Car finance on behalf of another person?

chubsta

Not as bad as the title may suggest!

My partner of many many years has decided that she is finally going to learn to drive :T

As I am responsible for all bills etc, and as a nice gesture, i am going to pay for the driving lessons, and then buy her a car at the end of it all - aren't i nice!

Thing is, you get much better deals by going for a dealer finance offer than by getting a loan. However, for insurance purposes i believe it will be much better if once she has passed her test that she will be driving a car that she owns rather than me owning the car and having her as a 'named' driver - i already have my daily car and a sports car and don't really want another one in my name as it starts to get silly...

We can't really get the finance in her name either as 1. she has no income beyond interest on savings. 2. she panics if half-way through the month she has £50 on her credit card and i can't imagine her ever getting a loan out (good way to be i reckon!) 3. it is a birthday present

I presume a dealer would not want to give the finance on a car in one persons name, and have it registered to a different person? That would be the ideal scenario, of course i could just get a loan out but then the interest rate would be around 6% instead of 1.5%. Or i could just stick it on a credit card and pay it off that way, which would force me to pay it off quicker but at a high rate for a few months...

Decisions, decisions...

Any advice much appreciated - don't worry about saying 'if we split up then i still have to pay for the car' - i know all that, we are unlikely to split up and even if we did i would be able to 'write it off to experience'!

silo24

If you go for dealer finance, you have no chance. The car will be registered in your name if you are the finance signatory.

If you go with a personal loan on the other hand, it is easy.

Don't necessarily assume that ALL dealer finance is better than personal loans. This is probably true on manufacturer supported finance deals, but not in most other cases.

camuk81

Cubsta, Just as an after thought if you purchase on a loan, you will be the main party who the car is registered with. This could cause a problem if your OH is the main driver on the car as the car is not registered in her name.

This is just an afterthought for the insurance

chanz4

1.5% apr that will be a first

silo24

chanz4 wrote: »

1.5% apr that will be a first

Not necessarily. Seen this before on Manufacturers 0% deals. They still have a couple of fees attached (documentation fee and such) which can bump it up from 0 to a couple of percent.

Main thing is if you go with HP, the car will be in the name of the person who takes out the HP and therefore generally must be insured in said name. With a Personal loan, there is no attachment to the vehicle so it can be registered in another's name.

chubsta

cheers for the replays - pretty much as i thought then, no chance with a dealer finance offer, which is a shame as the deals are pretty good.

Have to work out how quick i would be able to pay it off if i used a credit card i think, as that would offer a lot more flexibility than a loan in that a large outstanding balance would make me pay everything off as soon as possible rather than drag it out over a few years - 15% credit card for six months against i guess 6-7% loan for 3 years... But if i got a loan then i presume i would be able to just pay it off early but with an early settlement fee - pretty complicated really...:o
It also depends on how soon she passes her test as that may take a year anyway so should be able to save up a big proportion of the cost in advance

Tiggy_Wiggy

My hubby and I bought two cars a couple of years ago. At the time I was working on an interim basis. Finance for both cars was therefore put in his name, but as one of the cars was for me, the log book was put in my name.

Can't see it being an issue really, unless of course the rules have changed since 2010.

rdwarr

Tiggy_Wiggy wrote: »

My hubby and I bought two cars a couple of years ago. At the time I was working on an interim basis. Finance for both cars was therefore put in his name, but as one of the cars was for me, the log book was put in my name.

Can't see it being an issue really, unless of course the rules have changed since 2010.

It can make a big difference to insurance. If the owner is not the same as the registered keeper then the premiums will be higher (I get this as I have a lease car). And if you don't tell the insurance company (some of them don't ask but it's in the small print) you may find that you're not insured at all.
I actually got a fully comp quote for £120(!) but couldn't take it up because I was the registered keeper but not the owner. Ended up paying over £200.

Tiggy_Wiggy

We only had the finance for 2 years. So paid off now. As far as my hubby and I are concerned I'm the owner of my car and he is the owner of his. Even though the finance was in his name the monthly payments were paid from our joint account.

blacksta

I am not sure this is really an issue?

rtho782

The registered keeper does not have to be the legal owner.

While the car has outstanding HP you cannot legally transfer ownership, but if you don't tell them you have changed the keeper (not the same thing) they won't know.

If I were you I'd take out the finance and have the garage put it in your name, then change the keeper to her afterwards.