Consumer rights: what to do if you have a problem with a car bought from a dealer
Buying a car is one of the biggest purchases a lot of us will make. Most of the time, it goes smoothly. But things don’t always go to plan, and if trouble arises it’s important to know your rights if something is wrong with your car bought from a dealer.
If this is your situation we’re here to help. We’ve outlined what to do if a dealership sells you a faulty car in the UK. This guide covers your rights, time limits and the process to follow.
What Are Your Rights if You Buy a Faulty Car on Finance?
The good news is that if you do buy a used car and something goes wrong, you may have rights. The rights you have depend on where you buy it from. You’ll have less protection when buying from a private seller or at auction compared to buying from a dealer, for example.
Your Legal Protection Under UK Law
In 2015, an important change was made to consumer rights, to offer greater protection to car buyers and create clear terms for dealers selling cars. If you buy a faulty car on finance or upfront, your rights are protected under the Consumer Rights Act 2015.
This law applies whether you buy a new or used car from a dealer, as long as the vehicle was bought for personal use and not business purposes. It doesn’t apply to private sellers. Dealers must also have the right to sell the car and they’ll be liable for any faults that were present at the time it’s sold, even if they don’t become apparent straightaway.
Under the Act, used cars must be:
- Satisfactory quality
- Fit for purpose
- As described
If this isn’t the case and you need to reject a car on finance due to a fault, you have to act within a certain timeframe. Your rights if something is wrong with your car change with time. Here’s a breakdown:
Time Limits: What You Can Do Within 30 Days vs After
It’s important to flag an issue straight away if you notice one, because cancelling car finance due to faulty car could get more complicated as time passes.
Your rights within 30 days
The Act specifies you have a ‘short-term right to reject’. This means you can legally reject a faulty car on finance within the first 30 days of ownership and receive a full refund. You can also request a free repair instead if it’s an easy fix and you’d still like to keep the vehicle.
If it’s something like a slipping clutch, you might agree to have it fixed with a replacement.
However, if the engine has a misfire, or the car is suffering from electrical faults, you might consider whether you want to reject the car on finance and claim a full refund.
Bear in mind that any days the vehicle is in the workshop do not count towards the 30-day threshold.
Your rights within 6 months
Should any fault occur after the 30-day period but within the first six months of owning a car, the Consumer Rights Act says a dealer is entitled to one attempt to repair the car, rather than replace it or refund the original purchase price. If the car can’t be fixed, you can claim a refund or a price reduction if you want to keep it.
You’re entitled to a full or partial refund if:
- The cost of repair or replacement is more than the car’s value
- It’s impossible to fix
- It would cause you significant inconvenience
- It would take an unreasonably long amount of time
Your rights after 6 months
After six months of ownership, you can still make a claim if you have a faulty car on finance, but it now falls to you to prove it is faulty. And, you’ll need to show that the fault was present at the time of purchase, even if it only became obvious later. In that case, you might need to ask an expert to examine the car or component and get a written report.
What Counts as a “Faulty Car”?
When buying a car, the Consumer Rights Act specifies it must be “fit for purpose”, “as described” and of “satisfactory quality”. It’s important to understand these terms if you think you’ve bought a car on finance and it's faulty, so let’s look into them in more detail.
What does satisfactory quality mean?
“Satisfactory quality” means your car should meet the standard someone could reasonably expect considering the car’s age, value, history, mileage, make, and description.
You wouldn’t expect an older car with a lot of miles on the clock to perform as well as a nearly new model that’s barely left the garage. But, the car should still be roadworthy, reliable, and in a condition that’s consistent with its history and price. Crucially, it should also be as it was described to you.
How can I tell if a vehicle is fit for purpose?
“Fit for purpose” is another descriptor that depends on the driver and their needs. You should be able to use the car for the purposes that you’d normally expect like getting from A to B. But fit for purpose goes further than this.
If the car has been advertised as appropriate for off-roading or you’ve told the dealer that you need a model that can handle multiple short journeys, then the car must meet these criteria as well. That’s why it’s important to let the dealer or your car finance account manager know exactly what you need in a new car.
What to Do When You Have a Faulty Car on Finance
If you’re considering cancelling car finance due to a faulty car, it’s important to understand the process. It can be more complicated to reject than if you bought it outright, as the car technically belongs to the finance company. But, you do have rights.
In this situation, the dealer will have to refund them directly so that they can terminate your existing agreement and pay you back your deposit. They’ll also pay back any payments you’ve already made, minus any deductions for fair usage.
Here’s a breakdown of what to do if a dealership sells you a faulty car on finance:
The First Steps After You Find a Fault
First things first, always review your finance agreement terms carefully. Some contracts may include specific procedures or conditions for reporting faults and ending the agreement.
Next, phone the dealer and inform them of the trouble you’ve been having with the vehicle, and the steps you’d like them to take.
Keep a record of all your conversations with the dealer. Follow up any phone calls with an email, ask them to put any verbal agreements in writing, and take a note of the dates and times that your conversations take place.
Then, make sure you contact the car finance company and tell them why you want to reject the car on finance and how the dealer has responded.
How to Reject a Faulty Car on Finance
If you think you have a faulty car on finance, it’s important to act quickly and report the issue to both the dealer and the finance company as soon as possible. Remember, your rights if something is wrong with your car change depending on how long you’ve owned it.
Because the finance company owns the car, you’ll need to raise your complaint with them as well as the dealer. If they agree that the car is faulty, they may work with the dealership to end your agreement and arrange a refund of what you’ve paid so far (minus any fair usage deductions).
Do not stop making payments on your finance agreement unless you have been advised to do so by your finance provider. Missing payments can seriously damage your credit score, and the finance company may repossess the car or take legal action to recover the money owed.
What to Do If the Dealer Won’t Help
If you haven’t been able to reach an agreement with the dealer, you still have options! Going to court can be expensive and time-consuming, so contacting the Motor Ombudsman is a good place to start.
The Ombudsman is an independent organisation designed to help its members and consumers to resolve complaints in a way that’s fair for both sides and legally correct. If the dealership where you bought your car is signed up to one of the Ombudsman’s Codes of Practice, you’ll both receive free advice and dispute resolution.
Resolving Disputes and Securing Compensation
If you’re struggling to get the issue resolved, you still have rights if something is wrong with your car and there are ways to escalate your complaint.
Getting Support From Your Finance Provider
Your finance provider should step in if you have bought a car on finance and it’s faulty. They should investigate and help you reach a fair resolution, which could include ending your agreement, repairing the vehicle, or offering compensation.
Explain the issue in writing and include any evidence you’ve gathered, such as photos, and records of your contact with the dealer.
What Legal Options Do You Have?
If the dealer and finance company don’t resolve the issue, and you've exhausted the Ombudsman route, you might consider legal action. This could involve making a claim through the small claims court (for amounts under £10,000 in England and Wales).
How to Negotiate a Fair Outcome
In some cases, you might prefer to negotiate a partial refund or a repair instead of going through a full rejection. If that’s the case, be clear about what you’re willing to accept and put everything in writing.
You could agree to a free repair, a replacement car, or a refund minus usage costs. Just make sure the outcome is confirmed in writing by the finance company and that your agreement is updated to reflect any changes.
Disclaimer: This guide is for general information only and does not constitute financial advice. Car finance agreements can be complex, so if you’re unsure about your rights or options, consider seeking advice from a qualified financial adviser or your finance provider.