Legal Article - Business Law

Credit Advertisements

A Simple credit advertisement can only include as a maximum:

• Name (as on Consumer Credit Licence)

• Address

• Phone number

• Logo

• Occupation eg car finance

Needless to say these advertisements are generally easy to manage. They are generally used to keep the name in the public eye eg football side boards, drinks coasters, supermarket till rolls etc.

You cannot include cash price in a simple advertisement. If you wish to give a little more information then you need to upgrade to an Intermediate credit advertisement.

For the majority of Intermediate credit advertisements for motor dealers then they will
include:

• Name (as on Consumer Credit Licence)
• Address or Phone number
• Cash Price
• APR
• Deposit (optional)

The statements:

“Written quotations on request”

“Subject to status”

“A guarantee may be required” (if applicable)

This type of advertisement is often used as a small block advertisement quoting vehicles for sale in a local newspaper for a particular week. If the APR varies with price then a ‘typical’ APR (and Deposit) if applicable can be used. We would suggest a mid priced vehicle be selected for this purpose.

Please note the following points:

• The name/address/phone number is not necessary if the advertisements are on, say, a window display or a leaflet at the premises.

• If any mention is made of the availability of credit and cash prices are shown then the APR must be given.

• If deposits are shown then again the APR must be given

• No more information than that given above can generally be given in typical motor dealer advertisements at the Intermediate level. Any mention of, say, ‘monthly’ relating to repayments or ‘2 years to pay’ or the amount of repayments then the advertisement needs to be upgraded to a Full credit advertisement.

The beauty of a Full credit advertisement is that providing you include the minimum information necessary, then you can include other information. As with Intermediate where the details vary from one price to another, a typical example can be shown.

The following information must be included in a typical motor dealer Full credit advertisement:

• Name (as on Consumer Credit Licence)
• Address
• Cash Price
• Deposit
• Number of repayments
• Frequency of repayments (eg ‘monthly’)
• Amount of repayments
• Total amount repayable
• APR
• Any additional payments/charges and when they are due (eg option to
• purchase payment for HP agreements, Administration charge etc)

The statements:

“Written quotations on request”

“Subject to status”

“A guarantee may be required”

• Any other restrictions on the availability of the credit

The Full advertisement is generally used for the more ‘busy’ advertisements. Where problems commonly arise is in the mixing of two or more deals to push attractive features such as low deposits, interest free, delayed payments, long payback periods etc.

It is invariably the case that finance companies will not combine, say, interest free with a low deposit. This is not to say that the 2 deals cannot be advertised but always ensure that the minimum information is given for each deal. 

It may be that one deal could be catered for as an Intermediate advertisement and the other one as a Full advertisement.

Always also keep in the back of your mind, however, that you could be prosecuted for giving a misleading advertisement. So make it clear by breaking up the whole advertisement into the separate deals and treating each deal separately.

There are certain requirements for credit advertisements in general and for typical motor dealer advertisements these are as follows:

• The APR must be more prominent than any other interest rate (eg flat rate)

• The APR must be as prominent as the other numerical information except the cash price e.g. a deposit amount, number amount or frequency of repayments and other charges, any credit repayment, any period of time.

• All financial information must be easily legible, clear and together as a whole. This is particularly important in the development of web sites.

• The expression ‘0%’ or ‘interest free’ should not be used unless the customer pays no more than the cash price. As well as the ‘top line’ cash price this also means that you can’t adjust part exchange values between cash and interest free credit deals.

• The expression ‘weekly equivalent’ or similar should not be used unless weekly payments are provided for under the terms of the agreement. 

• Expressions that make the deal on offer sound better than the deals generally on the market, unless you are prepared to identify other dealers and their terms. 

For instance the expression ‘low rate finance’ is not permitted unless you use a Full advertisement and compare your rate with another persons similar deal and identify that dealer.

Published: 16 Mar 2011

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