Gifting a Car with Finance

losingpoundsandgaininglbs

Hi all,

I've tried googling this but struggling to find anything relevant, as it just comes up with fronting explanation, but dont believe this comes under that, but just looking for some advice.

I bought a car in 2021 on Finance, and that agreement runs for approximately another two year, however I dont use the car anymore as me and my girlfriend have got a new car. I was initially going to sell the car to one of the online car auction sites, as my finance is pretty much what it's worth so would have little or nothing to pay.

However, my sisters car has now broke down and looks unfixable. I am thinking on gifting her the car (single mother, cant really afford much), but I also cant afford at this moment to clear the finance so I would just continue to pay the monthly amount until it clears. Is this possible? And if so, can I still change the ownership?

Thanks in advance for any responses.

DullGreyGuy

What type of finance did you take? A personal loan? HP? PCP? 

Normally if the finance is secured on the vehicle then the finance company is the owner of the vehicle until the finance is paid off. You may be the registered keeper but thats a different matter.

If it was a personal loan and so not secured on the vehicle you can do whatever you want with it. If it's HP/PCP and assuming you are proposing that you continue to pay the finance yourself then you'd need to speak to the finance company and they may be ok with her becoming the keeper. If she is to pay for it going forward they are unlikely to accept it but you maybe able to do something with her taking out finance to pay off your finance on it.

losingpoundsandgaininglbs

Thanks for the response, it's on a HP finance agreement and im planning on continuing the payments myself until the finance is cleared. I'll speak to the finance company to see what their thoughts are.

If they are happy with that Im guessing I can just move her to be the registered keeper of the vehicle even if im paying the finance? And I can cancel my insurance and she can get new insurance against that car even though the finance is in my name still?

Car_54

losingpoundsandgaininglbs said:

If they are happy with that Im guessing I can just move her to be the registered keeper of the vehicle even if im paying the finance? And I can cancel my insurance and she can get new insurance against that car even though the finance is in my name still?

She needs new insurance, as she will now be the main driver.

Insurer will ask who owns the car, but normally they're ok with close relatives.

Herzlos

That'd depend on the finance company, they may insist on you remaining the owner and just letting her use the car.

They'd probably at least want some financial link to the car if the finance is secured on it, so that if you fail to pay they can recover it.

So you may be better finding alternative finance to pay it off.

Have you checked if it's worth more than the settlement figure? If you bought it before prices went bonkers then it's entirely possible you've got equity. If so then you could potentially sell it and get some money back which you could put towards buying an older car for your sister.

DullGreyGuy

Car_54 said:

losingpoundsandgaininglbs said:

If they are happy with that Im guessing I can just move her to be the registered keeper of the vehicle even if im paying the finance? And I can cancel my insurance and she can get new insurance against that car even though the finance is in my name still?

She needs new insurance, as she will now be the main driver.

Insurer will ask who owns the car, but normally they're ok with close relatives.

Its on Hire Purchase, the OP is still in the Hire phase as they are still paying, the owner is likely the finance company and will remain the finance company until its paid off. Most insurers are fine with insuring cars on finance. 

losingpoundsandgaininglbs said:

If they are happy with that Im guessing I can just move her to be the registered keeper of the vehicle even if im paying the finance? And I can cancel my insurance and she can get new insurance against that car even though the finance is in my name still?

You need to have the conversation with them... they may want you to remain the registered keeper and insured but you can have her as the primary driver (both with the insurance and the finance) which would mean your claims record is at risk whilst she has the car. 

Insurers are unlikely to have problems if she is the registered keeper and the finance the owner. They may have more issues if she tries to insure it with you as the registered keeper and the finance company as the owner. Similar if you insure it and she's added as the primary driver you'll have to remember to declare it will be kept at her address not yours which will normally increase the premiums a little though may be offset by the different postcode depending on which is the lower risk neighbourhood