Section 75 protection

OldLavaLamp

Hello,

Am in the grisly process of buying a secondhand car. I've been reading about Section 75 protection, but have a question - does Section 75 protection cover car finance as well as credit cards?

I found this sentence on MSE's pages about buying a car: "If you opt for finance from the dealer, Section 75 will usually apply. Hire purchase is the exception."

There is absolutely no doubt in this world that MSE writers (and most people) know more about finance than I do, but I was a bit confused by that sentence, because I thought car finance was a kind of hire purchase? I'm pretty sure that what I think about most aspects of finance is 100% incorrect, but I just wanted to find out more, and to understand if you're protected by Section 75 if you pay in part with car finance, but not with a credit card.   

I don't have a credit card, because I feel that could be a path to doom, but I can apply for a card if I need to make a credit card payment for Section 75 purposes when I purchase a car.

Any help much appreciated. I hope I'm not coming across as pathetically uninformed, or annoying anyone because I am. 

km1500

Yes 75 will apply if you buy a car on credit - this would typically involve a credit agreement with a finance company.

Hire purchase is not a credit agreement. With hire purchase you basically hire the car so it never belongs to you. At the end of the period you have the option of buying it - usually for a nominal amount.

OldLavaLamp

Thank you - much appreciated

DullGreyGuy

You dont say the value of the car? S75 is limited to items under £30,000.

Credit for a vehicle where the money by the credit provider is paid directly to the dealer (not via your own account) will give S75 protection if the vehicle is under this. If the vehicle is over this then S75A will apply if the dealer arranged the credit but not to credit cards nor if the car is worth over £60,260. Over this amount you are on your own.

born_again

But remember that S75 is not a form of insurance & a get out of jail free card.