Who is the legal owner of a car on finance?

When you finance a car in the UK, the car finance company or lender is the legal owner of the vehicle, not you. You borrow money from the lender to buy the car, and the lender holds ownership until you repay the loan in full. While you make monthly payments, you must take care of the car and insure it. You can use and drive the car, but you won't own it outright until the loan is completely and fully paid- off. This can happen either at the end of the agreed term or through early settlement if you choose to pay off the remaining balance before the end of the term. Once you settle the loan, the car's ownership transfers to you.

If I buy a car on finance, can someone else be the registered keeper?

Yes, you can have someone else as the registered keeper of a financed car in the UK. For example, if a parent finances a car for their child, the child can be the registered keeper, while the parent remains the legal owner because they took out the finance.

You must inform the car finance company about who will be the registered keeper, as this can impact your car finance application. Tell the lender before you sign the contract to avoid any issues. Failing to do so might risk the financial agreement or cause the lender to refuse the finance deal.

If you have trouble finding a lender who will finance the car with someone else as the registered keeper, you can apply jointly. Both names will appear on the agreement, and either person can be the registered keeper.

What is the difference between owning a car and being the registered keeper?

When you buy a car outright, you immediately become the legal owner and the car belongs to you. You receive all the car’s legal documentation and have full ownership.

If you finance a car, the situation changes. You become the registered keeper, as listed on the V5 registration document, but the finance company remains the legal owner until you repay the loan in full. As the registered keeper, the finance agreements say you are responsible for daily tasks such as paying fines, maintaining the car’s MOT, road tax, servicing, and insurance.

You cannot sell the car because only the legal owner, which is the finance company, has the right to do so. If you finance a car for someone else, like a child, that person should be the registered keeper if they drive the car regularly.

The legal owner must notify the DVLA of any changes to the registered keeper. If they don’t, they could be held liable for any issues related to the vehicle.

Who is the legal owner on a hire purchase (hp)?

In a Hire Purchase (HP) agreement, the finance provider is the legal owner of the car until you complete all payments. You can spread the cost of the vehicle over the term of the contract. While you make payments, the finance company retains legal ownership. Once you complete all payments, including a possible small "option to purchase" fee at the end of the contract, ownership transfers to you, and you become the full owner of the car.

Who is the legal owner on a personal contract purchase (pcp)?

With a Personal Contract Purchase (PCP) payment plan, the finance company is the legal owner of the car until you make the final payment. Personal Contract Purchase (PCP) allows you three options when the contract ends:

1. Return the car.
2. Pay a final lump sum (often called a "balloon payment") to own the car.
3. Part-exchange for a new model and start a new finance agreement.
4. Refinance with a new loan for a different vehicle.

Until you make the final payment, you are essentially leasing the car. The finance company holds legal ownership throughout the agreement.

Who is the legal owner with a personal loan?

With a personal loan, you borrow money to buy the car outright. As soon as you make the payment, you become both the legal and registered owner of the new car. You will receive all the legal documentation for the car and have full ownership from that moment on.

Can the registered keeper of a car on finance be changed?

You usually cannot change the registered keeper of a car on finance until your finance agreement ends. The finance company sets up the agreement based on the personal details that you provided when applying.

To change the registered keeper, you typically need to end your current finance agreement early or terminate it voluntarily. This often involves taking out a new finance agreement in the name of the new registered keeper.

If you're having trouble making payments, it's best to contact your lender as soon as possible. They might offer a few options or solutions to help you manage the loan.

Who is the legal owner of a car on finance for insurance?

Even if you are not the legal owner of a car on finance, you must insure it yourself. The finance company does not provide insurance, so you are responsible for arranging it.

If you drive without insurance and have an accident, you could end up paying for repairs out of your own pocket, which is risky and costly.

Fortunately, many insurance companies accept applications from people who are not the car’s legal owners. You may need to show that you are the registered keeper, but you should be able to get coverage without issues.