Who is the owner of a car that has been purchased using car finance?

By: Paul Goodwin     Approved by the Car Finance Advisory Board

Who legally owns a car?

Determining ownership of a car depends on a few different factors. It should be noted that the legal owner is not necessarily the same as the registered keeper on the V5. The registered keeper on the V5 simply relates to the person who's keeping and using the vehicle.

Cases where the legal owner is different to the registered keeper include company cars, where the company owns the car, but the employee is named as the registered keeper, and some cars which are purchased on finance. When a car is bought on a finance agreement - such as Hire Purchase or Lease Purchase - it legally belongs to the finance company until the contract is settled. With new products such as Personal Contract Purchase, the customer has a choice over whether or not to buy the car by paying a balloon payment at the end of an agreement.

I had a joint car finance agreement, but have now split up with my partner - who owns the car?

In joint applications both parties own the car, and both will be expected to maintain payments on the car. In these situations it's generally advisable to settle the finance early, sell the car and split any equity left in the car. To find out more about joint applications visit our dedicated help page.

I’m paying the finance on a car, but someone else is the registered keeper on the V5 document. Who owns the car?

In this case the legal owner of the car is the finance company until the car finance agreement is settled. Legally, the person paying the finance must be the registered keeper of the car, otherwise they are committing a crime called Fronting. To find out more about your rights when you have a car on finance, visit our dedicated help page for car finance customers.

Who owns the car if the car finance customer passes away?

When a person passes away, any outstanding debts that they have are deducted from their estate. If there isn't enough funds left in the deceased’s estate to pay off their debts, any assets they have may have to be sold in order to pay the remaining debt. If the deceased had Payment Protection Insurance (often included in a life insurance policy) you may be able make a claim to cover these costs. This includes any car finance agreements that they may have had existing in their name. As these are secured loans, they'll be considered high priority debts.

If the agreement was taken out as a joint application, responsibility for the payments are automatically transferred to the partner who is still alive, rather than being counted amongst the debts of the deceased.

Who owns a car in a leasing agreement?

In a standard leasing agreement (such as Contract Hire) the owner of the car is always the leasing company. To find out more about car leasing visit our dedicated help section.

If you can’t find the answer to your question here, please use our LiveChat search function located on the right hand side of this page.

The car I bought is still on finance, what do I do?

If you buy a car that has an outstanding finance agreement on it, you may not actually own it. A car still on finance may still belong to the finance company until a certain proportion of payments have been made.

If you're buying from a dealer, ask whether a vehicle check has already been carried out (this can also be known as a HPI check). All reputable dealers should have carried out this check on all vehicles that they stock to ensure they're not still on finance. If the car was purchased privately, the emphasis is on the buyer to make the relevant checks about the vehicle.

If you've been sold a car that's still on finance you should seek legal advice. A good place to start would be with the Citizens Advice Bureau, as they'll be able to provide further details as to what steps you should take (although this will be dependant on your individual situation).

Published: 16/05/2016
Last Updated:18/03/2017
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