When you take out vehicle finance as an individual or a sole trader, your agreement is usually regulated by the Consumer Credit Act 1974, and the vehicle is covered by the Consumer Rights Act 2015. Together they give you important rights: to change your mind, to end the agreement early, to protection from repossession, and to a car that’s of satisfactory quality. This guide sets them out in one place.
In short
If your vehicle finance is regulated, you usually have the right to withdraw within 14 days, to settle early with an interest rebate, to hand the vehicle back once you’ve paid half the total amount payable (HP and PCP), and to protection from repossession without a court order once you’ve paid a third. If the vehicle is faulty, the finance company is responsible under the Consumer Rights Act. You can complain to the Financial Ombudsman for free.
Is your agreement regulated?
Most finance for individuals is regulated by the Consumer Credit Act. Your agreement should say so near the top, usually with the words “Regulated by the Consumer Credit Act 1974”.
Agreements with limited companies aren’t regulated, and some business agreements over £25,000 made mainly for business can be exempt. If your agreement isn’t regulated, your rights depend on the contract. See business vehicle finance.
Your main rights
| Right | What it means | Applies to |
|---|---|---|
| Information before you sign | Clear pre-contract information and an explanation of the key features | Regulated credit |
| 14-day withdrawal | Withdraw from the credit within 14 days of signing, repaying what you borrowed plus interest for the days you had it | Most regulated credit |
| Early settlement | Pay off the agreement early, usually with a rebate of future interest | Regulated credit |
| Voluntary termination | Hand the vehicle back once you’ve paid half the total amount payable | Regulated HP and PCP |
| Protection from repossession | A default notice first, and a court order usually needed once you’ve paid a third | Regulated HP and PCP |
| Fair treatment if you’re struggling | Lenders must consider suitable help and tell you about free debt advice | All FCA-regulated lending |
| A vehicle of satisfactory quality | The finance company is responsible for faults | HP, PCP and leasing |
| Free complaints service | Complain to the Financial Ombudsman if your complaint isn’t resolved | FCA-regulated firms |
Rights when things go wrong
- Struggling with car finance payments: what lenders must do, your options, and when the lender can take the car back.
- Faulty car on finance: rejecting the car, repairs and refunds, and complaining to the finance company.
Rights when you want to end the agreement
- Ending your finance agreement: every option in one place.
- Voluntary termination: the 50% rule explained.
- Settling early: how settlement figures and rebates work.
Rights with leasing
Car and van leasing (contract hire) is a hire agreement, not credit. You still have consumer rights if the vehicle is faulty, and you can complain to the Ombudsman, but you don’t have the right to voluntary termination, and ending a lease early usually means paying a charge. See car leasing.
How to complain
- Complain to the lender in writing, saying what’s wrong and what you want it to do.
- Wait for a final response. The lender usually has up to eight weeks.
- Go to the Financial Ombudsman Service if you’re unhappy with the answer or haven’t had one in eight weeks. It’s free, and you don’t need a claims company or solicitor.
For complaints about how commission was handled on car finance taken out between 2007 and 2024, see car finance compensation: where the FCA scheme stands.
Your rights FAQs
Can I cancel car finance after signing?
With most regulated agreements, you can withdraw from the credit within 14 days of signing. You’d need to repay the amount borrowed, plus interest for the time you had it. This usually cancels the finance, not the purchase, so you’d need another way to pay for the car.
Can the finance company take my car without a court order?
Not once you’ve paid at least a third of the total price on a regulated HP or PCP agreement, unless you agree. Before that, the lender must still send a default notice first and can’t enter your home without permission or a court order.
Do I have the same rights on a used car?
Yes. Your finance rights are the same, and the Consumer Rights Act covers used cars, judged by their age, mileage and price.
Do these rights apply in Scotland and Northern Ireland?
The Consumer Credit Act and Consumer Rights Act apply across the UK, but some details, such as court procedures and time limits for claims, differ in Scotland.