Returning a car: Your rights, refunds and how to return

We’ve all bought something online and needed to return it. Fortunately, as with all online purchases, there are consumer laws in place to protect you should you need to return a car bought online too.
In this article, we’ll look at the various consumer protections and laws that exist to protect you when buying a car online. This guide does not constitute legal advice, its aim is to make you aware of the options you have when making a return. If in doubt, confirm details with the dealership and check free, impartial sites like Money Helper (formerly Money Advice Service) and Citizen’s advice. Some rights will be more applicable than others, depending on where and how you bought the car. So, research your rights and check your specific contract for any caveats and clauses. Jump to: • Buying a car online only • Buying a car online or at a dealership • Car deposit refund law in the UK • Buying a car using a credit or debit card • Buying a car from a private seller • Returning a car bought on finance

In most instances, you’ll have to prove the car does not match the description, is not fit for purpose, or is not of satisfactory quality. Crucially, you’ll have to prove this was the case before you bought it.
So, with that said, here are some of the rights you could investigate if you want to get a refund.

The Consumer Contracts Regulations (2013) offers you the right to cancel or return your vehicle from the moment you place your order until 14 days after it has been delivered – provided the entire buying process was completed online and you didn’t have opportunity to see or discuss the goods or services in person.
This 14-day ‘cooling-off period’ can certainly provide a peace of mind, but you need to read your contract and check your rights, just to make sure you’re actually covered. Conditions are likely to apply, and the details will vary in different contracts. For example, you may be allowed to drive a “reasonable distance”, for example under 30 miles, within a set time period before you decide. Fair use policies will also apply in the event of any damage to the vehicle happening while in your care. These Regulations only apply if the whole buying process is done online – collecting and signing for the car on premises, or test driving the car before you buy it, could mean they no longer apply. It’s a great, and extremely helpful regulation that covers a wide range of online purchases including cars – but you need to make sure you’re covered before you rely on it. Again, always check in your contract and consult sites like Money Helper and Citizen’s advice with any questions.

If you’re buying from an online dealer, you should be covered by the same rights as when buying in person. These include:

If you’ve bought your used car from a dealership and find a fault with the car within the first 30 days of purchase, take a look at the “short-term right to reject” rule in the Consumer Rights Act 2015.
You’ll have to prove the fault was there when you bought the car, which can sometimes be tricky, but you can ask for a repair or a full refund if the fault was there already. Give the car a proper inspection on arrival and be sure to get confirmation of any faults or flaws in writing. Always confirm when the 30-day period starts and the date and time it is set to finish. Learn more about the Consumer Rights Act.

Under the Sale of Goods Act 1979, the car you’re buying must be:
• Fit for purpose • Of satisfactory quality • Matching its description If the car has any known faults or defects, the dealer must make you aware of them before you buy it. Make sure you’re happy with the condition of the car before you pay for it. Properly inspect the car upon delivery or collection, note any faults or defects and make sure you have written confirmation from the seller that these were in place before you took ownership of the car.

Whether buying online or at a dealership, the dealer must provide you with details of their returns and cancellation policies. Ask for these and make sure you read and understand them before you sign.
Policies will likely include certain caveats – for example stating you can only travel up to 30 miles in the car, after which the option to return expires – so read through the small print to make sure you understand what you can and cannot do. Your policy might also detail any charges for the return or collection of a vehicle, and whether you’re the one liable to pay these charges. Remember that if you do return the car, you’re liable for any damage you may have caused to it. If you spot damage before or on collection, confirm this with the seller immediately and have them declare in writing that it was already there.

Can I get my deposit refunded if I back out of buying a car?
Generally no, but there are exceptions. As confirmed by The Motor Ombusman and the National Consumer Council; the existing law on deposits is that once you pay a deposit, you have entered into a legally binding contract on both sides. Some dealerships may take a deposit – always check whether this is refundable or not before you commit. Also note that some deposits are only refundable up to a certain point, or until certain criteria have been met. Ask the dealership to clarify under what circumstances a deposit would and would not be returned to you, preferably in writing. If the dealership does state the deposit is refundable, check this is stated on your receipt.

Deposits are generally needed for most things that are going to leave a dent in your bank account, and buying a car is no different. You’ll usually be expected to put down a deposit of around 10% of the total purchase price and although there’s no legal requirement for this, it’s generally seen as standard practice.
Without a deposit, if the dealer begins getting your car ready and you back out, the dealership incurs costs in preparing the car for sale and processing paperwork, such as registration and tax documents. Therefore, a deposit ensures that the cost falls back onto the buyer if they back out. Once a deposit has been paid, you’ve made a commitment far beyond simply signing a piece of paper; you’ve committed to buying the car, so the deposit is typically non-refundable. Dealers may often offer you the chance to put down a deposit to hold the car. If you’re undecided, save your money until you’re ready and only put a deposit down when you’re certain you want to commit to your chosen car.

