car finance legal owner/reg keeper question

17
Found 26th Jul 2016
ok so i want to get my mum a new car on pcp finance. at the moment she just has an old car so she would be trading that in. The idea is that it will be a surprise, so i'd have it all set up & approved before hand with me taking care of payment, she'll just pick up the new car & trade in her current one.

I have a few queries regarding the process though.

I want the monthly payments to come directly from my bank account.
She will be the main driver on the insurance policy (i might be on as a second driver)
Since the payment is coming from my account would the finance be applied for under my name?
How does it stand as to who is the legal owner/registered keeper? - even if i am insured on the car it's only occasionally i'd use it, so I feel my mum should be the owner/keeper as she will use it 99% of the time but

As i said it's likely i'll be on the insurance as a second driver but I have my own car (which I own & isnt paid monthly) for which I am main driver insured & everything is in my name.
I heard things about how you can't really do this as for example if someone couldnt get finance someone else applies on their behalf or if they are really young etc where it'd probably be higher then someone else takes out the finance. But this is kinda the reverse case.
I have no issues if the finance were to go through my moms name (as there's not reason she wouldnt get) but would it still be able to come out my account directly then?

If anyone can help shed some more information. thanks
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17 Comments
I would think you need to take out the finance in your name if you want the payments from your bank account if it's finance in your mum's name it would be need be her bank account with you maybe arranging to move money over each month, If you both agree you could have a joint account but I think it's better if you are both with the same bank? regarding the keeper and insured issue, this is a separate issue although the person taking the finance out will be the reg keeper as far as the garage is concerned although this can be changed later when the owners papers come from DVLA. hope it helps
Original Poster
but if I do it all in my name it would technically be fraud then as it's meant to be financed in the name of the person who will be the owner/keeper/main driver of the car. it would asl be fraud on the insurance front too as i'd be insuring it with me as the main driver & mum as the 2nd driver when in fact she is the main driver.
so basically what should happen is that everything goes through in her name & i just transfer money to here account each month to cover the payment of the car.
....
ruins the surprise.
how could I change the registered keeper status at a later date? if it's financed under my name surely i'd have to keep on the records that i was the registered keeper/legal owner.
what's the difference between reg keeper & legal owner? i read online but it didnt really help clarify
This is a lovely thing that you want to do for your mum but what happens if in the future you can't afford the repayments? She's left without a car as you decided to trade the one she owned for one on PCP?
I don't think you have understood how PCP works - it is little more than a lease. You only become the owner when you pay the final balloon payment at the end of the term.

The leasing company will be the owner and registered keeper since all you are doing is renting the car - or have I misunderstood what you are trying to do ?
Also worth considering is does your mum actually want this. I know you say it's a surprise but personally I would be very hacked off if one of my children tried to sell my old car and give me a different one , even if it was newer.
Reasons being that it took me months to track down the car I currently have , it's nothing special, but just happens to be the make and model I really like driving. I choose to have an older car , not because of cost, but because I don't want to worry about every tiny scratch it may get. Also to get rid of a car I own outright and replace if with a lease car/one with outstanding finance would be the last straw.
But that's just me, hopefully you know this would definitely make your mum happy .
Also as you are just about to start a new job, ( other thread ) I assume you will be on probation for 3 months , so may be prudent to wait until after then ?

Edited by: "tinkerbellian" 26th Jul 2016
I pay for our car via finance, the money comes out of our joint account but the car and insurance is in my wife's name, it might be better speaking to your mum then the garage if your mum wants to get the car
Original Poster
the reason I want to surprise her is if i discuss it wiht her she'll just think its too much hassle - she's old fashioned and likes to pay cash. her attitude to a car is as long as it gets her from a to b. it's not that she likes her car just now and doesnt want a new one its that it still goes. but it's costing 350 + on mots every years this year she was over 500 and she complains about that. she's worked her all her life in a low paying job and always had to settle for second best. if i discuss it wiht her she'll jsut shrug it off & say she's used to it but I know deep down she'd be happy & greatful if she could for once have something nice and not have to worry about payments.
the car will be sub 200 per month incl road tax (i've looked)
even if things did end up going wrong at my new job I still need to work full time & still need to get paid 7.2 per hour so I would still be earning enough to cover the cost of the car even if i was working in mcD or poundland.
Original Poster
tintin7

I don't think you have understood how PCP works - it is little more than … I don't think you have understood how PCP works - it is little more than a lease. You only become the owner when you pay the final balloon payment at the end of the term.The leasing company will be the owner and registered keeper since all you are doing is renting the car - or have I misunderstood what you are trying to do ?


