A. OK this is fairly straight forward. First of all the vehicle needs to be of merchantable quality and fit for the purpose for which it was purchased under the Sale Of Goods Act. Those rights are added to under section 75 of the Consumer Credit Act. What the finance company has said is incorrect, you can take action against either the dealer or the lender or indeed both. You need to contact your local Office of Fair Trading and send a letter of complaint to the Financial Ombudsman Service. They get very tough with lenders who try to mislead consumers by giving them incorrect information, you can download a complaint form from here:

http://www.financial-ombudsman.org.uk/consumer/complaints.htm