Car finance for 3rd party

krishcanag7

Hello

Is it legal or possible to:

Person A wants to buy a car but has poor credit score so cannot.

Person B agrees to sign the agrrement in person B name and ownership of car (V5 registered to personB) and make the payments (money coming via person A to B account first) to finance company. The driver is only person A

Is this an agreement a company like say VWFS would accept?

regards

krish

Grumpy_chap

krishcanag7 said:

Hello

Is it legal or possible to:

Person A wants to buy a car but has poor credit score so cannot.

Person B agrees to sign the agrrement in person B name and ownership of car (V5 registered to personB) and make the payments (money coming via person A to B account first) to finance company. The driver is only person A

Is this an agreement a company like say VWFS would accept?

regards

krish

What you are proposing is "fronting" and is not permitted.

What may be possible is for A to have the agreement and registration of the car, but with B acting as Guarantor for A

krishcanag7

Grumpy_chap said:

krishcanag7 said:

Hello

Is it legal or possible to:

Person A wants to buy a car but has poor credit score so cannot.

Person B agrees to sign the agrrement in person B name and ownership of car (V5 registered to personB) and make the payments (money coming via person A to B account first) to finance company. The driver is only person A

Is this an agreement a company like say VWFS would accept?

regards

krish

What you are proposing is "fronting" and is not permitted.

What may be possible is for A to have the agreement and registration of the car, but with B acting as Guarantor for A

Interesting, this actually happened at a BMW main dealer, 3 months later person A went back to BMW and asked to change owner to person A, again agreed by B and BMW. 
This lead to a black mark against person B when finance company found out due to some other person involvement.

From what you are saying, BMW should be liable for damages to person B ?

MorningcoffeeIV

krishcanag7 said:

From what you are saying, BMW should be liable for damages to person B ?

No. Person B would be responsible for damages to person B, for any decisions taken by person B.

MrFrugalFever

What you have proposed is against the law technically. It would fall under the ‘fronting/accommodation deal’ section of FCA rules/regulations and could give rise to a criminal charge of obtaining credit by way of deception resulting in a fraud case being launched. Worst case obviously. There’s a very good reason why person A has been rejected a loan so what on earth would make person B think person A will consistently keep up with repayments.

To the poster about BMW….they would have found out by CAP HPI alerting them to a keeper change, which is not possible unless the car has been sold to a debt adjuster and bought in to the motor trade, once the finance has been settled a new keeper can be added. The finance company own the vehicle, regardless of how you fund with them until every last penny is paid.

krishcanag7

MorningcoffeeIV said:

krishcanag7 said:

From what you are saying, BMW should be liable for damages to person B ?

No. Person B would be responsible for damages to person B, for any decisions taken by person B.

So what you are saying person B by trying to help person A is responsible for their own credit rating going down as the finance company when it understood that person A is the driver of the car decided to back mark person B?

krishcanag7

MrFrugalFever said:

What you have proposed is against the law technically. It would fall under the ‘fronting/accommodation deal’ section of FCA rules/regulations and could give rise to a criminal charge of obtaining credit by way of deception resulting in a fraud case being launched. Worst case obviously. There’s a very good reason why person A has been rejected a loan so what on earth would make person B think person A will consistently keep up with repayments.

To the poster about BMW….they would have found out by CAP HPI alerting them to a keeper change, which is not possible unless the car has been sold to a debt adjuster and bought in to the motor trade, once the finance has been settled a new keeper can be added. The finance company own the vehicle, regardless of how you fund with them until every last penny is paid.

Person B had full confidence in person A, and person A always maintained the payments via person B bank account. 

That went on only the whole thing blew up when a 3rd party (related to person A) pretended to be person B to check balance on account 

Grumpy_chap

krishcanag7 said:

From what you are saying, BMW should be liable for damages to person B ?

No.
How would you get to that conclusion?
Person B defrauded BMW / the finance company and somehow you want BMW to be liable.

MrFrugalFever

But an experienced lender has decided (professionally) that Person A is too high a risk and not someone they’d wish to lend to, this means that their confidence is much lower than Person B’s confidence.

the whole situation with Person A ‘agreeing’ to pay Person B is a difficult one if it’s friends/family as that in itself can cause a whole different issue.

I work very closely with a prime-mainstream lender for Automotive finance, ranging from £3k borrowing to £60k borrowing and in the occasions whereby customers have been declined by the mainstream lender but accepted elsewhere (albeit at a much higher APR due to rate for risk) often fall out of sync with payments and start missing or end up in financial difficulty. The decline is very much often for an extremely good reason made by very experienced underwriters.

In short, do not be tempted to have Person B obtain credit on behalf of Person A, the ramifications are pretty severe.

krishcanag7

From the comments so far...it seems to me BMW are clearly broken the code themselves to approve this deal when both person A and person B discussed it with the salesman....who has left BMW

MrFrugalFever

krishcanag7 said:

From the comments so far...it seems to me BMW are clearly broken the code themselves to approve this deal when both person A and person B discussed it with the salesman....who has left BMW

Firstly, Person B would have a very hard time proving that the Sales Person at BMW knew Person B was financing the car exclusively for Person A due to poor credit HISTORY. 

Secondly, if Person B’s information was either a) the ONLY information presented to Alphera or Person B was unrelated/completely different name and address to Person A, then Alphera would only carry out their necessary checks on Person B and have no idea about Person A even existing.

Person A has come in to the picture by asking for the V5c to be moved in to their name, which is a change of keeper (for a car that neither Person B or A own) and this in turn means that the DVLA send data to several companies (including but not limited to Experian & HPI) which in turn will alert Alphera. As it is Alphera’s property, they’ll (quite rightly) want to know what on earth is going on!

Person B will be in the firing line as they had signed the legally binding contract.