ZW Car Sales is a small chain of garages selling affordable quality cars across Scotland. Their unique selling point is their competitive finance deals they now provide to customers through a major finance house. Staff process customer credit applications online at the time of purchase, and the decision on whether to extend credit is taken by the finance house, usually within a few minutes of the application being made.

This is a convenient way for the finance house to keep down costs, as they are using staff employed by another firm to carry out most of the processing of new applications for them, and it is also good for ZW Car Sales, as they can increase sales through providing readily available finance deals. Customers opt for credit and hire purchase agreements. ZW Car Sales are considering applying for a Consumer Credit Licence.

The Managing Director has asked you to produce a short report which covers the following -

• A definition of a consumer credit agreement
• An explanation of the legal relationship between ZW Car Sales and the finance house in relation to Section 75 of the Consumer Credit Act 1974.
• The differentiation between a credit sale and a hire purchase agreement.
• When debtors have the right to cancel a consumer credit agreement.
• What does a business need to do to get a consumer credit licence and what is the purpose of the licence?

q1) what is the main relationship of zw car sales and the finance house?

q2) when is the 5 day cooling off period allowed in regards to when debtors can cancel a consumer credit agreement.

q3) what happens if you do not get a consumer credit license ?