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If I Get Car Finance What Are My Rights?

Don't forget that if you are taking out a loan to buy a car you do have certain rights. 🤔 Once you have purchased a car, problems could arise, or you could maybe realise the dealer misled you. 😙 If this happens, you will have the legal protection that covers these unexpected and unfortunate problems.

If you bought your vehicle from a dealership, you will have more legal protection than an individual who purchased from a private seller or auction. In the UK, the Consumers Rights Act 2015 gives you statutory rights if you have problems with your used or new car. But these car finance consumer rights will vary depending on where you bought your vehicle from.

Essential Things You Need To Know 

The Basic Rights

Based on the Consumers Rights Act, firstly goods must be as they are described in the sale, be fit for use, and of satisfactory quality. When buying a vehicle, especially used cars, issues could arise with regards to the quality. As a buyer, you can only seek redress if the vehicle is not in the condition presented by the dealer or seller.

Car Finance Agreements

Car finance plans can either be on hire purchase, personal contract purchase, leasing, or a personal loan. Specific terms and conditions govern all these plans. You should first fully comprehend your finance agreement terms before approaching the financing company to raise a query.

Claim Rejection

If a financial company rejects your claim, you can exercise your rights further by making a complaint to the Financial Ombudsman Service. You will need to provide the necessary information regarding the car's condition, loan agreement, and any other evidence to support your claim. Evidence of all communications is key, so keep emails etc. 

What Are Your Rights?

Buying A Car From A Dealer

Many car dealerships will offer a 12-month warranty, even for second-hand cars, so do check exactly what is covered. 

If you bought a new or used car from a dealership, you have the right to return the vehicle within 30 days from the day of purchase. A dealership sale is protected under the Consumers Rights Act. Once this period expires, you lose the short-term right to reject goods.

The dealer could repair the faults or replace the car at no cost or give you a cash refund. If the dealership does not fix the vehicle within a reasonable time, you can take it elsewhere for repairs and claim the cost.

For this process to work, you must prove that the issues were there when you bought the car. If the fault arises after the 30-day limit, it's less likely that you will receive a refund.

However, you still have protection within the first six months after the purchase.  The dealer can offer a partial refund, repair, or replace it. In Scotland, the legislation will be different so do check, but your car finance rights allow you to return the car to the dealer after six years legally.

Buying A Car Privately

Private sales are more problematic if problems arise after you have bought the car. You have less protection because some parts of the Consumer Rights Act don't apply.

However, the seller must accurately describe the car and have the legal right to sell the vehicle. The vehicle should be accurately described, represented well and roadworthy.

When buying a car from a private seller, make sure you view the vehicle before the sale and note details such as his address if anything goes wrong. Carry out a car check to ensure that the car's history is legitimate.

Make sure there is no outstanding loan attached to it by doing an HPI check (these can easily be done online for a small fee). You can also take it to your trusted mechanic, or the AA, to do a thorough assessment.

Before the sale, make sure the car is not stolen and does not have outstanding finance to avoid legal trouble. With this option, your rights are limited, especially if the seller does not admit to the car faults. You could seek redress from the courts if you cannot resolve the dispute.

Who Is The Legal Owner Of A Car On Finance?

Car financing options allow you to purchase a vehicle and pay in monthly instalments. Since it's not an outright cash payment, it can be unclear who the car's legal owner is on finance.

Once you make an auto purchase in the UK, you receive all the vehicle documents. This includes a V5 registration document that has your name, details, and address. As the person using the car, your name is listed as the keeper, but the finance provider has ownership until your loan is fully repaid.

However just because you don't own the car outright, it doesn't mean you won't be responsible for repairs. Of course, if you have bought a new car then the warranty will cover most big issues.

You will need to read in detail to make sure your problem is covered. This is a complicated area and your finance company may hold some responsibility so do make further enquiries to check.

Hire Purchase

As one of the most common car finance options, hire purchase payments are spread across several months. Once you have paid off the entire loan amount including interest, you now own the car. Your car finance rights limit you from selling the car or making any changes. The financial lender owns the vehicle legally until the end of the agreement.

Personal Contract Purchase 

PCP financing has three options available at the end of the contract. You can either return the car, re-finance to get a new car or pay off a final "balloon" payment to own the vehicle entirely. Like hire purchase, the finance lender is the vehicle's legal owner until you pay off the final costs.

Tips To Help Your Claim

Make Contact

Once you have identified a problem with the car, contact the dealer or seller immediately.

Keep Records

Once the dealer agrees to fix the issues, ask for a breakdown of any costs involved. In any correspondence to the dealer or private seller, make sure you keep records of all your communication.

Contact Manufacturer

If the dealer refuses to budge, especially for a new car, you can contact the manufacturer for assistance.

Seek Further Help

If all these tactics fail, you can raise a complaint with the Financial Ombudsman Services to help you get a resolution. Taking someone to court is a costly business so do explore all other avenues first. 


When buying a car in the UK, you have legal rights and protections. The Consumers Rights Act covers you in case the vehicle has any issues. The Citizen's Advice Bureau can offer free help and guidance and is a good port of call if you can't resolve an issue with the seller.

Handling these transactions via dealership gives you more car finance rights in comparison to a private sale. If the car is not satisfactory or as described, you have every right to claim a refund or get repair services.

If you are looking to spread the cost of your car purchase, apply for financing with Carmoola. Download the app and provide us with a few details, verify your ID with a quick selfie. You will get a decision within minutes. We love to help where we can.  Contact us today. 👍

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