Contact your local trading standards office. See if the telephone number is noted in your local council authorities website or if not phone Consumer Direct. www.direct.gov.uk/en/Dl1/Directories/UsefulContactsByCategory/Governmentcitizensandrightscontacts/DG_195948
My understanding is that what the garage is telling you is wrong. If the car was to be bought on finance and the car is not fit for purpose, they have to cancel the purchase and finance, arranging to refund any deposit you have paid.
See if Trading Standards will contact them on your behalf.