Interesting Info 27 Apr 2014

Adequate Explanations

Important Information Relating to Your Conditional Sale Agreement

You should make sure you understand what is involved before entering into the agreement. Ask yourself the following questions:

(a) Is this product suitable for what I want to use it for?

The credit provided under the agreement is to finance the purchase of specific goods. The product is generally suitable for medium-term borrowing, for example over 2 to 5 years. The agreement is likely to be unsuitable if you want to repay the borrowing over a period shorter than one year. If this is your need, this product may not be appropriate.

As the interest rate is fixed, your repayment will also be fixed in accordance with the repayments schedule agreed with the finance company (see your finance agreement for details).

(b) How much will the credit cost me?

The principal costs of the credit are set out in the Pre-Contract Credit Information document (also known as Standard European Consumer Credit Information ‘SECCI’), including details of the repayments, any fees or charges, the total amount you will have to pay and the interest rate. The Pre-Contract Credit Information document also shows you the APR, which may assist you in comparing the overall cost of credit. You should consider whether you can afford the monthly repayments, even if your circumstances change.

(c) What special features might this agreement have that I need to be aware of? Particularly anything that may impact on what I am required to pay?

You have the right to repay all or some of the credit early. However, if you wish to do this, you will be charged interest as laid out in the terms and conditions of the agreement. In order to meet your needs, the finance company may have arranged a bespoke repayment schedule with you. This may include a large final repayment – often referred to as a “balloon” payment. If this is the case you should review the agreement and amounts of repayments carefully, to ensure you understand your obligations and that you have the funds to make the repayments on their scheduled dates.

Under the terms of your agreement, you will not become the owner of the goods, until you have made all the payments, which are due to the finance company.

You should carefully review the terms of your agreement to ensure that you can meet any restrictions concerning the use and insurance of the goods.

If you do not repay the finance company at the required times, they may take legal action to repossess the goods. If you have paid one third (or more) of the total amount payable, the finance company may need to get a court order before doing so.

If additional Security in the form of a Guarantee and Indemnity is to be taken, the details will be set out in section 2 of the Pre-Contract Credit Information document. Where a Guarantee and Indemnity

is taken and you break the terms of the agreement the finance company will send you a default notice (with a copy to the guarantor/indemnifier) giving you a chance to put things right. If you fail to do so,

the finance company can claim repayment of the outstanding sums due to them from the guarantor/indemnifier. Once the outstanding sums due to them have been repaid, the guarantor/indemnifier may have the right to recover from you any moneys paid to the finance company under the Guarantee and Indemnity. That would be a private matter between you and the guarantor/indemnifier and would not involve the finance company.

(d) What could happen if I can’t keep up repayments?

Missing and/or late payments could have severe consequences for your finances, including making obtaining credit more difficult in the future because the finance company will report non-payment to the credit reference agencies. Any failure to pay will adversely affect your credit rating. If you miss payments you will also have to pay the finance company charges and other fees as set out at section 3 of the Pre-Contract Credit Information document (the part with sub-heading ‘Costs in the case of late payments’), plus the costs of the finance companies legal action (as applicable).

If you fail to repay what is owed the finance company may have the right to repossess the goods financed under the agreement. The goods may be sold to recover any sums owing by you, and if there is a shortfall after the sale you will be liable for any sums outstanding.

The finance company may also obtain a county court judgment (‘CCJ’ – known as a decree in Scotland) and this will affect your ability to obtain further credit.

Except in Scotland, the finance company may be able to apply to the court for a charging order on any home that you own to enforce the judgment if you do not pay. A charging order on the property normally means that, on its sale, what is owed to the finance company must be paid out of the sale proceeds.

(e) What withdrawal rights do I have?

You have a right to withdraw from the agreement, without giving a reason, within 14 days commencing the day after you receive notification from the finance company that the agreement has been executed by them. You can exercise your right to withdraw by notifying the finance company either in writing to the address set out on the finance agreement or by phone.

Please note, that if you withdraw, you must repay the credit in full. You will have 30 days to repay them the full amount (in cleared funds) starting from the day you notify them.

(f) Do I need more information before deciding?

We hope that this and the other information provided contains everything you need to know about the agreement to allow you to make an informed decision about whether to take the credit and enter into the agreement with the finance company.

Please use the information to ensure that the agreement meets your requirements.

(g) What if I have more questions?

If you have any further questions relating to the agreement or the proposed credit, please contact us.

(h) Will I have sufficient time to consider the Pre-Contract Credit Information document?

The Pre-Contract Information document will be sent to you along with the Conditional Sale Agreement. We recommend you take time to consider the contents of the Pre-Contract Information document before signing the Conditional Sale agreement.

Please only sign the credit agreement when you are satisfied that the product and the terms of the credit are right for you.

Print This Page