yes iäm aware it would remain the finace companies until paid the balloon payment. but what i was referring to was more the v5 & dvla legal side of things. I'm assuming they wont say "finance company" under registered keeper
[/quote]yes iäm aware it would remain the finace companies until paid the balloon payment. but what i was referring to was more the v5 & dvla legal side of things. I'm assuming they wont say "finance company" under registered keeper[/quote]

You won't see the V5 unless you buy the car at the end. The V5 will be held by the leasing company since they own it and will pay for the road tax.......The owner/registered keeper will be the finance company
I have two separate personal leases from Mazda and Honda (in my name). I pay the finance companies (ALD and Honda). However, the second car is driven by my wife. Both insurance policies were originally in my name however, the wife now pays her own insurance (yesssssssssssss lols). The legal owners of the vehicles are the leasing companies (Mazda and Honda) - not the financing companies. It doesn't matter who drives the car, as long as they are insured (fully comprehensive). In addition, you should consider taking out GAP insurance - this will pay the difference between the book price and any write-off price in the event of an accident.
At the end of my current leases, I will hand the cars back and take out two more leases.. suits me

The wife's car is a Honda Civic 1.6 diesel ... £180 per month and includes road tax. Servicing is on top and covered by a Honda Service Plan.
Edited by: "Splodger101" 26th Jul 2016
tintin7

yes iäm aware it would remain the finace companies until paid the balloon payment. but what i was referring to was more the v5 & dvla legal side of things. I'm assuming they wont say "finance company" under registered keeper[/quote]

You won't see the V5 unless you buy the car at the end. The V5 will be held by the leasing company since they own it and will pay for the road tax.......The owner/registered keeper will be the finance company[/quote]

​no, the lessor will be the registered keeper. there isn't a 'legal owner' document and the v5 only shows who is reponsible for ensuring the car is roadworthy and taxed.
Original Poster
I'm not sure basically the guy at thear shop said if payment to come out my moms bank account then finance needs to be applied for in here name. Otherwise can do through me and transfer to her name. He said I would get docs through from dvla. I read it's fraud to take out finance on a car if ur not the main driver .... It's also fraud to be knsured as the second driver but actually be the main driver.
I looked up insurance quotes and it asks are u the registered keeper/legal owner of the vehicle.... So would she now tick no in that box of its the company?
Your mother is going to go mad at you pack it up. If you want to get her a car save and buy one cash which can easily be given to her as a present without all the hassle. You will not be thanked and she will probably tell you to take it back but you have signed the agreements. Listen to your mother not yourself.
I'm pretty sure you can't get your mum a car on PCP, and have the finance go through her name, and keep it a surprise...

I'd discuss it with her first tbh.
Why not save the cash you was going to use on the pcp deal and just buy her a halfway decent 2nd hand motor?
Also what were you planning on doing about insurance? Could lose a year of no claims by changing the car before the insurance is up.

While it's a lovely gesture I'd be uneasy if someone took out pcp on a car, traded in my old car and cancelled my insurance.
Goes from something I own right to something which could go at any minute and she'd lose a lot of the control she has.
Not to mention some people prefer a non mint condition car so they aren't constantly paranoid about scratches, scrapes or worried about were they are parking it.
Reading through the comments I think a lot of people are also mixing up PCH and PCP, anyhow. When taking out the fiance for PCP the company assumes the person applying will be the registered keeper and main driver. If you say the car is for someone else, regardless if they could afford the payments or not the company will not touch you with a barge pole as the presume you are doing what is known as an "accommodation deal" - taking it out for a family member/friend who cannot get fiance. Whilst the practice is not actually illegal they just will not touch yourself. Don't forget then this will also go as a black mark fiance declined on your credit file.
Without going into the ethical feelings about trading in your mothers car etc that is.
GAP insurance would also be tricky situation as it will bridge the gap between the finance owed and any insurance payout but remember the insurer and the finance holder would be two different people. But without a doubt whatever line you go down Total loss/RTI (Return to invoice) gap is really worth the money.
I once had a car on HP where I paid deposit and my employer paid instalments from his account. it was on my name and insurance and logbook on my name as well but instalments used to go from his account.
after a year when I moved I discussed with him he kept the car and cleared it with time he did transfer logbook and I had a letter from black horse asking why logbook name been changed I simply called and told them he is main user now and they didn't mind.
I got no clue how PCP works or if its worth it. I always prefer my cars fully owned by self. if you can take a loan or use credit card you can get much better offer as delivery miles car or not so old used car. e.g you can get an i20 for around 3500/4000 with still warranty left on it
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