CRA 2015 + Consumer Credit Act 1974 — Vehicle Finance

How to Reject a Faulty Car on PCP Finance — UK Consumer Rights

You can reject a faulty car bought on PCP (Personal Contract Purchase) — but the process is different from a cash purchase in one critical way: your legal claim is against the finance company, not the dealer. The Consumer Rights Act 2015 still gives you the same rights to reject, repair, or replacement. But who you direct those rights at, and the escalation path if they refuse, are specific to PCP finance.

Why Is a PCP Rejection Different from a Cash Purchase?

When you buy a car on PCP, the structure of the transaction is different from paying cash. The finance company pays the dealer for the car. The finance company then supplies the car to you under a regulated finance agreement. You are paying the finance company — not the dealer — in monthly instalments.

This means the finance company is the legal counterparty for your consumer rights claim under the Consumer Rights Act 2015, not the dealer. You may contact the dealer and they may cooperate — but your formal legal claim must go to the finance company.

Additionally, PCP disputes are regulated by the Financial Conduct Authority (FCA). If the finance company refuses to resolve the dispute, you escalate to the Financial Ombudsman Service (FOS) — not Trading Standards or a general ADR scheme.

Cash Purchase

  • Claim against the retailer/dealer
  • ADR: Motor Ombudsman or general ADR
  • Escalation: Trading Standards, county court
  • No regulated finance layer

PCP Purchase

  • Claim against the finance company
  • Regulated by the FCA
  • Escalation: Financial Ombudsman Service (FOS)
  • Finance agreement unwound on successful rejection

How Do You Reject a Faulty Car on PCP Step by Step?

1

Identify the finance company

Your finance agreement paperwork names the finance company (e.g. Volkswagen Financial Services, Black Horse, MotoNovo, Santander Consumer Finance). This is who you write to for your CRA claim.

2

Document the fault immediately

Take dated photos and video. Note when the fault first appeared, whether you have had it inspected, and what the dealer said (if you contacted them). Build your evidence pack before writing formally.

3

Write to the finance company — not just the dealer

Send a formal written complaint to the finance company citing: the fault, CRA 2015 (s.20 if within 30 days, s.23/s.24 if beyond), your demand (rejection and unwinding of the finance agreement), and a 14-day response deadline.

4

Copy the dealer

Send the dealer a copy for information. They may cooperate — some dealers resolve the issue directly to protect their finance company relationship, even though the legal obligation sits with the finance company.

5

If refused, escalate to the Financial Ombudsman Service

The FOS is free to use for regulated finance complaints. You can refer your complaint to the FOS 8 weeks after your complaint to the finance company (or immediately if they issue a final response before 8 weeks). FOS decisions are binding on the finance company.

What Happens to the Finance Agreement If You Successfully Reject the Car?

If your rejection is accepted, the finance agreement is unwound — meaning it is treated as if it never existed. In principle:

  • You return the car to the finance company (not the dealer)
  • The finance agreement is cancelled
  • You should not owe the remaining balance
  • Any deposit you paid may be recoverable
  • Any payments already made may be partially or fully recoverable depending on the circumstances and whether a deduction for use applies

In practice, finance companies often try to negotiate rather than fully unwind — they may offer a replacement vehicle, a repair, or a partial settlement. Whether to accept depends on your priorities and the strength of your position. The Fight-Back System includes the negotiation decision framework for PCP rejections.

Frequently Asked Questions About Faulty Car PCP Rejections

Can I reject a faulty car bought on PCP?

Yes. The Consumer Rights Act 2015 still applies to PCP purchases. However, with PCP, the finance company is the legal owner of the car and your contract is with them. Your rejection is directed at the finance company, not the dealer — even though the dealer sold you the car.

Who do I complain to about a faulty car on PCP — the dealer or the finance company?

The finance company. With PCP, the finance company purchased the car from the dealer and supplied it to you. Your formal CRA claim must go to the finance company. You can copy the dealer, who may cooperate, but the legal obligation sits with the finance company.

What happens if I reject a faulty car on PCP — do I owe the remaining finance?

If you successfully reject the car, the finance agreement is unwound. You should not owe the remaining finance payments. You return the car, and any payments already made may be partially recoverable. The finance company is responsible for unwinding the agreement.

What is the time limit for rejecting a faulty car on PCP?

The short-term right to reject applies within 30 days of taking delivery. After 30 days, you have repair/replacement rights under CRA s.23, and if that fails, the final right to reject under s.24. The FOS accepts complaints well beyond 30 days — act promptly once a fault is identified.

What if the PCP finance company refuses to accept my rejection?

Escalate to the Financial Ombudsman Service (FOS). The FOS is free, typically resolves within months, and its decisions are binding on the finance company up to £415,000. You do not need a solicitor.

Related guides in this network:

Faulty Goods Fight-Back System

PCP Rejection — Complete Letter & Process Guide

The Fight-Back System includes the PCP rejection letter template, the FOS escalation guide, and the complete PCP dispute process — from fault identification to finance agreement unwinding.

Get the Fight-Back System — £27

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