Finance payments for faulty car

The consumer’s issue:

“I bought a vehicle and had multiple problems with it from the date of purchase. Eventually the business agreed to change the car and we walked away with a different make and model. However, shortly afterwards, problems persisted with the new vehicle, and for seven months, the vehicle has still not been right, despite it being fixed. During this time, I have been paying for a finance agreement on a faulty car, and I am therefore seeking a refund of the seven installments.”

The accredited business’ response:

  • The car was returned by the customer on two separate occasions, and we did agree to replace it. This was not a rejection by the customer and we gave them above the CAP valuation value during the exchange of the vehicles.
  • As the consumer has stated, they experienced further issues, which we have fixed, whilst also providing goodwill for the administrative errors that we acknowledged.
  • In terms of the customer’s claim, the refund of the payments should be met by the vehicle manufacturer, rather than ourselves, as we do not feel that we should be liable for this.

The adjudication outcome:

  • The Motor Ombudsman adjudicator noted that the business’ actions to offer goodwill for the administrative errors, and to repair the issues, were the correct remedies under both the Motor Industry Code of Practice for Vehicle Sales, and consumer law.
  • However, the adjudicator also concluded that the law allows the consumer to claim for consequential losses if there was such a breach and that it caused these losses.
  • The customer’s vehicle was only off the road without a courtesy car or other means of transport for a period of six weeks.
  • The adjudicator therefore ruled in favour of the consumer and requested that instead of the business reimbursing the seven payments, that they cover the cost for the period of six weeks to reflect the time that the consumer had paid for the vehicle, but did not have access to one.


  • Both parties provisionally agreed to The Motor Ombudsman’s adjudication outcome.