Is there a 14 day Cooling Off Period for Agreeing Car Finance?

Hi There, i purchased a car on a whim yesterday and i have changed my mind. I can't afford to pay back the amount each month and don't want to pay back £2000 over 4 years on a £5000 loan. It doesn't seem right.

I feel really silly but what can i do as i rang the dealer today and they tried to fob me off. After doing a little research on the net i have read about a 14 day cooling off period when taking finance out on a car! Can you tell me more and whether i will get my deposit back (£500) too. Thanks, Tanya

Asked by Tanya S
August 13, 2013

Hi Tanya, apologies for the delayed response. You are indeed correct in thinking that you have 14 days to reject the hire purchase agreement. This is called the "Cooling off period" and under the Consumer Credit Directive it gives you the right to withdraw from the finance agreement. You'll need to call the finance company asap and instruct them that you do not wish to proceed with the agreement. They can ask the supplying dealer to "un-wind" the deal and return the funds to them along with your deposit. The dealer however isn't obliged to give you your deposit back as they may well have spent time & money preparing the car for collection. The lender also can't force the dealer to return the funds if the car is in a roadworthy condition. If the dealer isn't prepared to do this you'll have to settle the finance agreement with another source of funds within the 14 days. If you believe there has been any wrong-doing by the lender or the dealer you can refer your complaint to the financial ombudsman service. I hope this clears up the situation and if you need car finance in the future please don't hesitate to use our service by applying here. Kind Regards, Rachel

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Rates from 8.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £10,000 over 5 years with a representative APR of 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £255.50 per month, with a total cost of credit of £5,329.80 and a total amount payable of £15,030.

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Total cost of credit	£ 2000
Total repayment	£ 2000

48 monthly
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Rates from 9.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £25,000 over 48 months, £3,750.00 deposit, on PCP, with annual mileage of 8,000pa, and a representative APR of 11.9%, an annual interest rate of 11.9% (Fixed), the amount payable would be £394.51 per month, an optional final payment of £7,194.33, with a total cost of credit of £9,912.36 and a total amount payable of £28,444.33.

We look to find the best product from our panel of lenders and will offer you the best deal that you’re eligible for. We earn a commission for providing our services, but this does not influence the interest rate you’re offered in any way.

Ending my current agreement related questions

Hi, I've recently purchased (drove off the fore court yesterday) a new car. For no reason other than my own guilt at throwing £270 a month at a car, I'm looking at my options around returning the vehicle. I don't want to cancel the finance agreement if it

August 13, 2013

Yes, if you change your mind and no longer want to continue with your car finance agreement, you have 14 days to reject it. This time is also known as the cooling off period. Your 14 days start on either the day that you sign your agreement or the day that you received a signed copy it, whichever happened later.

And it’s not just car loans, a 14-day cooling off period applies to all regulated finance agreements.

If you no longer want to proceed with your agreement, the first step is to contact the lender as soon as possible They can then ask the car dealership to reverse the deal and return the funds to them.

It’s important to remember that ending your finance agreement doesn’t automatically mean you’ve also pulled out of your contract to buy the car. In that case, you’ll need to find another source of funds to purchase the vehicle.

If your circumstances have changed but you’ve already had your loan for longer than 14 days, then you could still have options. With a refinance loan, you might be able to lower your monthly repayments and extend your loan term. This type of car loan allows you to settle your existing finance and take out a new deal.

Found an issue with your car? We work with verified dealerships, but unfortunately, used cars can sometimes go wrong. If the worst does happen, contact the dealership straightaway. It’s also a good idea to put your complaint in writing so that you have a record of all correspondence. You can find out more about your right to repair or replacement in our guide.

Hi Rachel, your advice is not completely correct.

It is not called the "cooling off period" but the Right Of Withdrawal. Advice as you have given it causes confusion and often leads to customers, like myself, thinking that they can return a

Asked by G Jones
August 13, 2013

Hi Gillian, thank you for your question.

As you haven't yet taken delivery of the car i believe you are within your rights to call the finance company and inform them that you now don't wish to go ahead with the purchase due to the dealer taking 3 days to fix the issues with the car. Hopefully they haven't yet released the funds to the dealership. Do you have a copy of the signed finance documentation?

