What are my consumer rights as a car finance customer?

Buying a car is one of the biggest purchases you can make. For many of us, it’s second only to buying a house (or a superyacht!) And when you’re faced with the prospect of spending – and potentially borrowing – thousands of pounds, we want you to know where you’d stand if the worst happens.  
 
All cars, especially used models with a few miles on the clock, can develop faults. If you end up (in the likely event) with a faulty vehicle you can’t rely on, don’t panic; you have options.
 
Knowing your consumer rights is a great place to start. When you understand exactly what you can do if you end up with a faulty car or finance that was mis-sold to you, you’ll be able to apply for a car finance agreement and handle the situation with confidence.

What are my rights if I have a complaint about my car finance?

Your car finance deal should be tailored to you. That means it should be appropriate to your circumstances and budget – a lender should never offer you a loan that’ll put you into financial difficulties.

 It’s also important that you’re treated fairly at every stage of your car finance journey. This is especially important if you’re classed as a vulnerable person due to a disability or speaking English as a second language.

If you don’t feel that you received fair treatment when dealing with your finance provider or credit broker, you might be entitled to complain.

You also have the right to complain if:

• Your finance was mis-sold
• You’ve been given an unaffordable monthly repayment amount
• You don’t agree with the charges that have been applied at the end of your agreement
• The commission earned by the credit broker or dealer hasn’t been properly disclosed

Who do I log a complaint with and how do I complain?

First things first, you’ll need to give the finance provider a chance to put things right. If you arranged your finance through a car dealer or credit broker, you could also contact them as well as the lender.
 
You can make the complaint over the phone, but most lenders will ask that you also put your concerns in writing.
 
Each lender should have a complaints procedure that details exactly how their procedures work. They should also let you know how long it usually takes for them to respond. However, under FCA guidelines, for most types of complaint, you should receive a final decision from them within eight weeks.
 
If you don’t receive a response or you’re not satisfied with the reply you get, you can then escalate your complaint to the Financial Ombudsman. This is a free service that is open to you as long as you submit a complaint within six months of receiving the final written decision from your lender.
 
You might be able to take your case to court if you don’t agree with the Ombudsman’s decision. This would be a civil case in England, Wales, and Northern Ireland or a small claim put through the Sheriff Courts in Scotland.
 
Worried about being the victim of a scam? You can approach the Financial Conduct Authority (FCA) directly to make a report. It’s their job to regulate the car finance industry and make sure companies are operating legally.

What are my rights if something is wrong with my car?

Let’s face it; car problems can happen, especially if you’ve bought a used car. But you shouldn’t have to deal with a pre-existing fault, no matter whether the car just rolled off the production line or has already had a few careful drivers. That’s where the Consumer Rights Act 2015 comes in; your car must be of satisfactory quality, fit for a particular purpose and as described.
 
If you’ve run into an issue in the first 30 days, you have the right to reject the faulty car and receive a full refund.

Once the first 30 days have elapsed, you can no longer immediately reject the car if there’s a problem, but you can ask the dealer for a repair, replacement, or partial refund.

Bought a car on finance? If you have a Hire Purchase (HP) agreement or Personal Contract Purchase (PCP) contract, you should let the lender know that the car has a fault and isn’t of satisfactory quality within the 30 days. This is technically viewed as a breach of your agreement and should mean you’re entitled to a refund.
 
If faults happen later down the road, six months or more after the purchase date, it’s much harder to prove that the issue existed when you bought the car and you might need to provide independent evidence.

What if I have a problem with a car bought from a dealer?

If you’re a non-finance customer and you found your new pride and joy on the forecourt of your local dealer, you should contact them as soon as you realise there’s a problem with the car.

If it’s been less than six months since you bought the car, the dealer will likely offer to fix it for you. Make sure you understand if any additional costs will apply and keep a written record of your conversations. Consider following up any phone calls or in-person chats with an email recapping what was discussed.
 
You have the right to reject and return the car to the dealer for a full refund if it’s been less than 30 days. However, you must give the dealer a chance to fix the problem if you’ve had it longer than 30 days and less than six months. Keep in mind if they can’t repair it and offer a refund instead, you might not get a full refund as the dealer might retain funds to cover the months you’ve been driving the car without any issues.
 
If the dealer refuses to accept this, you can escalate your complaint to the Financial Ombudsman.

How can I get extra protection?

How you pay for your car can give you extra protection if something goes wrong. While buying in cash means you still have protection from the Consumer Rights Act 2015 – and could save some money by not paying any interest – you don’t get any additional rights.
 
In contrast, if you’ve bought the car with a credit card, you may also be covered by section 75 of the Consumer Credit Act 1974. This means you don’t have to go it alone; your finance provider or credit card company will be jointly responsible for compensating you for any car problems.

What if I have a problem with a car bought privately?

Buying a car from a private seller can be cheaper but it also comes with added risk. There are a few rules that private sellers must abide by.
 
The car must:

• Match the seller’s description
• Be roadworthy
• Be legally owned by the seller

Essentially, this means it must work, be legally driven on public roads, and not be owned by anyone else. However, buyers beware applies – it’s your responsibility to check that the car is in good working order before you agree to buy and hand over the cash. If a fault develops later, you’re not automatically eligible for a refund.