Legal protection
This is an outline of the law that applies when you buy a car on finance. You should talk direct to your finance provider or seek professional legal advice if you are unhappy about any aspect of your finance.
You can also get advice from Consumer Direct or your local Citizens Advice Bureau.
Car dealers who offer finance will have been issued a consumer credit licence by the Office of Fair Trading, which can refuse the licence if an individual or a company is unsuitable. Trading without a licence is a criminal offence and can result in a fine and/or imprisonment.
Individual consumer motor finance agreements are covered (“regulated”) by the Consumer Credit Act 1974. This means your agreement will be laid out clearly and transparently, with your rights and responsibilities clearly spelt out.
Detailed laws also lay down:
 | what must appear in credit advertising - ensuring that motor finance advertising is clear and simple to understand. |
| rules about ‘up-front’ information which must be disclosed to you before signing a regulated consumer credit agreement – enabling you to shop around and understand key features of the deal. |
| | rules about your rights to settle a finance agreement early and how settlement figures are worked out. |
Additional protection also exists for customers arranging finance through dealers. As long as the contract price is more than £100, the finance company may be equally responsible with the dealer if your motor car is faulty.
Dealers who sell or recommend insurance-based products, such as extended warranties or payment protection insurance, are regulated by the Financial Services Authority (FSA). Dealer staff will have received specialist training to sell or recommend these products.
