Can I cancel a finance agreement after 14 days?
Alisa Dan
Yes, you can cancel a regulated car finance agreement within 14 days under the Consumer Credit Act 1974. This Right to Withdraw applies to most Hire Purchase (HP), Personal Contract Purchase (PCP), and Conditional Sale agreements. The 14-day period starts when you sign the contract or receive a copy, whichever is later.
To cancel, you must notify your finance provider in writing, by email, or by phone. You’ll then have about 30 days to repay the credit plus any interest accrued. This ends the finance agreement but not the car purchase — you may still need to pay for or return the vehicle.
The right usually doesn’t apply to Personal Contract Hire (PCH) or agreements signed at a dealership unless arranged online or by phone.
What is the cooling-off period?
A cooling-off period is the short time after signing a finance agreement when you can legally change your mind and cancel without penalty.
In the UK, most regulated car finance agreements — such as Hire Purchase (HP), Personal Contract Purchase (PCP), or Conditional Sale — include a 14-day cooling-off period under the Consumer Credit Act 1974. The countdown begins on the day you sign the agreement or the day you receive a copy, whichever comes later.
During this time, you can notify your finance provider that you wish to withdraw, repay the borrowed amount plus any interest accrued, and end the finance without affecting your credit file. However, cancelling the finance does not automatically cancel the car purchase, so you may still need to pay for or return the vehicle.
What is the cooling-off period process?
First, check when your 14-day window began — it starts on the day you sign the agreement or the day you receive a copy, whichever is later. Then contact your finance provider (the lender, not the dealer) to give Notice of Withdrawal. This can usually be done by phone, email, or letter, as long as it’s within the 14 days. Keep proof of when and how you sent the notice.
Once you’ve withdrawn, the finance agreement ends immediately. However, you still need to repay the amount borrowed, along with any interest accrued during the short time you held the finance. The lender will confirm how much you owe — called the settlement figure — and give you around 30 days to repay it.
Importantly, cancelling the finance doesn’t automatically cancel the car purchase contract. If you already took delivery, you’ll either need to pay for the car using another method or agree on a return with the dealer, depending on their terms.
In short, the process involves three clear steps:
- Notify the lender within 14 days.
- Repay the borrowed amount plus interest.
- Settle any remaining arrangements for the vehicle itself.
Can I take a cooling-off period after 14 days?
No, the cooling-off period ends strictly after 14 days. Once that window closes, the automatic Right to Withdraw under the Consumer Credit Act 1974 no longer applies.
If you still want to end the agreement after 14 days, you have two main options. You can request an early settlement, where you repay the remaining balance and keep the car, or use voluntary termination, which lets you return the car once you’ve repaid at least 50% of the total amount payable. Both options are valid but follow different rules and may involve extra costs such as interest, excess mileage, or damage charges.
Does cancelling car finance within 14 days harm my credit rating?
If you cancel your car finance agreement within 14 days, the contract ends and you must repay the credit plus any interest accrued for that short period. You’ll normally have around 30 days to make this repayment after notifying your finance provider. This right is protected under the Consumer Credit Act 1974 and applies to regulated credit agreements such as Hire Purchase (HP), Personal Contract Purchase (PCP), and Conditional Sale.
Your credit rating will not be harmed, as long as you follow the correct withdrawal process and repay what you owe on time. The cancellation is recorded as a withdrawn agreement, not as a missed payment or negative mark on your credit file. However, failing to repay the balance or missing communication with the lender could affect your credit standing.
It’s important to note that cancelling the finance does not automatically cancel the car purchase. If you’ve already taken delivery, you must either return the vehicle or pay for it using another method, since the purchase and finance contracts are legally separate.
Will I get my deposit back if I cancel my car finance agreement within 14 days?
Not always, it depends on how your car purchase was structured.
If you paid a deposit directly to the dealer for the vehicle, that money relates to the car purchase contract, not the finance agreement. Cancelling the finance within 14 days under the Consumer Credit Act 1974 ends only the credit agreement — it doesn’t automatically entitle you to a refund of the vehicle deposit. Whether you get that deposit back depends on the dealer’s sales terms and how far the purchase has progressed.
However, if you haven’t yet taken delivery of the car, or the dealer agrees to cancel the sale, you might receive the deposit back in full or part. When the vehicle has already been handed over, you’ll usually need to either keep and pay for it by another method or return it if the dealer accepts.