When buying a car the last thing you want to be dealing with are mechanical faults. Unfortunately, there are some occasions where this might occur. You'll want to know where you stand if something goes wrong. 

In this article, we will explain your rights if you acquired a damaged car on finance and how to remedy the matter. 

What Should I Do if I Bought a Faulty Car on Finance? 

If you have a loan for a new or used car and you uncover an issue with the vehicle and you are certain that you did not cause the problem. Go over your auto finance agreement as a first step, to find out about the terms and conditions and how much coverage is offered. 

Following that, you must contact the car credit provider and describe the problem, whether it is an engine problem or something else. You have the right to make a complaint, however, you must explain to the car dealer how you detected the flaw. 

What Counts as a Fault With Your Vehicle? 

A fault is defined as anything that interferes with the operation of your vehicle. Severe issues include the engine shutting down, the windows not operating, or a drivetrain problem, these are major issues which could result in further action by the car dealer i.e. a refund or repair. 

Small issues, such as the inability to adjust the seats, the failure of a headlight bulb, or a problem with the air conditioning (that was not disclosed at the time of purchase), must be addressed by your dealer. You are not usually entitled to a refund for these issues.  

If the parties cannot agree on whether a fault is minor or major, we recommend getting legal advice from the financial ombudsman. 

What Are My Consumer Rights for a Faulty Car Bought on Finance? 

The same regulations apply if you bought a new car via a finance package such as PCP or Hire Purchase. The Consumer Rights Act (CRA) might be quite helpful in the situation of a damaged car purchased on credit, so let's have a look at it. 

The Consumer Rights Act of 2015 protects customers from financial loss if they acquire a poor-quality product or service, including cars and associated equipment and services. 

As a precaution, thoroughly study the terms and conditions of your auto financing agreement to see if your car dealer has included information on what would happen if a problem with the vehicle occurred.  

If things get problematic after speaking with the vehicle dealer and you are being made accountable or billed for the fault, you can always contact the financial ombudsman for free or seek legal assistance. 

Can I Return a Car on Finance if It’s Faulty?

If you've bought a faulty car on finance, your rights depend on whether you purchased from a dealer or a private seller. 

If you bought the car from a dealer, you are protected by the Consumer Rights Act 2015. This act states that the car must be of satisfactory quality, fit for purpose, and as described. If the car is found to be faulty within the first 30 days, you have the right to reject it and request a full refund. 

If you discover the fault after 30 days but within the first six months, you can request a repair or replacement. If the dealer cannot fix the issue within a reasonable time, you may still be entitled to a refund, potentially with a reduction in usage. 

If you bought the car privately, your rights are more limited. The car must still be as described, but the seller isn't obliged to ensure it's of satisfactory quality or fit for purpose. You may have a case if you can prove the seller deliberately hid the fault or misrepresented the car, but resolving disputes with private sellers can be more challenging. 

In both cases, it's essential to act quickly upon discovering the fault and notify the seller immediately. Consider consulting a legal expert if you're unsure of your rights or if the seller is uncooperative. 

Right to Repair 

The most common claim made by car buyers is the right to repair or replace. The legislation recognises that mistakes happen and that dealers should be given the opportunity to correct them. Yet, this raises concerns for many customers, such as: 

• Can the dealer use second-hand parts for the repair? 
• Can the dealer claim the cost of the repairs under my warranty? 
• Is it necessary for me to use the warranty? 
• What is a fair time frame for completing the repair? 

Whatever happens, you must keep the finance company informed at all times and ensure that it is well documented by retaining copies of letters and emails - any correspondence via telephone should be noted in an email after the fact. 

Reject a Car on Finance 

It is possible to reject a car from a dealer, there are three possible avenues to achieve this: 

1. The short-term right to refuse applies when a defect appears within 30 days after delivery. 
2. The car has been repaired once before but the repair was unsuccessful, or the original repair was successful, but the vehicle developed a new problem. If the second fault occurred within the first 6 months.
3. Finally, when the car can be fixed but it is either impractical or impossible to do so without causing you inconvenience or within an acceptable time frame.

Rejecting a car after 6 months becomes more complex, as UK law states that the onus is on the consumer to prove the faults were present during the first 6 months of ownership. Without this proof, the issue becomes the responsibility of the vehicle owner. 

Complaining to the Financial Ombudsman 

If the car finance firm denies your request to return a financed vehicle, you can file a complaint with the financial ombudsman agency. The Ombudsman, often known as the Financial Ombudsman Service, is a free organisation entrusted with investigating and adjudicating complaints regarding consumer-regulated finance arrangements. 

The car finance company is bound by FOS decisions. Last year, however, only 30% of people who filed a complaint with the financial ombudsman were successful. The situation is exacerbated in large part by customers who do not know how to file a complaint or how to prepare their cases to maximise their chances of success. 

The FOS was established to settle complaints "quickly and with minimal formality" and to serve as an alternative dispute resolution mechanism. Customers are not required to file "legal filings." 

For the best chance at successfully disputing via the FOS, follow their guidelines on their website, and take great care to file the documents and details correctly.  

What to do if you can't afford repairs to your financed car? 

If you find yourself in the unfortunate situation of having a broken car, with finance still outstanding and after passing the 6-month threshold, there are still a couple of options available.  

Sell the car 

Some garages will buy broken cars with the intention of fixing them and re-selling them. The issue comes when the residual value left in the car as is, is less than the finance amount. 

Another option is to sell the car for spares, to a breaker or dismantler. Again, the value of the car would have to be very high, and the remaining finance low for this to work.  

Get your car fixed by spreading the cost, interest-free 

Bumper offers interest-free pay monthly car repair loans at thousands of partner garages across the country. 

To get started, check out where your nearest partner is. 

Author - Joseph Law

Joseph has been writing about cars for over seven years and writing for Bumper for over two, blending his passion for automobiles with a talent for storytelling.

Joseph has written about engineering and cars for Autozilla, Komaspec, and several engineering manufacturers. When he's not writing or tinkering with one of his five cars, Joseph dreams of owning an Alfa Romeo 33 Stradale.