What to do if your car finance goes wrong — complaints, the 8-week rule and the Ombudsman

When something goes wrong after you've bought a car on finance, it usually falls into one of two very different boxes: a problem with the car itself (it's faulty, not as described, or unsafe), or a problem with the finance agreement (the way it was sold, the cost, the commission arrangement, or how it's being administered). The two boxes have different rules, different deadlines and different bodies you complain to. Mixing them up is the single biggest reason complaints drag on for months longer than they need to.

This guide sets out both routes in the order you should actually use them: complain in writing first, understand what the 8-week window means, know when and how to escalate to the Financial Ombudsman Service (The free, independent dispute-resolution service for regulated financial products in the UK. You don't need a claims company to use it.), and understand where a faulty-car complaint and a finance complaint overlap — and where they don't.

Step one: work out what's actually wrong

A faulty car — one that doesn't start reliably, has a mechanical problem that wasn't disclosed, or isn't as described in the advert — is a dispute with the dealer or seller under consumer law. A problem with the finance itself — you weren't told about a fee, the agreement's total cost wasn't explained clearly, you think the commission arrangement between the dealer and lender was unfair, or repayments were taken incorrectly — is a dispute with the lender or broker who arranged the credit. Some situations touch both: if the car was bought on hire purchase (A car finance product where you pay a fixed monthly amount and own the car outright at the end of the term.) (HP) or a conditional sale agreement, the finance company legally owns the car until the final payment, which gives you an additional route to complain to the finance provider about the car's condition as well as the dealer.

Definition

Hire purchase (HP) ownership

Under an HP or conditional sale agreement, the finance company owns the car until you've made the final payment — you're the registered keeper, but not the legal owner.

Because the finance company owns the goods, it can be drawn into a complaint about the car's quality, not just the paperwork of the loan. This is different from a personal loan used to buy a car, where the loan and the purchase are legally separate and you'd usually complain to the dealer about the car and the lender only about the loan itself.

Step two: put the complaint in writing

Whichever box your problem falls into, the process always starts the same way: a clear, dated, written complaint to the business you have a contract with. That means the dealer for a faulty-car dispute, or the lender or broker for a finance dispute. Email is fine — it gives you a timestamp and a record. State what went wrong, when you noticed it, what you want them to do about it (repair, refund, correction of a fee, or an explanation), and ask for it to be treated as a formal complaint. Keep a copy of everything you send and receive.

Don't skip this step, even if you're frustrated and want to go straight to the Ombudsman. The Financial Ombudsman Service generally won't look at a complaint about a finance business until that business has had a fair chance to sort it out itself, or 8 weeks have passed since you complained — whichever comes first.

The 8-week window, explained

Under the FCA's complaint-handling rules, once you've made a formal complaint to a regulated finance firm, it has up to 8 weeks to investigate and send you a 'final response' — a written outcome that either upholds your complaint, partly upholds it, rejects it, or explains why it needs more time. In practice many complaints are resolved well inside 8 weeks; the deadline is a maximum, not a target. If the firm hasn't sent a final response after 8 weeks, or you're unhappy with what it says, you can take the complaint to the Financial Ombudsman Service.

Escalating to the Financial Ombudsman Service

The Financial Ombudsman Service (FOS) is an independent, free complaints body for disputes between consumers and financial businesses, including car finance lenders and credit brokers. You can refer a complaint once the firm has given its final response, or once 8 weeks have passed without one. There's no cost to you at any stage. An Ombudsman investigator looks at both sides, asks for further evidence if needed, and issues a view; if either side disagrees, an ombudsman can make a final decision that is binding on the finance firm if you accept it.

The general deadline to refer a complaint to the Ombudsman is 6 months from the date of the firm's final response letter. Miss that window and the Ombudsman may not be able to look at your case, so it's worth diarising the date as soon as a final response arrives.

Illustrative example: a fee dispute worked through

This is a simplified, illustrative example only — real outcomes depend entirely on the facts of your agreement and the firm's investigation. Suppose a customer is charged an early-settlement fee of £225 when repaying a car finance agreement, but the agreement's terms only permit a fee of up to 1% of the remaining balance. If the remaining balance was £9,000, the maximum permitted fee would be £90 (1% of £9,000).

In this illustrative case, the customer would complain in writing setting out the calculation above, ask the lender to refund the £135 difference, and give the lender up to 8 weeks to respond. If the lender disagreed or didn't reply, the customer could then refer the matter to the Financial Ombudsman Service within 6 months of any final response. Your own figures, terms and outcome will differ — always check the actual clause in your agreement rather than relying on an example.

Faulty car vs the finance agreement — who do you complain to?

If the car itself is faulty, your primary rights sit under the Consumer Rights Act 2015 against the trader who sold it. Within the first 30 days you generally have a short-term right to reject the car for a full refund if it isn't of satisfactory quality, fit for purpose, or as described. Between 30 days and 6 months, the trader gets one opportunity to repair or replace before you can seek a refund, and the burden is on the trader to show the fault wasn't there at the point of sale. If you bought the car on hire purchase or conditional sale, you can also raise the fault with the finance company, since it owns the goods.

If the problem is with the finance itself — unclear costs, a commission arrangement you weren't told about, incorrect fees, or how affordability was assessed — that complaint goes to the lender or the broker who arranged the agreement, following the written-complaint and 8-week process described above, with the Ombudsman as the escalation route.

If the Ombudsman doesn't resolve it — the small-claims track

The Ombudsman's decision is binding on the finance firm if you accept it, but you're free to reject it and pursue the matter through the courts instead, or use the small-claims track for disputes about a car itself if the Ombudsman route doesn't apply. In England and Wales, Money Claim Online handles claims up to £10,000 with issue fees between roughly £35 and £455 depending on the amount claimed. It's designed to be usable without a solicitor, though it typically takes several months to reach a hearing.

What evidence actually helps your case

Complaints move faster, and are decided more fairly, when they're backed by clear evidence rather than a description of how you feel about what happened. For a faulty-car complaint, that means photographs of the fault taken as soon as you notice it, any warning lights or dashboard messages, and — if the fault is disputed — an independent inspection report from a garage or motoring organisation setting out what's wrong and roughly when it's likely to have started. For a finance complaint, the most useful documents are usually the credit agreement itself, the pre-contract information you were given before signing, any illustration or quote you received, and copies of your statements showing what's actually been charged.

It also helps to be specific about what you're asking for. 'This isn't right' is harder for a firm to act on than 'I believe I've been charged £135 more than the agreement allows, and I'd like that refunded, or an explanation of why the higher figure applies.' A specific, evidenced request is more likely to get a specific, useful answer — and if the complaint does end up in front of an Ombudsman investigator or a court, a clear written record from the start makes the case far easier to assess.

A practical order to work through

1. Work out whether the problem is with the car, the finance agreement, or both.
2. Put the complaint in writing to the trader (for a faulty car) or the lender/broker (for a finance issue), stating what you want them to do.
3. Keep a copy and note the date — the firm has up to 8 weeks to send a final response on a finance complaint.
4. If the final response doesn't resolve it, or 8 weeks pass with no response, refer the complaint to the Financial Ombudsman Service, free of charge, within 6 months of any final response.
5. For a faulty car outside the Ombudsman's remit, consider the small-claims track (Money Claim Online in England and Wales) as a last resort.

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