Just so you know we can often beat rates offered by car dealerships. If you wish please make an application when you're ready and if approved you can choose a car from any reputable dealer and we also provide a no obligation quote. Kind Regards, Rachel

Hi, I've just put a £1k deposit down on a new car, the deal is to trade in my current car which has reached the end of its 2 year finance deal and take another finance deal on the new car! I've changed my mind as I think the payments are too high. Can I

Asked by Emma Tate
August 13, 2013

Hi Emma, thank you for your question. My understanding is that if you have signed an order form it is a legally binding agreement to buy the car. However, if you haven't signed any finance documentation you haven't agreed to any repayment period as such. I'd advise to have an open and honest conversation with the dealer and see if you can come to an amicable agreement.

I've ordered a brand-new car through a local dealer and I have been told that the car has been assigned to me. How am I placed in just changing the model of the car at this stage? I am told that when a dealer acquires a car, they have had to pay for it so

Asked by Toria McNelle
August 13, 2013

Hi Toria, thank you for your question. The order form is a legal binding document, so although you have not signed any finance documents at this stage, you are still liable to pay for the vehicle. Of course the dealership may allow (at their discretion) you to swap for a Ford Focus if it has the same value, but this is not obligatory on their part at all. Kind Regards, Rachel

Hi, i'm hoping that you can you help me. I purchased a car from Carcraft (west midlands) on 17 Jan 2014. I gave them a budget of £250 a month at the most and after finding a car they got back to me with a figure of £285 a month. OK i thought fair enough

Asked by Adrian Butler
August 13, 2013

Hi Adrian, thank you for your question. The reference to the maintenance pack seems like a sales tactic to me. No finance company would force any optional extras on a customer. I'd imagine with a few stern phone calls you could have this extra agreement cancelled. Was the 2nd agreement with the same finance company? If so ring up and explain what has happened and they should be able to un-wind this part of the agreement assuming you're happy with the original finance deal. A phone call to the general manager at the Carcraft branch in the West Midlands wouldn't do any harm either. I don't think you'd be able to sue them as such but it would be worth taking some free legal advice should they not cancel the maintenance finance agreement. Good luck and if you need finance in the future please make an application with us. Once accepted we provide a no obligation quote and you can buy a car from any dealer. Kind Regards, Rachel

Hi, I signed papers for finance for a car on Tuesday and was told I could collect the car later on that night. However, due to the car needing work done, I still don't have a date to pick up the car three days later. I have seen a better car that would su

Asked by Gillian aird
August 13, 2013

Hi Gillian, thank you for your question. As you haven't yet taken delivery of the car i believe you are within your rights to call the finance company and inform them that you now don't wish to go ahead with the purchase due to the dealer taking 3 days to fix the issues with the car. Hopefully they haven't yet released the funds to the dealership. Do you have a copy of the signed finance documentation? Just so you know we can often beat rates offered by car dealerships. If you wish please make an application when you're ready and if approved you can choose a car from any reputable dealer and we also provide a no obligation quote. Kind Regards, Rachel

Hi, I'm in need of some advice. Within the last 48 hours i have taken a car on finance from Evans Halshaw with the finance provided by Santander. I also used my old car as part exchange which they valued at £200. I have now realised i have made a huge m

Asked by David Nichol
August 13, 2013

Hi David, thank you for your question and apologies for the delayed response. In short, you do have the right to withdraw from the credit agreement however you would still need to pay for the car (plus a small amount of interest) as you have entered into an agreement with the car dealer to purchase the car. Notice of withdrawal can be given verbally or in writing. Your best bet may be to go back to the dealer and see if they can exchange the car for a cheaper one - you can then get the current agreement settled and take finance out on the cheaper car. I hope this helps and good luck. Kind Regards, Rachel

Hi, My nephew has just purchased his 1st new car last Saturday from Bristol Street motors. His parents have put down £3500 cash deposit and the rest on finance. Drove the car home and noticed stone chippings on the paint work bonnet. Rang the garage deale

Asked by Paula thomas
August 13, 2013

Hi Paula, thank you for your question. Did you obtain the finance through ourselves? If so and you are still within the 14 day cooling off period, you would be able to cancel the finance deal with us. If you have signed the order form at the dealership, however, technically the dealership isn't obliged to take the car back unfortunately. Kind Regards, Rachel

August 13, 2013

And it’s not just car loans, a 14-day cooling off period applies to all regulated finance agreements.

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