Can I cancel a car finance agreement within 14 days

There are various different scenarios to which this question might apply: You may have taken delivery of the vehicle only to find something physically wrong with it; your needs may

Can I cancel a car finance agreement within 14 days

There are various different scenarios to which this question might apply: You may have taken delivery of the vehicle only to find something physically wrong with it; your needs may have changed since buying the car; or you may not be able to keep up with the payments. Let's investigate these cases, and discuss the possible outcomes.

Can you return a car if, after a while, you're dissatisfied with it?

No, you usually cannot do this. However, if you made your purchase from a dealership and want to refinance something else, they may accommodate you in the name of good business. Dealers generally aim to have you return one day when youre ready to make your next purchase, after all.

But, if youre not interested in financing a different car, dont expect an easy ride from that dealership. You dont have any right to return a vehicle if there is nothing wrong with it. Its all on you to do the proper homework, car valuation, test drives, and even a history check on a car before buying it. There needs to be a legitimate reason on why you want to return it, aside from your overall dissatisfaction.

Are you liable for anything if you return a dud car?

No, youre not liable for any expenses. Some good dealerships may even refund you for expenses incurred in returning the car, but this will not always be the case. Be prepared for an uphill battle, as many dealerships will fight tooth and nail to maintain a deal, and will even imply that you cant cancel finance. But, if there is proper legitimacy to your complaint, the law will be on your side.

According to the law, you have 6 months to return a car, but only on legitimate grounds. Not liking the colour of the car, or the fact that its not as quick as you thought it would be, or its tyres are wearing out too fast, or it's using too much fuel for your liking, are not among those reasons. Actual, legitimate reasons are things like the transmission acting faulty and jumping out of gear, or a wheel flying off the car - in other words, safety- or performance concerns are valid reasons to return a car to the dealership.

Typical legitimate reasons to return a financed car:

A lack of disclosure

The salesman/saleswoman is obliged to fully disclose all relevant problems/issues on a specific vehicle with you. This includes registration and other identifying details, as well as known mechanical maladies and known prior accident history.

Be aware that sellers can deduct fees for the wear and tear that a car had experienced, while it was in your possession before returning it. Things such as a paint scrape, missed service, worn tyres or other demonstrable wear and tear are all legally accommodated on the sellers side.

Mechanical failure

Mechanical failure, or demonstrably false indications of performance, provide solid grounds to return a car.

The Consumer Protection Act makes significant use of the word reasonable - and for good reason. If the seller deliberately lies about performance, doesnt disclose pre-existing conditions (such as mechanical issues or a prior accident history) and behaves in a blameless manner with post-sale failure, then you have grounds for a return, provided you take this action within six months.

Defective vehicles

According to OBS  theOmbudsman for Banking Servicesin SA, this is the official stance regarding vehicle defects:

"When you purchase a vehicle from a dealer, the bank does not inspect it in any way. The bank merely relies on the information you provide in your application for finance. Contractually, the bank regards the vehicle as security for the loan. In other words, (it is) an asset that it can be attached and sold, should you default on the loan. The bank is therefore not responsible for any defects in the vehicle you have purchased. You will have to approach the dealer if you encounter any problems with the vehicle."

You can lodge a complaint against a car dealer with theMotor Industry Ombudsmanvia the following channels:

Telephone: 010 590 8378

E-mail:

Fax number: 086 630 6141

Cancellation of a credit finance agreement

The National Credit Act does allow for the cancellation of a credit finance agreement, within 5 business days after it has been signed (Section 121). This cancellation right is however only applicable in very limited circumstances, and there is a specific process that must be followed.

The clause is generally only applicable if the finance contract was concluded and signed at your home or workplace, for example. Most vehicle dealerships are registered as business premises by the bank, and most finance contracts are signed at the dealership. Therefore, this clause is generally not applicable to most vehicle finance contracts.

The purpose of the cancellation clause is to provide for circumstances where salesmen sell goods to consumers and induce them to conclude credit finance agreements rather than pay in cash. Consequently, this clause is generally not applicable to a vehicle finance agreement signed at a dealership or the bank.You can obtain more information on this matter from your legal adviser.

Consumer Protection Act 68 of 2008

Section 20 of the Act provides that a consumer may return goods to a supplier, under certain circumstances, for a full refund. Section 56 of the Act further provides that defective or unsafe goods can be returned to the supplier within a period of 6 months. The supplier must then repair or replace the failed, unsafe, or defective goods; or refund the consumer the price paid for the goods. In this case, "goods" would denote a vehicle purchase.

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