What to Do if You Have Issues with Your Car Finance Agreement in the UK
- Oliver Lewis
- 4 days ago
- 4 min read
When you sign up for a finance agreement, whether for car finance, motor finance, or van finance, you expect the process to be smooth and the terms to be clear. Unfortunately, problems can arise. Maybe the terms were not explained properly, payments are higher than expected, or the vehicle isn’t as described. Knowing your rights and the steps to take can save you time, money, and stress.
This guide explains what to do if you face issues with your finance agreement in the UK. It covers your consumer rights, how to raise complaints, and where to get help. Plus, there is a helpful FAQ section to answer common questions.
Carefully reviewing your finance agreement can help spot issues early.
Understanding Your Consumer Rights in Vehicle Finance
Finance agreements for cars, vans, or other vehicles are regulated to protect consumers. The Consumer Credit Act 1974 and the Consumer Rights Act 2015 provide important protections.
Clear information: The lender must give you clear details about the total cost, interest rates, payment schedule, and any fees before you sign.
Fair treatment: You should not be misled or pressured into agreements.
Right to cancel: You usually have a 14-day cooling-off period to cancel the agreement without penalty.
Faulty goods: If the vehicle is faulty or not as described, you may have rights to repair, replacement, or refund.
Unfair terms: Any unfair contract terms can be challenged.
Knowing these rights helps you identify when your finance agreement or the vehicle purchase is not handled properly.
Common Issues with Finance Agreements
Here are some typical problems motorists face with car finance, motor finance, or van finance agreements:
Hidden fees or charges not disclosed upfront
Incorrect interest rates or payment amounts
Vehicle not delivered as promised or with undisclosed faults
Difficulty contacting the finance company for support
Unclear or unfair contract terms
Problems with early termination or settlement fees
If you experience any of these, it’s important to act quickly.
Steps to Take if You Have Issues with Your Finance Agreement
1. Review Your Agreement and Documents
Start by carefully reading your finance contract, any related paperwork, and the vehicle sale agreement. Check for:
Payment terms and amounts
Interest rates and fees
Cancellation rights
Vehicle condition and description
Make notes of anything unclear or incorrect.
2. Contact the Finance Company or Dealer
Raise your concerns directly with the finance provider or dealer. Explain the issue clearly and provide evidence such as:
Copies of contracts
Payment receipts
Photos of vehicle faults
Keep a record of all communications, including dates and names of people you speak to.
3. Use the Finance Company’s Complaints Procedure
Most lenders have a formal complaints process. Follow their steps and give them a chance to resolve the problem. They must respond within eight weeks.
4. Seek Independent Advice
If the issue is not resolved, get advice from consumer organisations such as:
Citizens Advice Bureau
Financial Ombudsman Service (FOS)
Motor Ombudsman (for vehicle-related disputes)
These bodies can guide you on your rights and help mediate disputes.
Keep all finance documents handy when discussing issues with your lender.
Taking Further Action
Financial Ombudsman Service
If your complaint is about the finance agreement and the lender does not resolve it, you can escalate the case to the Financial Ombudsman Service. They offer a free, independent service to settle disputes.
Consumer Credit Act Section 75 Protection
If you used a credit card to pay for the vehicle or part of it, Section 75 of the Consumer Credit Act may protect you. This means the credit card company can be held responsible if the vehicle or finance agreement is faulty or misrepresented.
Cancelling or Settling Your Agreement
If you want to cancel or settle your car finance agreement early, check the terms carefully. Some agreements have early settlement fees, but you may save money on interest. Always get a clear settlement figure in writing before making payments.
Tips to Avoid Finance Agreement Issues
Always read the full contract before signing.
Ask questions about anything you don’t understand.
Get vehicle inspections done before agreeing to finance.
Keep copies of all paperwork and correspondence.
Use reputable dealers and lenders with good reviews.
Frequently Asked Questions
Can I cancel my car finance agreement after signing?
Yes, you usually have 14 days to cancel under the Consumer Credit Act cooling-off period. After that, cancellation terms depend on your contract.
What happens if the vehicle has faults after purchase?
You may have the right to a repair, replacement, or refund under the Consumer Rights Act if the vehicle is faulty or not as described.
Who do I contact if the finance company ignores my complaint?
You can escalate to the Financial Ombudsman Service, which handles disputes between consumers and financial firms.
Can I switch my motor finance to another lender?
It depends on your agreement. Some contracts allow refinancing or transfer, but check for early settlement fees or penalties.
Is van finance treated differently from car finance?
No, the same consumer rights and protections apply to van finance as to car finance.
Knowing your rights and the right steps to take can turn a stressful finance issue into a manageable situation. If you face problems with your finance agreement, act quickly, keep good records, and seek help from trusted sources. This approach gives you the best chance to resolve the issue fairly and protect your interests as a motorist.
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