CCD is an EU wide directive which aims to establish common rules on consumer credit across Europe that the UK is required to implement by 1st February 2011. Any regulated purchase product(s) sold after the 27th November 2010, with a balance financed up to and including £60,260 are covered by the CCD. Agreements where the balance financed is in excess of £60,260, are with businesses that have exempted themselves, or are for hire products, remain unaffected.
Contracts are the legally binding documents relating to third party suppliers of vehicles and services. Read them carefully before signing, and check the small print. Consider situations such as early termination, excess mileage and dilapidation penalties when considering leasing contracts.
Contract Hire is a straightforward hire agreement that does not offer customers the option to own the vehicle at the end of the contract period. A customer makes monthly fixed payments (plus VAT) throughout the agreed term, and at the end of the contract the customer returns the vehicle (subject to terms and conditions regarding vehicle maintenance, servicing and mileage).
If you sign a credit agreement between you and the lender of the credit to buy the car you want, this means you have agreed to borrow money off them and also to make regular repayments to them to pay back the loan in full.
Credit Protection Insurance is a form of insurance that protects your financial repayments in the event of death, accident, illness, sickness, redundancy or financial insolvency. (Also see PPI)
Credit Reference Agencies are companies that hold information regarding individuals and their past conduct in relation to credit that is of interest to lenders. This information can be used in order to help the creditor make a decision on whether or not to lend the customer money.