An agreement is normally (unless one of the exemptions applies) regulated when it is entered into with a private individual, sole trader or partnership of up to 3 partners.
A customer entering into a regulated agreement must be made aware of their rights and obligations. Agreements should include details relating to the customer, vehicle and finance arrangements and make clear all contractual terms, in particular:
The amount and timing of repayments.
The Annual Percentage Rate (APR) on purchase agreements.
The protection and remedies available to the customer under the agreement.
An unregulated agreement gives no additional statutory protections to the customer. They can be signed on or off trade premises and there is no requirement to show an APR. There are also no statutory termination or repossession rights or protections for the customer.
An exempt agreement is one which would normally be regulated but falls into one of the exemptions. The customer will not receive the same level of protection as if the agreement were regulated, but will still have some protection under the unfair relationship provisions in Sections 140A to 140C of the Consumer Credit Act 1974.