Bought a faulty car on finance? How to reject it or claim your costs

If a car you bought on finance turns out to be faulty, aim your complaint at the finance company - on hire purchase and PCP it is legally the supplier of the car, and the Consumer Rights Act runs against it. Within 30 days of delivery you may be able to reject the car outright; within six months, the law presumes the fault was there when the car was supplied.

Dealers and lenders are practised at passing a faulty-car customer back and forth until deadlines slip. This guide sets out the actual rights, the deadlines that matter, and how to make the finance company engage.

Key takeaways

• On HP and PCP, the finance company owns the car and supplies it to you - your legal claim is against it, not just the dealer.
• The car must be of satisfactory quality, fit for purpose and as described - judged against its age, mileage and price if used.
• Short-term right to reject: within 30 days of delivery you can reject a faulty car for a full refund of payments made.
• After 30 days: the finance company generally gets one attempt at repair or replacement; if that fails, you can reject (a deduction for use may apply after the first six months).
• Faults appearing within six months are presumed present at supply - the finance company must prove otherwise.
• If it refuses, the Financial Ombudsman Service is free and independent.

Why the finance company is on the hook

With hire purchase and PCP, the dealer sells the car to the finance company, which then supplies it to you under the agreement. That makes the finance company the trader for Consumer Rights Act purposes: satisfactory quality is its obligation. (With a personal loan or a credit-card purchase, the analysis differs - the dealer is the supplier, and Section 75 or the loan's connected-lender rules come into play instead.)

Practical consequence: put the complaint to the finance company in writing, even while the dealer "looks at" the car. The dealer has no power to run down your 30 days.

Your rights, by timeline

When the fault shows	Your position
Within 30 days of delivery	Short-term right to reject: hand the car back, end the agreement, refund of payments made. A repair pauses the clock if you choose to allow one.
After 30 days, within 6 months	Fault presumed present at supply. Finance company gets one repair or replacement attempt; if it fails, you can reject (final right to reject) or keep the car with a price reduction. A deduction for your use of the car can apply.
After 6 months	Rights continue, but the burden shifts to you to show the fault was present at supply - an independent report becomes near-essential.

"Satisfactory quality" is contextual: a three-year-old car with 60,000 miles is not held to new-car standards, but a gearbox failing three weeks after delivery is not "wear and tear" at any age. Judged fault by fault, against what a reasonable person would expect for the age, mileage and price.

Sources: Consumer Rights Act 2015, sections 9-24 (quality standards and remedies) and Financial Ombudsman Service guidance on hire purchase and conditional sale complaints. Last checked: 04.07.2026.

The moves that protect your position

1. Report the fault in writing to the finance company immediately - date, fault, and what you want (rejection, repair, or costs). Phone calls to the dealer do not create a record.
2. Keep paying the finance while the dispute runs, if you can. Stopping payments creates arrears and credit-file damage that muddy a clean case - ask the finance company to freeze things instead, in writing.
3. Get the diagnosis documented: garage report, error codes, photos, dates. For a contested case, commission an independent inspection - the cost is claimable if you succeed.
4. Track every day off the road: hire costs, recovery fees, missed work. Consequential losses belong in the claim.
5. Say the legal words once, plainly: "I am exercising my short-term right to reject under the Consumer Rights Act 2015" - dated within the 30 days - removes any later argument about what you asked for and when.

The standard refusals - and the answers

• "It's wear and tear." The default answer for used cars. Rebut with the inspection report and the timeline: a fault this significant, this soon, points to the point of supply - and within six months, that presumption is the law's, not yours to earn.
• "You have to give us multiple repair attempts." After 30 days they generally get one. If it failed, the final right to reject is live.
• "Take it up with the dealer." On HP/PCP the finance company is the supplier. It can involve the dealer; it cannot redirect its own liability.
• "You've had use of the car." True and priced in: a use deduction can apply to later rejections - but not to the 30-day right, and it does not defeat rejection, only adjusts the refund.

What evidence helps most

• the finance agreement and the advert or listing for the car
• delivery date proof - the 30-day and six-month clocks hang on it
• every fault report, in date order, with the garage findings
• the independent inspection report, if you have one
• receipts: repairs, recovery, hire, diagnostics
• your written rejection or complaint and the responses

When and how to escalate

If the finance company rejects your complaint or eight weeks pass, you can take it to the Financial Ombudsman Service - it handles motor-finance quality disputes in volume. The Financial Ombudsman Service is free, independent, and you keep any compensation it awards. The usual six-month window from the final response applies - check the current time limits.

For context, our analysis of published Ombudsman decisions shows loans and credit complaints perform differently from insurance or banking disputes, but a faulty-car case still starts with delivery date and fault evidence.

If your complaint is about the finance itself rather than the car - undisclosed commission or affordability - see the car finance commission guide and unaffordable lending.

How HeyRefund can help

Faulty-car cases are deadline cases: delivery date, fault dates, repair attempts, the rejection letter. HeyRefund helps you lay out that timeline, attach the reports and receipts, and put the complaint to the finance company in terms it has to answer.

Complaining and escalating are free. HeyRefund just keeps your file - and your deadlines - straight.