Faulty used car on finance: who has to fix it, the dealer or the lender?
You drive home in your used car, the warning lights come on a week later, and the dealer suddenly becomes hard to pin down. If the car was bought on PCP, HP or another dealer-arranged finance agreement, one question matters straight away: who is actually responsible for putting this right?
The short answer is that you should not only chase the dealership. With car finance, the lender matters too. The Financial Ombudsman Service explains that in a typical car finance deal, the dealership sells the vehicle to the finance provider, and the finance provider owns the car while you make the monthly payments.
That changes the way you should handle a faulty car complaint.
Start with the basics: your car must match what was promised
The legal starting point is the Consumer Rights Act 2015. Under the Act, a car bought from a trader must be of satisfactory quality, fit for purpose and as described. Used cars do not have to be perfect, but they do have to meet a standard that is reasonable for their age, mileage, price and history.
That means a 10-year-old hatchback with 110,000 miles can legitimately have more wear than a two-year-old approved used SUV. What a dealer cannot do is hide behind age and mileage when the car has a fault that makes it poorer than a reasonable buyer should expect.
Citizens Advice says you may have a right to a repair, the cost of a repair, or some or all of your money back if the car is damaged, does not work properly, or does not match the advert or description you were given.
Dealer or lender? In practice, treat it as both
If your car is on PCP or HP, do not make the mistake of arguing only with the selling dealer while ignoring the finance company.
The cleanest route is to complain to both, in writing, on the same day.
Tell the dealer what has gone wrong, when it started, and what remedy you want. Send the same evidence to the lender and make clear that the car was supplied under a finance agreement. If the dealer starts dodging calls or insisting the matter is "nothing to do with them", the lender is still in the frame.
This is where finance can actually help. A reluctant dealer is not always the end of the story when a regulated finance provider is involved.
If the fault appears in the first 30 days
This is the most important window.
Section 20 and section 22 of the Consumer Rights Act create a short-term right to reject, and section 22 sets the time limit at 30 days from the point the legal conditions are met.
In plain English, if the car is not of satisfactory quality, not fit for purpose or not as described, you can be entitled to reject it within the first 30 days and ask for a refund.
That does not mean every small annoyance justifies rejection. A minor issue that is easy to fix may lead to an argument over whether the car is fundamentally faulty. But if the problem is serious, persistent or clearly inconsistent with what you were sold, the first 30 days are the strongest position you are likely to have.
The practical point is simple: do not drift past day 30 while you wait for vague promises. Put your complaint in writing as soon as the fault appears.
What changes after day 30
After the short-term rejection window, the usual route is repair or replacement first.
Section 23 of the Consumer Rights Act says that if the consumer requires the trader to repair or replace the goods, the trader must do so within a reasonable time, without significant inconvenience to the consumer, and at no necessary cost to the consumer.
That matters in used car disputes because dealers sometimes try to send buyers away with endless delays, partial fixes or pressure to pay towards the work. The law gives the seller one clear chance to put the car right. It does not give them an unlimited number of bites at the cherry.
If the repair fails, takes too long or causes major inconvenience, the next stage can be a price reduction or a final rejection under section 24.
Why the lender can be useful when the dealer goes quiet
The Financial Ombudsman Service deals with complaints from motorists who say their car is faulty or not of satisfactory quality. Its guidance also makes clear that when it upholds a complaint, the finance provider may be told to repair the car, replace it, reduce the price or allow the customer to give the car back and end the agreement, depending on what is reasonable.
That is exactly why a finance case should not be treated like an ordinary row with a dealer over a cash purchase.
If the dealer is dismissive, the lender may be far more responsive once it sees a clear paper trail with photographs, diagnostic reports, the advert, the invoice and your timeline of events.
The mistakes that weaken your position
A lot of buyers make their case harder than it needs to be. The most common mistakes are:
- relying on phone calls instead of email
- waiting too long because the dealer says it will "sort it next week"
- authorising repairs elsewhere before giving the seller and lender a fair chance to respond
- complaining about one fault when the advert, service history or sales pitch may show the car was also misdescribed
- keeping poor records of warning lights, breakdowns, invoices and recovery costs
If the issue is serious, start building your evidence file immediately. Save the advert. Photograph the dashboard warnings. Keep every invoice, text and email. If a garage diagnoses the fault, ask for the report in writing.
What counts as a fair complaint and what probably does not
Not every problem with a used car is a winning claim.
Citizens Advice points out that you will not usually be entitled to a remedy if you were told about the fault before buying, if you should reasonably have spotted it on inspection, if you caused it yourself, or if it is normal fair wear and tear for the vehicle’s age and use.
That is why context matters.
A failed gearbox on a recently bought, low-mileage approved used car is one thing. Brake pads wearing out on an older high-mileage car after significant use is another. The stronger your complaint, the more clearly you can show that the fault was not simply ordinary wear that any reasonable buyer should have expected.
A simple complaint route that usually works best
If your used car on finance develops a fault, this is the most sensible order to follow:
- Stop using the car if the fault makes it unsafe or likely to worsen.
- Email the dealer with the fault details, the date it appeared, and what you want them to do.
- Send the same complaint and evidence to the finance company.
- Keep everything in writing, including any proposed repair plan.
- If the response is weak, delayed or disputed, ask the lender for its final response.
- If you still get nowhere, take the complaint to the Financial Ombudsman Service.
The Ombudsman says you can go to it if the company does not send a final response letter within eight weeks, or if you are unhappy with the response it sends.
What if the dealer says the warranty should deal with it?
Be careful here.
A warranty can help, but it does not replace your basic legal rights. Dealers sometimes try to push buyers towards a third-party warranty claim because it is easier for the dealer than dealing with a proper rejection or repair complaint.
If the fault amounts to a breach of your consumer rights, the conversation should not be reduced to "claim on the warranty and see what they say". The warranty is an extra product. Your legal rights sit above that.
Can you stop paying the finance?
This is where people get into trouble.
A faulty car dispute and a missed finance payment are two separate problems. If you simply cancel the direct debit without agreement, you can create arrears and damage your credit file while the argument about the car is still unresolved.
The safer approach is to complain formally, state the remedy you want, and ask the lender what it expects while the case is investigated. If the dispute is serious, take independent debt or legal advice before withholding payments.
When this topic matters most
This is especially worth knowing if you bought the car because dealer-arranged finance gave you confidence that you had more protection than a private cash sale.
In many cases, that confidence is justified, but only if you use the right route. Buyers who keep all the pressure on the salesperson and none on the lender often make life harder for themselves.
The bottom line
If your used car was bought on finance and turns out to be faulty, do not frame it as a fight with the dealer alone.
Under a typical PCP or HP agreement, the lender has a direct interest in the deal and may be the route that finally gets action when the showroom stops helping. Complain early, put everything in writing, use the 30-day window properly if it applies, and keep the Financial Ombudsman in reserve if the lender does not put things right.
That approach gives you a far better chance than waiting for one more call back that never comes.
