Car ownership on PCP/Hire Purchase

ripplyuk

My insurance is due for renewal and I've been getting quotes but I'm having difficulty defining who owns the car. All the comparison sites ask who the owner is and I've said my mum is but I'm a bit fussy about detail with insurance so I've rang up to clarify that the car is under a PCP in my mum's name, so technically, the car belongs to Volkswagen until we pay it off. I am the registered keeper.

This seems to really confuse every insurer I've spoken to, yet I thought finance was common with cars! Direct line wouldn't quote at all, since the finance company 'owns' the car, not me or my mum. I then got a good quote from the AA but I've spoke to them 3 times and got conflicting answers. First time, they told me that whoever is on the V5C is the legal owner which I pointed out to them was incorrect. Then they said that, in their own definition, my mum is the owner as the finance is in her name.

Today, I rang up to buy the AA policy and got a different person. I explained the whole thing again and they told me that it should be classed as a lease car, and asked me who the lease company is! It's definitely not a lease. I've checked all my finance paperwork and it actually says it is a hire purchase agreement. I assume that a PCP is just a form of hire purchase.

Any help would be appreciated. My insurance runs out on Friday.

Cornucopia

As you say, loads of people have cars on finance, so it's disappointing that these insurers aren't handling it well.

FWIW, I've just changed my car with Direct Line, and they didn't even ask about ownership or finance.

ripplyuk

I had my previous car insured with Direct Line, under finance, with no problems. I didn't mention it and just put myself as the owner. I assumed I was, since the finance was in my name. When I spoke to them this time, they said they won't cover anyone who isn't the legal owner and they don't class my mum or I as the owner whilst it's under finance. They suggested I call back when the finance is paid off!

The AA give me a better quote anyway. Though they seem totally confused by the whole issue.

I get the feeling insurers would prefer I didn't question this and just put my mum or myself as the owner.

InsideInsurance

ripplyuk wrote: »

I get the feeling insurers would prefer I didn't question this and just put my mum or myself as the owner.

No, insurers dont want you to commit fraud

Most companies dont have an issue on long term deals but web systems seem to reject more quotes.

I'm not sure what the complexity is though to cause confusion? The owner is the finance company, you are the registered keeper. What may or may not happen in the future is fairly irrelevant

ripplyuk

When I tell them the finance company own it, they ask if they should list it as a lease car. But when I tell them the finance agreement says 'Hire Purchase', they say it's not a lease, and that the owner is whoever has the finance, which is my mum.

They seem to see lease cars as company cars or short term ie, about one or two years. When I explain that mine is a 4 year deal with a final payment at the end, they say it's not a lease.

It's ended up now that they have no 'category' for me at all unless I agree to put my mum as the owner, or myself. I've also emailed and none of the companies will answer this question in writing.

It seems crazy! On my finance agreement, it says that the finance company own it until it is paid off, but the insurers say they don't!

superbigal36

Hold on just a minute.
What about the other question on your form.
Are you a homeowner ?
Yes well
no as it is a mortgage.
Therefore the bank owns your home.
I look forward to answers on a postcard.

ripplyuk

I thought having a mortgage still made you the legal owner, but the bank has a claim if you default on payments (But only then). After all, the title deeds will be in the home owners name. It's more like a secured loan.

It seems different to car finance where they clearly state that the finance company owns it until it is paid off.

I'm sure many people have no difficulty ticking the box to say that they own the car whilst it's under finance. I am just worried that if I do that, the insurer will search for any excuse not to pay in the event of a claim and say I misrepresented it. It's particularly worrying now since I've seen how many insurers have no idea how to categorise this, to the point where they would rather decline to quote.

rs65

ripplyuk wrote: »

I'm sure many people have no difficulty ticking the box to say that they own the car whilst it's under finance. I am just worried that if I do that, the insurer will search for any excuse not to pay in the event of a claim and say I misrepresented it. It's particularly worrying now since I've seen how many insurers have no idea how to categorise this, to the point where they would rather decline to quote.

I looked at one comparison site and it has options such as you, spouse, parent, company etc. No option for finance company.

I believe the question about ownership is more to do with insurable interest and settling claims.

A finance company is only involved when a total loss happens and they are simply paid first.

ripplyuk

Yes, it seems the insurance companies do not have any option to say the finance company owns it. Unless it's a company lease.

I spoke to the AA again and they said they cannot put it on the policy that the finance company owns it. They are only interested in who is on the V5 and who is responsible according to the DVLA. With the finance in my mum's name, they have listed her as the owner and me as the registered keeper.

It's been the same with all the other insurance companies I've spoken to. They simply do not recognise a finance company as an owner. I've explained that our finance agreement states I must tell them that the finance company owns it, but they all tell me to choose between me or my mum, or they will not provide cover.

Apart from Direct Line, who said their policy is to not cover any car with outstanding finance at all :rotfl:
I'm pretty sure they are mistaken as I have relatives with cars insured by them, all under finance. They'd also be missing out on an awful lot of customers.

rs65

ripplyuk wrote: »

Apart from Direct Line, who said their policy is to not cover any car with outstanding finance at all :rotfl:
I'm pretty sure they are mistaken as I have relatives with cars insured by them, all under finance. They'd also be missing out on an awful lot of customers.

Their FAQs say

Is it possible to get car insurance on a car that is not owned by my partner or me?

If it is a company car or one that is on long term lease, for example, and you or your spouse/partner are the registered keeper, we may be able to insure it. Please contact our Customer Hotline on

ripplyuk

I think the customer service rep I spoke to hadn't a clue, but he was adamant about it so I just gave up. A lease is different to other types of finance like hire purchase or personal contract purchase.

rs65 wrote: »

Is it possible to get car insurance on a car that is not owned by my partner or me?

Technically, that's everyone on HP/PCP, which they won't class as a lease, so it doesn't apply.