Can you lease a car on someone else's behalf?

nadmai

Hello, I could do with some help please,

My girlfriend has a poor credit history and unfortunately her old banger broke down for the nth time recently (its been a money pit for the last year). She wanted to lease a car to avoid the cycle of garage and mechanic visits. So the dealer said that if I was to lease the car I could just let my girlfriend drive it. I'm not going to drive this car at all, I won't be insured on it either, she'll be the main insurer - is this legal? Will an insurance company accept that?

Many thanks for any advice you can give

computerbar

I believe you mean finance lease not rental lease.

You finance the car [it will be on your name most likely], insure it on your name,(as most insurance companies ask if you own the car) and add your gf as as additional driver (as your spouse if your living toghather). UNLESS there is an explicit condition in agreement by lesser not to do so.


You are responsible for the lease payment and will come out of your account. any late payment etc, you will be the one they are after.

vikingaero

Plenty of people lease cars for their other halves to use. And plenty of people own and insure cars where they own the car but the other half is recorded as being the main driver. It may pay to insure yourself on the car as most insurers rate married/co-habitees as a lower risk even if you do not drive the car.

If you are paying I would lease the car in your name and insure it under your name in case you break up with the girlfriend. If she has poor credit history it will be better for her not to have any assets.

nadmai

Okay, many thanks for the advice. Its not the ideal situation, ideally she would be able to rebuild her credit rating via making these monthly payments, but unfortunately life is seldom ideal.

standupguy

nadmai wrote: »

Hello, I could do with some help please,

My girlfriend has a poor credit history and unfortunately her old banger broke down for the nth time recently (its been a money pit for the last year). She wanted to lease a car to avoid the cycle of garage and mechanic visits. So the dealer said that if I was to lease the car I could just let my girlfriend drive it. I'm not going to drive this car at all, I won't be insured on it either, she'll be the main insurer - is this legal? Will an insurance company accept that?

Many thanks for any advice you can give

Is this legal?

Well no, not really - unless the leasing/Finance company are aware of the full arrangement with your girlfriend

You could try and put it in joint names and that would be ok.

But, if it is the case that, having discussed this with the dealer and the dealer is aware your girlfriend could not get credit and then suggests this type of arrangement to you, then he is colluding to mislead the lender.

The lender makes their decision based on the fact that you are the customer, you will insure the car and you will keep the car in your possession.
If this is not the case and they are unaware of any other arrangement then this is really fraudulent - it is what is known in the Finance Industry as an "accomodation deal"

If found out, the Finance company would have the right to issue a cifas warning against your name which could hamper you getting credit in the future.

So, if the lender is aware of your plans in full and agrees to proceed then all well and good - but if you mislead you are taking a big chance.

They usually find out what happened when a payment is missed or you split up and stop paying - where one person has the car and the other the agreement

vikingaero

standupguy wrote: »

Is this legal?

Well no, not really - unless the leasing/Finance company are aware of the full arrangement with your girlfriend

You could try and put it in joint names and that would be ok.

But, if it is the case that, having discussed this with the dealer and the dealer is aware your girlfriend could not get credit and then suggests this type of arrangement to you, then he is colluding to mislead the lender.

The lender makes their decision based on the fact that you are the customer, you will insure the car and you will keep the car in your possession.
If this is not the case and they are unaware of any other arrangement then this is really fraudulent - it is what is known in the Finance Industry as an "accomodation deal"

If found out, the Finance company would have the right to issue a cifas warning against your name which could hamper you getting credit in the future.

So, if the lender is aware of your plans in full and agrees to proceed then all well and good - but if you mislead you are taking a big chance.

They usually find out what happened when a payment is missed or you split up and stop paying - where one person has the car and the other the agreement

I don't see why this is not legal. There are thousands of husbands or partners who lease a car for their spouse to use and they have no intention of driving the car because they own a company car or are a commuting rat and use the train everyday. Most spouses may not be able to lease or get HP because technically they have no income so husbands all over the UK are leasing for their other halves.

standupguy

vikingaero wrote: »

I don't see why this is not legal. There are thousands of husbands or partners who lease a car for their spouse to use and they have no intention of driving the car because they own a company car or are a commuting rat and use the train everyday. Most spouses may not be able to lease or get HP because technically they have no income so husbands all over the UK are leasing for their other halves.

You are talking here about husbands and wives living at the same address and usually having joint financial connections. In the majority of cases both will be credit worthy even if no income.

This is different in that it is a boyfriend/girlfriend relationship where one partner cannot obtain credit due to a detrimental credit record.

nadmai

Hi,

Okay this is interesting and slightly worrying. The situation is that my girlfriend and I live together, if I insure the car and add her to my insurance is this misleading the lender? I could if I wanted to drive the car.

Thanks for the advice, its very useful

standupguy

Ok, it helps that you are at the same address.

If you and your girlfriend have a joint loan of any kind such as mortgage, credit card, personal loan etc then you will be Financially jointly linked and both yours and your girlfriends credit information will come up when you are searched at the credit reference agencies.

This allows them to see the good information from yourself and the detrimental information of your girlfriend. So, if you have been accepted and they have seen your partners credit record you will be ok.

Also, if you apply jointly then obviously no issues.

But if you apply in your name only and you are not financially linked on the credit search then the Lender has no idea of your partners interests in this matter and it could be argued that you fronted a credit agreement for a person who was uncreditworthy and would not have been able to obtain credit.

In practical terms unless you default the lender is unlikely to find out.

If you want to be sure - be upfront and apply in joint names

nadmai

These answers are really appreciated standupguy.

This does seem somewhat related to intent here, if I lease a car, insure it in my name and add her to the insurance and let her drive it then that is not a problem. But if my intent is to get her a car then it is illegal even though I would be doing all the same things above?

I do think applying jointly would be the honourable thing to do, but my girlfriend would not pass a credit check and even if it was done jointly I doubt that she would and then wouldn't her bad credit rating be tagged to mine?

standupguy

Basically yes - but remember your original post which said "I'm not going to drive this car at all, I won't be insured on it either"

However, you should not think of it in terms of "illegal" as it is not a criminal matter - after all you do have intent to pay.

Look at it as a potential breach of contract which is a civil matter and then only if it is found out?

If a lender believes they have been mislead on purpose they do have a right to report it to credit reference agencies under the cifas scheme.

You are right about the linking.

The dealer has suggested this route as he knows he has more chance of a sale - in your name only.