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Cancelling a car loan: returning the car thanks to the financing

If you financed your car via a loan from the dealer's or manufacturer's bank, the purchase and the loan are often 'linked contracts'. This can help you: if you validly cancel the loan contract, the purchase contract also falls away, you return the car and are out of the financing. The prerequisite is an existing right of cancellation.

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Your chances of getting your money back

Consumer loans generally have a 14-day right of cancellation; the deadline only begins with proper cancellation information. If this was faulty, the right of cancellation may exist longer, which is to be carefully checked in each individual case.
If the car purchase and the loan are linked contracts (§ 358 BGB), the cancellation of the loan also covers the purchase contract: you return the vehicle and do not have to continue the financing.

What you should do now

  1. 1

    1. Check the linkage

    Was the loan arranged via the dealer and did it serve solely to finance the car? Then there is usually a linked transaction.

  2. 2

    2. Have the cancellation information checked

    Have the cancellation information and mandatory details in the loan contract professionally checked; errors can extend the right of cancellation.

  3. 3

    3. Declare the cancellation

    If there is a right of cancellation, declare the cancellation of the loan in writing to the bank.

  4. 4

    4. Clarify the reversal

    Car back, financing ended; however, compensation for use/value and the kilometers driven can play a role. Because of the complexity, legal advice is sensible.

How to spot the scam

  • The cancellation information in the contract seems unclear or incomplete.
  • You are told that a cancellation is 'excluded after such a long time', without checking the instruction.
  • The dealer pushes for quick follow-up financing.

Frequently asked questions

Can I return my financed car?

If the purchase and loan are linked contracts and you validly cancel the loan contract, the purchase also falls away (§ 358 BGB): you return the car and are out of the financing. The prerequisite is an existing right of cancellation.

How long can I cancel?

Regularly 14 days from proper instruction. If the cancellation information was faulty, the deadline may not have begun to run and the cancellation may still be possible later. This must be checked in each individual case.

What disadvantages does the cancellation have?

In the reversal, compensation for use or value and the kilometers driven can be taken into account. Whether the cancellation is worthwhile depends on the individual case; get advice before taking the step.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.