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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

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

Tim Carpenter
Answered by Tim Carpenter Car Finance Expert Edited on

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£
5 Years
Total cost of credit £ XXX.XX
Total repayment £ XX,XX.XX
48 monthly
payments of
£ 245 98

Rates from 6.9%: the exact rate you will be offered will be based on your circumstances

Representative example: borrowing £6,500 over 5 years with a representative APR of 27.4%, an annual interest rate of 27.4% (Fixed) and a deposit of £0.00, the amount payable would be £188.74 per month, with a total cost of credit of £4,824.37 and a total amount payable of £11,324.37

Rates may differ as they are dependent on individual circumstances. Subject to status.


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