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I would like to borrow
£1,500
To pay back over
3.5 years

Representative Example: Borrowing £5,500 over 48 months with a representative APR of 19.8%, the amount payable would be £163 a month, with a total cost of credit of £2,283 and a total amount payable of £7,783.

Can you cancel car finance within 14 days?

If you’ve entered into a car finance agreement, there are certain circumstances under which you might change your mind and wish to withdraw. You might have heard people talk about a ‘cooling off period’.

So, can you cancel car finance within 14 days? The answer is yes – provided you’re still in this early period, you can cancel your agreement with your car finance company. 

The Right of Withdrawal

Commonly called a ‘cooling off period’, car buyers who get finance agreements are entitled to ‘The Right to Withdrawal’, which allows them to legally cancel their finance agreement.

You’ve got 14 days from when you receive the signed agreement via post to cancel. In this 14 day period, you’re under no obligation to give a reason as to why you’ve changed your mind and wish to withdraw from the finance agreement.

Pay half the amount owed and cancel your finance

If you do want to end your finance agreement at a later stage but don’t want to keep the car, you can pay off half your total debt and return the vehicle. You may find it advantageous to utilise this not so well-known clause in the Consumer Credit Act, which allows you to withdraw from a finance agreement early.

If you’ve repaid at least 50% of the total amount of your debt, you are entitled to terminate your finance agreement and return the vehicle to the lender. This can be a useful avenue to remove yourself from an agreement when you don’t require a vehicle any longer, can’t manage repayments, need to cut your monthly expenses or find a better deal elsewhere.

Remember, if you choose this channel for withdrawal, ensure the car you are returning is in good condition and ready for resale. If it isn’t, you will be asked to cover the costs of any repair work needed to get it up to scratch. It’s a good idea to take the car to a registered repairer yourself before taking the car back to the lender to avoid any unexpected costs.

If you've not reached the halfway point of your payment plan, it’s possible to pay the outstanding amount necessary to reach 50% of your debt and get out of your car finance agreement.

If you do decide to contact your lender and end your car finance agreement at an earlier time, ensure you get all the details of your withdrawal in writing and keep copies. This way, you will be protected against being accused of defaulting on your finances.

Private sales

While private sales of used cars can often offer far lower prices than dealerships, they are not bound by the same legislation.

If the car you’ve financed was purchased through a private sale, bear in mind that such transactions are not covered by the same laws of consumer legislation that a business is, such as a car dealership. The private seller is under no obligation to honour a right to cancel request of any kind. No refunds need be provided and if your aim is to convince them to return the vehicle, they are not bound by any law to do so.

It’s essential that you are fully satisfied with any vehicle in a private sale if you are determined to buy using this method.

Advice when you require it

At Car.co.uk, we offer advice to car buyers entering into car finance agreements. If you have any questions or concerns about an agreement then make sure you read our guide on cancelling.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

You’ll be able to get out of a car finance agreement with a UK lender as long as you’ve paid off at least 50% of the amount that you owe (including interest and fees). This is known as a ‘voluntary termination’ and designed to protect people who can no longer afford their monthly repayment.

You have a right under UK law to cancel certain types of car finance agreements early. However, it’s important to read the terms of your agreement to see if this is possible, and whether you will face extra fees.