What Are My Rights If I Bought a Faulty Car on Finance?

When you buy a car through finance, you have rights under two pieces of legislation working together: the Consumer Rights Act 2015 (CRA) and the Consumer Credit Act 1974 (CCA). These give you the ability to pursue both the dealer and the finance company if something goes wrong. See our faulty car bought on finance page for more information.

Does it matter whether I used PCP, HP, or another finance product?

The CRA applies to the sale of goods regardless of how they were financed. What changes depending on the finance product is the nature of your agreement with the lender. HP and PCP agreements are regulated under the Consumer Credit Act 1974, which provides additional rights including Section 75 (joint liability) and Section 99 (voluntary termination for HP and PCP). Straightforward personal loans used to buy a car work differently – the loan is with the bank, and the car purchase is with the dealer, so Section 75 may apply but the structure is less integrated.

Can I go to the finance company instead of the dealer?

Yes. Any misrepresentation or breach of contract.

What faults entitle me to a rejection?

Any fault that causes the vehicle to fall below the standard a reasonable person would expect given its age, mileage, price, and description can support a rejection claim. There is no minimum severity threshold, though very minor cosmetic defects may not be enough unless they were specifically misrepresented. Mechanical failures, safety-critical faults, and defects that impair normal use are the most straightforward grounds.

Do I have to accept a repair?

Within the first 30 days: no. You can reject outright without giving the dealer any opportunity to repair. Between 30 days and six months: the dealer is entitled to one repair attempt before you can escalate to rejection. After six months: the same one-repair rule applies in principle, though proving the fault was pre-existing becomes your burden.

What if the repair makes things worse?

A repair that fails, makes the fault worse, or introduces a new problem entitles you to escalate immediately. You do not need to allow a second repair attempt. At that point you can insist on a price reduction or – if the circumstances warrant it – full rejection.

What refund am I entitled to?

Under the short-term right to reject (within 30 days): a full refund with no deduction for use. Under the final right to reject (after six months, or after a failed repair): a refund less a reasonable deduction for the use you have had of the vehicle. The deduction is calculated based on mileage driven during your ownership relative to the expected total lifespan of the car.

Can I keep making my insurance claim if I reject the car?

Your insurance policy is separate from the finance and purchase contract. You should notify your insurer of any material change in circumstances, but your insurance cover does not depend on your rejection claim outcome. Speak to your insurer directly if there are any ongoing insurance issues with the vehicle during a dispute.

What if I have already had the car for more than a year?

You can still make a claim up to six years from the date of purchase under the Limitation Act 1980. The longer you wait, the harder it becomes to prove the defect was pre-existing and the larger any use deduction will be – but the right remains. Independent engineering evidence becomes increasingly important the further you are from purchase.

Do I need a solicitor?

Not necessarily for straightforward cases within the 30-day window where the fault is clear and the dealer is cooperative. However, if the dealer or finance company is disputing the fault, the vehicle is high-value, or you are outside the six-month CRA presumption period, specialist legal advice significantly improves your prospects and protects you from procedural mistakes that could undermine your claim.

What is The Motor Ombudsman and should I use it?

The Motor Ombudsman (TMO) is an independent dispute resolution scheme for the automotive sector. Dealers who are TMO-registered are bound by its code of practice, and the TMO can adjudicate disputes for free. It can be a useful escalation route if the dealer is unresponsive, though it cannot compel non-member dealers to participate. For finance company disputes, the Financial Ombudsman Service (FOS) is the relevant free alternative.

What if the car was bought privately?

Private sales are outside the scope of the Consumer Rights Act 2015 and the Consumer Credit Act 1974. The principle of caveat emptor (buyer beware) largely applies. You can still pursue a claim for misrepresentation if the seller made false statements about the vehicle, but the statutory rejection rights described in this article do not apply.

How Stormcatcher Law can help

If you bought a faulty car on finance and are unsure of your position, our automotive law team provides free initial assessments.