There are some exceptions whereby you could be entitled to your deposit back, for example, if the manufacturer is unable to supply your car due to production issues or other external unforeseeable issues. Similarly, if the car becomes unavailable for whatever reason, the seller will need to cancel the order and return the deposit.
A refund may also be issued if your finance application is rejected when buying the vehicle, as you will be unable to take receipt of the car. Always refer to your paperwork if you’re unsure.

If your car was bought on a credit card for between £10 and £30,000, you may be covered by section 75 of the Consumer Credit Act 1974. This means the credit card company shares equal responsibility with the seller if you encounter a problem.
Again, you’ll have to prove the problem was there before you bought the vehicle. You’ll only be protected by section 75 if: • The car is faulty, or not of a satisfactory quality • The car has not been delivered • The seller has misrepresented the car “Misrepresentation” and “satisfactory quality” are vague terms, so make sure you confirm exactly what you’re being sold so that, should something go wrong, you can go back and check the description of the vehicle against what you have actually bought. If you believe you have a case to make a return, you should first raise it with the dealership you bought the car from. If they refuse or don’t reply, contact your credit card provider and follow the steps they set out. Learn more about buying a car using a credit card.

If the car doesn’t match the description, or the seller is no longer operating, you could contact your bank about a “chargeback application”. This is where the bank tries to reverse the transaction.
This is not a legal right and will only be successful if there’s enough money in the seller’s bank account to meet the cost. The specifics of how this works and whether it applies will vary, so contact your bank for more details.

Private sales aren’t covered by quite as many rules and regulations as dealerships, but you do still have rights.
First up, the private seller must be legally allowed to sell the vehicle. They cannot legally sell the vehicle if it is stolen, or if it has outstanding finance. The vehicle should also match the description, whether that’s an advert or a verbal description. If you have any doubts about the vehicle, ask for confirmation about the age and condition of the car. Legally, cars must be roadworthy and safe to drive. If they aren’t, then the seller is legally obliged to tell you and you must both agree it’s being bought for scrap or to be repaired at a cost to the buyer. When buying from a private seller online, your rights as the same as when buying in person. You should always get a receipt, and if you have any doubts about the vehicle – seriously consider a vehicle history check. Tips on how to complain when buying a car.

If you’ve bought your car on finance, you have a handful of options available to you depending on your finance agreement and at which point you decide to terminate.

Your first step would be to check your agreement is covered by the Consumer Credit Act. If it is, it should say so at the top of the first page of your credit agreement.
The right of withdrawal under the CCA only applies to your credit agreement and isn’t intended to end any linked contract for the supply of, say, a vehicle. This means that by withdrawing from the credit agreement, you’ll still need to find another way to pay for the vehicle unless the linked contract has its own cancellation or right-to-withdrawal clause. Where the CCA right of withdrawal doesn’t apply, you may still have a right to cancel or withdraw from the agreement if: • Distance Marketing Regulations apply, which allows customers to withdraw within 14 days of signing the agreement, or • Consumer Contracts (Information, cancellation and additional charges) regulations apply, which allow customers a 14-day cooling-off period to withdraw from an agreement to buy goods: where this right is exercised, any linked credit/Hire Purchase agreement is automatically cancelled. It’s important to remember that once you’ve exercised your right of withdrawal, the decision can’t be reversed, and you will not be able to re-enter into the original credit agreement. Therefore, you are still liable to find alternative funding for the vehicle.

You may have the right to settle some or all of the agreement at any time and this is known as “early settlement”.
When you entered into the agreement your finance provider will have outlined in the terms and conditions how you can come to an early arrangement. This may include a fixed charge or a charge based on how early you are terminating the agreement. If the amount you pay in early settlement exceeds £8,000, lenders are entitled to compensation and this cannot exceed 1% of the amount repaid early, or 0.5% if the outstanding period of the loan is less than one year. Lenders must disclose the early settlement compensation to the customer in both the pre-contract information and the actual credit agreement, so check over your documents for clarification.

The CCA allows customers with a regulated Conditional Sale or Hire Purchase agreement to terminate the agreement before the end of the contractual term, but it doesn’t apply to lease agreements.
Voluntary termination is also referred to as the “halves rule” because the customer must pay, or have paid, at least half of the total amount owed to the finance company in order to terminate the contract. It’s not a get-out-of-jail-free card though. The total amount payable includes the amount you borrowed, plus interest, and in some cases, it may also include the price of guaranteed future value. For clarification, “termination” is not the same as “settlement”, because the title to the vehicle will not pass to the customer if they decide to terminate, and whilst voluntary termination is available to all customers who have Hire Purchase or Conditional Sale agreements (including PCP), it may be most beneficial to customers who can no longer afford repayments due to financial hardship. A voluntary termination can only go ahead if the following criteria are met: • Pay or have paid at least 50% of the total amount owed to the finance company. • Bring up to date any arrears that are owed to the finance company, even if this results in more than 50% being paid. • Return the goods/vehicle in a reasonable condition for their age and mileage. • Write to the finance company to explain the option they wish to take – this is known as the “surrender” or “voluntary surrender” letter. The good news is your credit score shouldn’t be affected by voluntary termination, as long as you’ve paid all of your monthly payments on time up to the point return the vehicle. Find out more about leasing here.