Buying a used car is never without its risks. It’s near impossible to know the exact history of a car and the specifics about its current condition. Although there are services like Top1reviewer out there that inspect a vehicle for you before you buy it, many people brave it alone. This is the easiest way to end up buying a faulty car on finance.
As to be expected, there are of course cases where that results in a problem or two with the car. Whether it’s mechanical, electrical or something else entirely, when you buy a faulty car on finance, there are a few different ways your situation can unfold.
The Right to repair
Normally, the first port of call when there is a fault with a car that has been bought on finance is to tell the dealer that the problem exists. This is where your consumer rights kick in. You may or may not need to take to tp a garage first to prove what the damage is and that isn’t something that you have caused yourself, but in most cases, the dealer should admit fault right away and invoke their right to repair.
The right to repair means that before anything else, the dealer should be given the opportunity to put the damage right. Whether they use their own garage or another garage approved by the finance company since they technically own the car, they can have it fixed. The fix should be at their expense and not yours once they accept fault. They may even cover you for a courtesy car too, although inconvenience opens up another option entirely, which we will discuss below,
The Right to reject
In addition to the right to repair for the dealer, you as the buyer have rights of your own. In addition to the rest of the rights that you have when buying a used car, you also have the right to refuse a damaged vehicle. Again, this is usually only usable after you can prove that the fault is not because of you and existed near to the time you bought the car.
The right to reject essentially means that you have the right to reject the vehicle and get your finance refunded for you. In fact, you can use this right within 30 days of buying the car and not even have to allow the right to repair to be used. If after 30 days, however, the right to reject can be used when the dealer has attempted a repair or declined to do so. It can also be used if the repair will cause you major inconvenience in some cases, although this again is muddier to navigate.
Can the Finance Company Refuse to Return it?
So, you decide to return the damaged car and try again. That’s fine. If you have had any bother at any point in the process to prove fault, however, the finance company very well may try to prevent the return and blame you for it instead. While this isn’t always the case, it’s something you need to be aware of at all costs.
The finance company will typically start an investigation. They will inspect the car or they will ask your to inspect the vehicle at your cost, the problem and the circumstances and eventually form a final decision on whether or not they will accept the return of the vehicle. If they do accept, you should be refunded your money or at least most of it depending on your contract, and then be able to go on your way. In other cases, however, they may reject your claim. If that happens, the liability falls to you unless you take things further. That means finishing the contract and paying for the repair too.
Can I appeal?
If your rejection or return is rejected for any reason, you have the right to appeal this. You’ll typically do this through the Motor and Financial Ombudsman. This is a service that is legally run and for use by individuals without the end for legal help or representation unless you choose to get it.
The motor ombudsman will investigate the case themselves, and should they come to a different conclusion than the finance company did on the faulty car, they may well demand the finance company accepts the return and may even compensate you or fine them as a result. This is a large incentive for the finance company to do their bit and keep everything above board.
Can I sell the Car?
Another common question that comes with this topic is whether you can sell the car if it is on finance. That way at least you can end the contract that way instead and be done with it, but sadly, this is not a legal solution to the problem. Because the car technically belongs to the finance provide until your contract is complete and you purchase the car, the car is not yours to sell at any point. Selling a car that has unsettled finance without telling the buyer is actually illegal and classed as fraud.
There are however some companies which specialise in buying cars with outstanding finance. While they may not give you back the money that you have put in, or even what the car is worth for that matter, they may still provide you with a way to end your agreement with your financer and end your contract, albeit perhaps out of pocket non the less.
What If I Part Exchanged My Car?
For many people that buy a car on finance, part exchange is a reliable way to start the process and reduce payments that need to be made throughout by reducing if not acting entirely as a deposit. Although you may get less than the car is worth or might help you get out of your existing finance agreement if the new seller offers that service, should there be a fault with your new financed car, things are more difficult.
In almost every case that you part exchange a car, whether you take car finance or not, you will not be able to get your car back. It’s usually worth more to the seller than to you, and they will possibly have already carried out work on listing, cleaning, repairing or even selling the vehicle to another buyer, and it’s near impossible to get it back if this happens. They may give you a cash refund instead, but this varies from situation to situation.
All in all, buying a faulty car on finance is sadly something that does happen every single day. There are cases across the country occurring all the time that are both resolved and rejected, and it really does come down to each unique situation, just like everything else used car-related.
Cars are complex machines that need careful attention, especially at the point of buying. With so many different areas that can cause problems, getting professional advice is always the best way forward and as you can see, can also go a long way in saving you money, time and a huge deal of stress in the long term too.