The Consumer Credit Act 1974 (CCA) is the foundational law protecting UK car finance customers. Its most important provisions for car buyers are: the right of voluntary termination once you have paid 50% of the total amount payable (Section 99); protection from unfair repossession (once you have paid one-third, the lender needs a court order -- Section 90); the right to early settlement with an interest rebate (Section 94); and specific advertising and pre-contractual disclosure rules requiring clear APR and total charge for credit. These rights apply to regulated credit agreements, which include virtually all consumer PCP and HP deals in the UK.
CCA key consumer rights for car finance
| Section | What it gives you | When it applies |
|---|---|---|
| Section 90 (Protected goods) | Lender needs court order to repossess once you have paid 1/3 of total | HP and conditional sale agreements |
| Section 99 (Voluntary termination) | Right to end agreement early and return car after paying 50% of total | HP and PCP regulated agreements |
| Section 94 (Early settlement) | Right to settle the loan early with a statutory interest rebate | All regulated credit agreements |
| Section 56 (Antecedent negotiations) | Dealer is agent of the lender; misrepresentations bind the lender | All regulated agreements |
| Section 75 (Connected lender liability) | Lender jointly liable for supplier misrepresentation or breach | Credit card and certain loan-financed purchases above GBP 100 |
| Section 140A (Unfair relationships) | Court can reopen or void an agreement that is unfair to the debtor | All regulated agreements |
What the Consumer Credit Act regulates
The CCA 1974 (as amended, principally by the Consumer Credit Act 2006) regulates 'regulated consumer credit agreements' -- loans and hire purchase agreements to individuals below certain financial thresholds. For car finance, the relevant products are Personal Contract Purchase (PCP), Hire Purchase (HP), and personal car loans from banks or credit card companies. Business finance agreements and agreements above the regulated threshold (currently GBP 25,000, though most consumer car finance agreements qualify) are partially or fully outside the CCA.
All regulated car finance agreements must be overseen by FCA-authorised lenders. The FCA's Consumer Credit sourcebook (CONC) adds further rules on top of the CCA's statutory framework.
Your most important rights
Section 99: voluntary termination (the 50% rule)
Section 99 gives you the right to end a regulated HP or PCP agreement at any time by giving written notice to the lender, provided you have paid (or are willing to pay) at least 50% of the total amount payable. The 'total amount payable' includes your deposit, all monthly payments, any option-to-purchase fee, and -- for PCP -- the balloon (GMFV).
On termination, you return the vehicle in reasonable condition and walk away. Any excess mileage or damage beyond fair wear and tear may be charged. The right exists regardless of your reason for terminating.
Important: voluntary termination is recorded on your credit file as 'terminated' -- not as a default, but some lenders view it negatively when assessing future applications.
Section 90: protection against repossession
Once you have paid more than one-third of the total amount payable under a HP or conditional sale agreement, the goods become 'protected goods'. The lender cannot repossess the vehicle without first obtaining a court order. If they repossess without a court order at this stage, you are entitled to recover all sums already paid and the agreement is terminated.
This protection does not apply to PCP agreements where the car is 'hired' (as in a straightforward lease). It applies specifically to HP and conditional sale.
Section 94: early settlement
You can repay a regulated agreement early at any time. On doing so, you receive a statutory rebate of interest. The rebate calculation uses the Rule of 78 method (for older agreements) or a simple actuarial method. The lender must provide you with an early settlement figure on request within 7 working days.
Section 75: connected lender liability
If you use a credit card or certain types of credit to buy a car (for example, using a credit card as a deposit), the card issuer is jointly and severally liable with the supplier for misrepresentation or breach of contract on purchases between GBP 100 and GBP 30,000. This means if the dealer goes bust or misrepresented the car, you can claim from the credit card company. Note this does not apply to debit cards.
FCA oversight: what changed in 2026
In March 2026, the FCA published Policy Statement PS26/3 establishing a motor finance consumer redress scheme for PCP and HP customers who were affected by undisclosed commission arrangements between lenders and dealers between 2007 and 2024. The scheme is expected to return approximately GBP 7.5 billion to affected customers, with an average redress per agreement of around GBP 830.
As of May 2026, the scheme was subject to legal challenges and was paused pending court hearings expected in late 2026. Affected customers should monitor fca.org.uk for the current position. You do not need to take any action now to preserve your right to claim -- the scheme will contact eligible customers.
2026 reform context
The UK government published proposals in May 2026 to reform the consumer credit regime by repealing and replacing the CCA 1974 with updated legislation. The core statutory protections (voluntary termination, protected goods, early settlement) are expected to be retained in the new framework, but the reform will update the legal architecture. The CCA 1974 remains in full force until any new legislation takes effect.
Pre-contract disclosure rules
Before signing any regulated car finance agreement, the lender is legally required to provide:
- A Standard European Consumer Credit Information (SECCI) form or equivalent Pre-Contract Credit Information
- The representative APR prominently displayed
- The total charge for credit (total interest and fees)
- The total amount payable
- Cooling-off period rights (14 days for most regulated credit agreements)
Under the CCA and the Consumer Credit Directive, you have 14 days from the date the agreement is made (or from the date you receive a copy, whichever is later) to withdraw from most regulated credit agreements. If you withdraw, you must repay any credit already received within 30 days. This right applies to personal car loans; HP and PCP agreements are slightly different -- check the specific agreement.
Frequently asked questions
Does the Consumer Credit Act apply to all car finance?
Can I exercise voluntary termination if I am in arrears?
Does voluntary termination affect my credit score?
What is the FCA motor finance redress scheme and who is eligible?
Can I use Section 75 to claim if a car I bought on HP is faulty?
Sources & further reading
- FCA -- PS26/3 Motor Finance Consumer Redress Scheme
- The Car Expert -- Voluntary Termination of PCP or HP
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
