Credit Hire Agreements Exempt from the Consumer Credit Act: What You Need to Know
Credit hire agreements are becoming increasingly common in the world of personal injury claims. If you`re involved in a car accident that wasn`t your fault, you may be offered the option of hiring a replacement vehicle while yours is being repaired. The cost of this hire car is then claimed back from the at-fault driver`s insurance company.
Credit hire agreements have been the subject of much controversy in recent years. One of the key issues is whether or not they fall under the auspices of the Consumer Credit Act. In this article, we`ll explain what the Consumer Credit Act is and whether or not credit hire agreements are exempt from it.
What is the Consumer Credit Act?
The Consumer Credit Act is a piece of legislation that governs the way in which consumers borrow money or purchase goods on credit. It sets out the rights and responsibilities of both the borrower and the lender, and is designed to provide protection for consumers when they`re taking out credit.
The Consumer Credit Act applies to a wide range of credit agreements, including credit cards, personal loans, payday loans, and hire purchase agreements. In general, any agreement where credit is being offered to a consumer falls under the remit of the Consumer Credit Act.
Are credit hire agreements exempt from the Consumer Credit Act?
In short, yes. Credit hire agreements are typically exempt from the Consumer Credit Act. This is because they`re not considered to be a form of credit in the same way that a loan or hire purchase agreement is.
A credit hire agreement is essentially an arrangement between a car hire company and an individual who needs a replacement vehicle. The car hire company provides the vehicle on credit, and the individual agrees to pay for it at a later date. However, this payment is not considered to be a loan in the eyes of the law.
As a result, credit hire agreements are not subject to the same regulations as other forms of credit. This can make it difficult for consumers to know exactly what they`re signing up for, and can lead to disputes between the individual and the car hire company.
What are the implications of credit hire agreements being exempt from the Consumer Credit Act?
The fact that credit hire agreements are exempt from the Consumer Credit Act can have a number of implications for consumers. For example, they may not have access to the same level of protection as they would if they were taking out a traditional loan or hire purchase agreement.
This lack of protection can make it easier for car hire companies to charge higher rates for their vehicles, and can lead to consumers getting into debt if they`re not able to pay for the hire car when the bill comes due.
So if you`re involved in a car accident and are offered a credit hire agreement, it`s important to be aware of the potential implications. Make sure you read the agreement carefully and understand exactly what you`re agreeing to before signing on the dotted line.
In summary, credit hire agreements are exempt from the Consumer Credit Act. This can make it difficult for consumers to know exactly what they`re getting into when they agree to hire a replacement vehicle. If you`re involved in a car accident and are considering a credit hire agreement, make sure you read the agreement carefully and understand your rights and responsibilities.