach of satisfactory quality. In certain circumstances under the Consumer Credit Act 1974, the lender is jointly and severally liable for the dealer’s misrepresentation or breach of contract. In practice, that means if the dealer is unresponsive, or has stopped trading, you can bring your claim against the finance company instead.

When you successfully reject a vehicle on finance, the legal remedy is to “unwind” the agreement: the finance company refunds the payments you have made, including the deposit and monthly instalments, and you return the vehicle. If the dealer or lender resists that outcome, it is exactly the kind of claim we pursue.

How to Reject a Car on Finance

The way you reject a car on finance will depend on how much time has passed since the finance agreement started.

Short Term Right to Reject a Car on Finance

You have a statutory right to reject a new or used car on finance within 30 days of taking delivery. If a fault was present when you bought the car, or a problem was developing at that point, and you can prove it, you can reject the car within those 30 days for a full refund. You do not have to accept a repair or replacement first, although you can if you wish.

The right applies against the supplier, which in this case would be the dealer and the finance company, but not the manufacturer.

If the 30-day window is closing, and the dealer or finance company is stalling, tell us. Our team works quickly to help protect your rights.

Final Right to Reject a Car on Finance

If a fault is only noticeable after the 30 days but before you have had the vehicle for six months, you are entitled to a repair or replacement. You can give the dealer the opportunity to repair or replace your faulty car bought on finance. If that is unsuccessful, you are entitled to a refund, although this refund may be lower than the listed selling price as the seller can make reasonable reductions based on the use you have already had from the vehicle.

If the dealer or lender states that more than one repair is necessary, we take on this pushback, holding both parties to the one-attempt rule.

Rejecting a car on finance comparison

Rejecting a Car on Finance After 6 Months

You can still reject a car on finance after six months, but it does come with significant challenges as the burden of proof is now yours rather than the dealers or lenders. Within the first six months, the law presumes any fault was present at the point of sale, and the dealer has to prove otherwise. After six months, it is down to you to show that the defect existed when the car was delivered rather than developing later through misuse or normal wear.

This distinction matters. Proving a fault was there at the point of sale, months and quite often, thousands of miles later may need a report from an independent engineer as well as a clear record of the issue and the attempts made to repair it. The more time that has passed, the more evidence you’ll need.

Because the car was bought on finance, the finance company supplied the goods and is directly responsible for their quality under the Consumer Rights Act. That responsibility does not depend on the value of the car, so it applies just as much to a high-value vehicle. This is the point at which many owners give up, having been told by the finance company and dealer that the law is now against them. It isn’t that straightforward, and that is where our experience helps. We assess whether evidence supports the claim, and where it does, we pursue the finance company to have the agreement unwound.

Can you reject a brand new car on finance?

Yes. You can reject a brand new car on finance, just like you can a used one. They are not exempt from the Consumer Rights Act, and if anything, the standard is higher. A brand-new vehicle is assumed to be in full working order and held to a higher standard of quality than a used vehicle. Where a fault could be argued away on a used car, it is much harder for a dealer or finance company to do this with a new car.

A common tactic is for a dealer to claim that the fault is “within manufacturer tolerance.” Put simply, this is a way of acknowledging a fault but saying this level of fault is acceptable and possibly expected. This is not something that overrides your rights. If the vehicle is not of satisfactory quality or fit for purpose, you remain within your rights to reject it.

New cars also bring an added degree of confusion due to the manufacturer's warranty. The warranty is separate from, and additional to, your rights under the Act. So, if a dealer pushes you towards a warranty repair, your right to reject remains intact where the law allows it. If a serious fault appears within the first 30 days, the short-term right applies to a new car exactly as it does to a used one. When a dealer pushes the tolerance or warranty argument to avoid a rejection, speak to us. We set out the legal grounds and pursue the claim.
How to reject a car on finance

How you reject a car on finance depends on how long you have had it, but the core steps remain the same. Rejection is a legal solution for a breach of contract, not simply a request, so it must be expressed and evidenced to take effect.

