Purchasing a car that you have had on PCH

yazzoo6

Good morning,
I am looking for some advice on purchasing the car we have leased with Lex on a PCH basis. Lex have confirmed that due to tax implications the lessee is not allowed to sell the vehicle to the lessee directly however will provide a quote and sale to a friend or relative not a spouse and register it as such. With this in mind, does anyone know if there would be anything to stop the friend then selling and registering the vehicle back to the lessee. Essentially a third party sale? Some advice would be appreciated. Thank you  

neilmcl

yazzoo6 said:

Good morning,
I am looking for some advice on purchasing the car we have leased with Lex on a PCH basis. Lex have confirmed that due to tax implications the lessee is not allowed to sell the vehicle to the lessee directly however will provide a quote and sale to a friend or relative not a spouse and register it as such. With this in mind, does anyone know if there would be anything to stop the friend then selling and registering the vehicle back to the lessee. Essentially a third party sale? Some advice would be appreciated. Thank you  

Once the car is sold to the third party, then it becomes their property and as such they can do with as they see fit. So no, there's nothing stopping the third party selling it back on to you.

Sandtree

neilmcl said:
So no, there's nothing stopping the third party selling it back on to you.

Absolutely agree with the above, it doesnt create a VAT issue for the finance company, however remember that will be another registered keeper on the V5 which could impact its value slightly depending on how long you intend to keep it.

Clearly you must also trust your friend/relative and be able to pay cash plus the additional expenses potentially around taxing the car and insurance (unless they SORN it)

BOWFER

I'm not convinced anyone really cares about the number of owners, within reason.
Obviously if a car has multiple owners in a short space of time it screams "Lemon".
But the OP being the third owner in quick succession after the second owner is easily explained in this scenario and shouldn't bother anyone.

yazzoo6

Thank you all, I genuinely appreciate your feedback. I was a bit worried about there being a legality that might create an issue and I really didn't want to do anything that would affect the person I have asked to act as the purchaser on our behalf. I guess the only other thing to consider is the time between the V5 being registered to the third party and then transferring it over to me as well as the third party probably needing some short term insurance as the owner (even though they wont be driving it!). Thank you again so much

BOWFER

yazzoo6 said:

Thank you all, I genuinely appreciate your feedback. I was a bit worried about there being a legality that might create an issue and I really didn't want to do anything that would affect the person I have asked to act as the purchaser on our behalf. I guess the only other thing to consider is the time between the V5 being registered to the third party and then transferring it over to me as well as the third party probably needing some short term insurance as the owner (even though they wont be driving it!). Thank you again so much

Your current insurance would cover you to drive the car, wouldn't it?
You'll be insured to drive any other car, albeit third party only?
I am.

Sandtree

BOWFER said:
Your current insurance would cover you to drive the car, wouldn't it?

You'll be insured to drive any other car, albeit third party only?
I am.

The current insurance could be changed so that the friend is shown as the legal owner and registered keeper however some insurers won't cover such arrangements if the owner/keeper isnt a close relative to the policyholder.

If the OP didnt change their insurance then their policy would be void for non-disclosure of the change in circumstances and so no Driving Other Cars cover.

Finally... DOC is still a common feature but is significantly less common than it used to be. Plus the Road Safety Act (2006) introduced continuous insurance requirements which cannot be met via the DOC extension.

Herzlos

BOWFER said:

yazzoo6 said:

Thank you all, I genuinely appreciate your feedback. I was a bit worried about there being a legality that might create an issue and I really didn't want to do anything that would affect the person I have asked to act as the purchaser on our behalf. I guess the only other thing to consider is the time between the V5 being registered to the third party and then transferring it over to me as well as the third party probably needing some short term insurance as the owner (even though they wont be driving it!). Thank you again so much

Your current insurance would cover you to drive the car, wouldn't it?
You'll be insured to drive any other car, albeit third party only?
I am.

3rd party cover (where offered) doesn't usually cover a car that you own, but I think they'd take a dim view of covering a car 3rd party when you're only not the paper owner for a week and it never left your possession, especially if the insurance policy was for the same car under your ownership.
It'd probably be easier to phone the insurance company and explain what's happening to them and let them cover it.

neilmcl

BOWFER said:

yazzoo6 said:

Thank you all, I genuinely appreciate your feedback. I was a bit worried about there being a legality that might create an issue and I really didn't want to do anything that would affect the person I have asked to act as the purchaser on our behalf. I guess the only other thing to consider is the time between the V5 being registered to the third party and then transferring it over to me as well as the third party probably needing some short term insurance as the owner (even though they wont be driving it!). Thank you again so much

Your current insurance would cover you to drive the car, wouldn't it?
You'll be insured to drive any other car, albeit third party only?
I am.

Usually only if that car has some form of main insurance attached.

DrEskimo

As I understand, the legal owner and the registered keeper are two different things.

Could your friend/family buy the car, but you become the registered keeper? Then simply purchase from your friend the next day.

You could even transfer the money to them and in effect they are just buying the car for you, and you remain the next registered keeper and the named driver on the insurance policy. Not unlike a parent buying a car for their son/daughter?

That would negate the need for multiple names on the V5.

neilmcl

DrEskimo said:

As I understand, the legal owner and the registered keeper are two different things.

Could your friend/family buy the car, but you become the registered keeper? Then simply purchase from your friend the next day.

You could even transfer the money to them and in effect they are just buying the car for you, and you remain the next registered keeper and the named driver on the insurance policy. Not unlike a parent buying a car for their son/daughter?

That would negate the need for multiple names on the V5.

The car's on PCH and therefore the registered keeper is currently the lease hire company, when they sell it to the OP's third party they will have to put them down as the next keeper. Whichever way they do this the OP will still end up as the the third keeper, not that it makes much difference.