Can I sell a car under a credit agreement if I do not have a consumer credit licence?

legal updates

A credit agreement will be exempt if it meets the following criteria...

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

The Government has introduced legislation which extends the exemption for instalment credit.

A credit agreement will be exempt if it meets the following criteria:

•    it is repayable by no more than 12 instalments (eg. monthly), and within a period of no more than 12 months;
•    it is a borrower-lender-supplier agreement (i.e. it finances the acquisition of specific goods or services);
•    it is for a fixed amount;
•    it involves no charges or interest (eg. no administration fee);
•    it is not secured on land;
•    it is not an agreement financing the purchase of land;
•    it is not a conditional sale or HP agreement; or
•    it is not a pawn agreement.

Dealers that only enter into, or broker agreements, which meet the relevant criteria do not need to be authorised for consumer credit activities unless they carry on any other kind of credit related regulated activity.

It is the responsibility of dealers to determine whether and how they may be affected by this exemption.

In the event of any doubt then you should seek independent legal advice, as required.

DMS NavigatorDealer Management System software for Car Sales, Aftersales and eCommerce

Our dealers use us to help them be more Efficient and Profitable!

You can use our Dealer and Lead Management software to integrate all dealership departments, both online and physical ; providing all in-house functions; Invoicing, Stock Management, Accounting and Marketing as well as interfacing for advertising, ecommerce and more.

Howard TilneyHead of Strategy / Legal AdvisorRead More by this author

Related Legal Updates

More of the same from the FCA

Dealing with discretionary commission arrangements and concern that customers are not getting a fair deal on GAP (Guaranteed Asset Protection) insurance products.

While We Wait: Preparing for the FCA’s Review on Motor Finance Commissions

As anticipated, the FCA was not particularly helpful when questioned about the various issues of investigating complaints that were outside of the standard retention periods for documentation.

FCA Commission Review: Separating fact from fiction in the wake of scaremongering

Attend a complimentary seminar hosted by the FCA for first-hand information – Scheduled for Wednesday, 24 January 2024.

The FOS reports over 10,000 motor finance complaints: Are we really surprised?

The good news currently is the FCA is focussing its attention on the lender and not our members.

The FCA means business

The FCA are closely monitoring how firms are putting their new rules in place and will take action against those that aren’t following them.

Financial promotion on social media

The FCA’s supervisory approach to financial promotions in social media was issued in 2015.

Another victory, but the problem has still not gone away!

The FOS confirmed in the article they had not yet published any final decisions on commission-related complaints.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.