Key takeaways
- You can reject a faulty car bought on finance
- On PCP and HP the lender supplied the car: reject to them too
- Same time limits: 30 days full refund, one repair up to 6 months
- Rejection is not voluntary termination
- If the lender refuses, the Financial Ombudsman is free and binding
On this page
Can you reject a car on finance?
Yes. A common myth is that buying on finance weakens your rights — in fact it usually strengthens them. The Consumer Rights Act 2015 applies to a car supplied on PCP or HP just as it does to a cash purchase, and because a finance company is involved you gain a second party who is liable and a free ombudsman to hold them to it.
The rejection rules are the same as for any car — covered in full in our guide to rejecting a faulty car. A full refund in the first 30 days; one repair then the final right to reject up to six months; and after six months you must show the fault was present at supply.
Can you reject a car on finance after 6 months?
Yes, if the fault was there when the car was supplied. What changes at six months is who has to prove it. Inside the first six months the law presumes a fault was present at supply, and the dealer or lender has to show otherwise. After six months that presumption ends, and it is for you to show the fault was there from the start, usually with an independent inspection report.
The right itself does not expire at six months. A claim under the Consumer Rights Act 2015 can be brought for up to six years in England and Wales (five in Scotland), and on PCP or HP the finance company remains liable for the whole of that time, because it supplied the car. The remedy is usually a repair or replacement first, then the final right to reject if that fails, with a deduction for the use you have had.
The finance route helps most here. The lender has its own complaints process with eight weeks to answer, and if the answer is no you can take the complaint to the Financial Ombudsman for free, within six months of its final response.
Who you claim against
This is the part that trips people up. On PCP and HP, the finance company legally owns the car until it’s paid off — so in the eyes of the law they supplied it to you, and they are directly responsible for its quality under the Consumer Rights Act. Your claim is primarily against the finance company, though you should put the dealer on notice too. See how finance-company liability and Section 75 work.
Your rights by agreement type
Who you claim against depends on how the car was financed.
PCP (Personal Contract Purchase)
The finance company owns the car during the agreement, so it is the supplier and is directly responsible for quality under the Consumer Rights Act. Reject to the finance company as well as the dealer.
Rejecting a car on PCPHP (Hire Purchase)
Same as PCP for rejection purposes — the lender owns the car until the final payment, so it carries the same joint liability. Your claim is against the finance company.
Rejecting a car on HPPersonal loan
A standalone loan is separate from the car: you bought it outright, so your Consumer Rights Act claim is against the dealer. The loan continues unless you settle it from any refund.
When the lender is liableCredit card (Section 75)
If any part of the price (£100–£30,000) went on a credit card, the card provider is jointly liable under Section 75 of the Consumer Credit Act — a powerful extra route.
How Section 75 worksThe rejection process on finance
The mechanics differ slightly from a cash purchase, because the lender is involved and your credit file is at stake.
Reject in writing — to the dealer and the lender
Because the finance company is the legal owner and supplier, put your rejection in writing to both. State the fault, cite the Consumer Rights Act 2015, and say you are rejecting the car.
Protect your credit while it’s resolved
Missing payments can harm your credit file. It is usually safest to keep up payments (or agree a hold in writing) until the rejection is accepted — you reclaim what you’ve paid if it succeeds.
Reclaim your deposit and payments
A successful rejection unwinds the agreement: you get your deposit and monthly payments back, minus any fair-use deduction for a car after the first 30 days.
Escalate to the Financial Ombudsman
If the finance company refuses or ignores you, complain to it formally, then take it to the free Financial Ombudsman Service — its decisions are binding on the lender.
Put your rejection in writing — see our rejection letter template and the evidence you’ll need.
Or have the letter written from your answers.
- Enter your reg
- Get your verdict
- Reject your faulty car
Free · No card · About 2 minutes
Rejection vs voluntary termination
These are not the same thing. Rejecting a faulty car is a Consumer Rights Act remedy that unwinds the deal and refunds you. Voluntary termination is a separate right to end an HP/PCP agreement once you’ve paid 50% of the total — you hand the car back but get no refund. If the car is faulty, rejection is almost always the better route. For every way of giving a car back to the finance company, faulty or not, see the guide.
Escalating to the Financial Ombudsman
Because a regulated finance company is involved, you have a powerful free backstop. If the lender refuses your rejection or drags its feet, make a formal written complaint, then take it to the Financial Ombudsman Service after eight weeks or once you have a final response. Its decisions are binding on the finance company. This is separate from car finance mis-selling claims, which are about commission rather than a faulty car.
Work out your figures
Two quick tools: check the shape of your agreement, and work out the 8% statutory interest you can claim on money you’re owed.
Finance calculator
Vehicle Details
Interest Rates (APR)
Typically 30-50% of the car's value
Enter the car price and deposit to compare options
We'll show you monthly payments and total costs for HP, PCP and personal loans.
Interest calculator
Interest rate
Three steps
- 1.Choose your interest rate
- 2.Enter the amount owed
- 3.Set the date range
Estimates only. Check the figure against the Ombudsman’s own guidance before relying on it.
Frequently asked questions
Yes, if you can show the fault was present when the car was supplied. After six months the burden of proof moves from the dealer to you, so an independent inspection report matters. The claim can be brought for up to six years (five in Scotland), the finance company stays liable for the whole of that time, and the Financial Ombudsman is there if it refuses.
Yes. On PCP and HP the finance company owns the car and is directly responsible for its quality under the Consumer Rights Act 2015, so you can reject a faulty car to the finance company as well as the dealer. The same 30-day and six-month time limits apply.
On PCP or HP, the finance company is the legal supplier and is liable for the car’s quality, so your claim is primarily against them (put the dealer on notice too). With a standalone personal loan the claim is against the dealer. If you paid by credit card, Section 75 makes the card provider jointly liable.
Be careful — missing payments can damage your credit file. It is usually safest to keep paying (or get any payment hold agreed in writing) while your rejection is being resolved, and reclaim those payments if the rejection succeeds.
No. Rejection is a Consumer Rights Act remedy for a faulty car that unwinds the agreement and refunds you. Voluntary termination is a separate right to end an HP or PCP agreement once you have paid 50% of the total — you hand the car back but do not get a refund.
Yes, on a successful rejection the agreement is unwound and your deposit and payments are refunded. After the first 30 days the finance company may make a reasonable deduction for your use of the car.
Make a formal written complaint, then escalate free of charge to the Financial Ombudsman Service after eight weeks or once you have a final response. The Ombudsman’s decision is binding on the finance company if you accept it.
This guide is general information about your rights, not legal or financial advice for your specific situation.