1. Stop using the vehicle where practical: Continued use could weaken any rejection claim, particularly within the 30-day window.
2. Notify in writing, within the window: Set out the fault and state clearly that you are exercising your right to reject. Do this within 30 days for the short-term right, or promptly when a repair has failed.
3. Notify the finance company, not just the dealer: Because the lender supplied the goods, your rejection must reach them too. Notifying only the dealer is a common and costly mistake.
4. Gather evidence: Keep the finance agreement, all correspondence, service and repair records and where possible, an independent engineer's report confirming the fault.
5. Set out your legal grounds: State which right you are relying on (short-term or final) and why the car breaches the Consumer Rights Act. A formal rejection notice or letter before action holds more weight than simply asking for a refund.
6. Record deadlines and responses: Note when you gave notice and chase written replies, so any delay or refusal is documented.
7. Escalate: If the dealer or finance company rejects your claim, the next step is the Motor Ombudsman, the Financial Ombudsman Service or legal action.

If the dealer or finance company refuses your rejection at any stage, instruct an automotive lawyer to write a formal letter on your behalf.

Rejecting a car purchased privately and not on finance

Private purchases are far less protected. The Consumer Rights Act does not apply to a sale between two private individuals, and the principle of caveat emptor, buyer beware, largely governs. That said, the Misrepresentation Act 1967 still offers some cover, because a private seller must not misrepresent the car in the advertisement or in what they tell you.

For example, if a private seller failed to disclose damage from a previous accident, serious service history issues or a change of owner, you may be able to reject and pursue legal action if they refuse to take the car back. The same is true if the car is not roadworthy. If the car is not as described, you can claim the difference between what you paid and what the car is worth or request the cost of putting it right.

Why rejecting a car on finance is difficult

Rejecting a car on finance is rarely straightforward. Dealers and finance companies handle these claims every day and are well practised in resisting them and using various terms to confuse you and make you believe you have no legal grounds to pursue. Because the finance company is jointly responsible for the car’s quality, pursuing the lender is often the more effective route if the dealer fails to communicate or ceases trading.

Independent expert advice helps

The dealer will not accept your rejection on your say-so or on a recital of the Consumer Rights Act. You need proper evidence you can prove, and an independent engineer’s report carries far more weight than any attempt to try and outsmart the seller. The average high-street solicitor is also unlikely to have specific automotive law knowledge or the technical aspects of a vehicle. Quite often, neither does the dealer's legal representation. The better evidence and support you have, the better your chances.

Experience of dealing with vehicle dealerships

This will not be the dealership's first complaint, and they’ll have a strategy in place to manage unhappy customers. Unfortunately, this often leaves a customer blindsided and not leaving with the resolution they are ultimately hoping for. Using a team like ours helps you keep your claim on track.

The cost of going it alone

Dealers know that fighting a claim is expensive, and that many customers may baulk at potential costs of making a claim. Many owners utilise the Motor Ombudsman or Financial Ombudsman. These are free services, but sellers and lenders are wise to this, so professional advice is recommended, especially when it's weighted in your favour.

Philip Harmer, automotive lawyer

Philip Harmer leads Stormcatcher Law, working as a lawyer and arbitrator with extensive knowledge of the automotive industry. Using that insight and years of experience, he offers straight-talking advice you can act on. He knows the trade and the rules inside out, making him the right person to have in your corner.

We handle rejection cases across a wide range of makes and models with particular focus on luxury and performance vehicles including Mercedes, BMW, Audi, Porsche and Volkswagen among many others.

Why choose Stormcatcher Law?

Having the right advice when pursuing car rejection can make all the difference. Stormcatcher Law is well placed to provide it, handling both new and used car complaints with a straightforward, knowledgeable approach, and settling disputes outside the courtroom wherever possible.

If you want to reject a car bought on finance and want to know your rights and how to enforce them, call us for free advice before you complain about the dealer/lender to the Motor Ombudsman. As motor trade and car experts specialising in vehicle dispute resolution, we know the rules, the cars and the trade.