If you’ve recently taken a car on finance, it’s important to understand the difference between legal ownership and the role of the registered keeper. Many drivers assume that because they are making monthly payments, they automatically own the vehicle, but this is not always the case. Finance agreements such as Personal Contract Purchase (PCP) and Hire Purchase (HP) operate differently: with PCP, the finance company retains ownership until the final balloon payment is made, whereas with HP, ownership transfers automatically after the last instalment.

Understanding who is the registered keeper of your vehicle is crucial for responsibilities such as MOT, insurance, road tax, and handling fines. It also affects decisions around early settlement, voluntary termination, or part-exchanging your car. This guide explains the distinctions between PCP and HP, outlines your legal and financial responsibilities, and provides practical advice for real-world situations. By following these guidelines, you can manage your car finance responsibly and make informed decisions that protect your finances and legal standing.

Understanding the Difference: Registered Keeper vs Owner

Before diving into finance plans, it’s crucial to clarify two distinct roles:

• Owner: The legal owner of the vehicle, usually the finance company until the car is fully paid off. They hold the title and ultimate legal rights.

• Registered Keeper: The individual listed on the V5C (logbook) responsible for daily upkeep, DVLA correspondence, insurance, road tax, and MOT.

Understanding this distinction answers the primary question: the registered keeper of a car on finance is usually the person named on the V5C, even if they don’t legally own the vehicle yet.

PCP vs Hire Purchase: A Quick Comparison

When buying a car on finance, your plan type influences ownership and responsibilities. Here’s a concise breakdown:

Key Takeaways:

• With PCP, the finance company owns the car until you pay the optional final sum.

• With HP, you effectively build equity in the car, becoming the legal owner once the balance is cleared.

• The registered keeper usually remains the person who drives or looks after the car daily, regardless of plan type.

Who is the Registered Keeper of a Car on Finance?

The registered keeper is primarily the person listed on the V5C (logbook). This role exists independently of who legally owns the vehicle. For finance cars, the person paying the instalments often becomes the registered keeper. However, there are exceptions:

• Parents buying a car for a child: The child should be the registered keeper if they drive it most.

• Shared vehicles: The person primarily using the car should be the registered keeper.

Responsibilities of the Registered Keeper:

• DVLA Correspondence: Receives notices for tax, MOT, or fines.

• Vehicle Tax: Ensures road tax is valid at all times.

• MOT & Servicing: Keeps the vehicle roadworthy and compliant.

• Insurance: Maintains suitable coverage for all drivers.

• Fines & Penalties: Responsible for parking tickets, speeding fines, and other enforcement notices.

Common Real-World Scenarios

1. Parent financing a car for a child:

• Child should be registered keeper.

• Parent remains the legal owner until finance is cleared.

• Ensure insurance reflects actual drivers.

2. Shared vehicles:

• The primary driver should be registered keeper.

• Legal owner may remain the finance company or co-owner.

3. Company cars:

• Company remains the legal owner.

• Employee driving the car daily is usually registered keeper.

Voluntary Termination (VT) Explained

Voluntary termination allows a PCP or HP agreement to end early under specific conditions:

• 50% Rule: You must have paid at least 50% of the total agreed finance (including interest).

• Vehicle Condition: Car must be roadworthy, without excessive wear or damage.

• Mileage Risks: Exceeding agreed limits may reduce car value or lead to charges.

Steps for VT:

1. Check your agreement for the 50% clause.

2. Ensure the car meets condition and mileage requirements.

3. Contact your finance provider to arrange collection.

Tip: VT can save money if you no longer need the car, but careful review of the contract avoids penalties.

Understanding Settlement Figures

Settlement figures are the amounts you must pay if you want to end a car finance agreement early. They are calculated by your finance provider and represent the total remaining balance on your contract, including any interest, fees, or other costs outlined in your agreement. Many drivers are surprised by the figure because it often exceeds the sum of the remaining monthly payments. This is because early settlement calculations take into account the total finance charge over the full term and any administration or early repayment fees.

Settlement figures apply to both PCP and HP agreements, but the implications differ. With PCP, you may also need to account for any outstanding balloon payment if you intend to own the car. For HP, the figure typically covers the remaining balance of the loan and any applicable early repayment fees, but ownership is automatically transferred once the final payment is made.

To request a settlement figure, contact your finance provider directly. You will need to provide your vehicle registration number, agreement reference, and possibly proof of identity. Once provided, review the figure carefully and confirm all components, including interest, early settlement charges, and administrative fees. Understanding exactly what you are being asked to pay helps you plan your finances, avoid unexpected costs, and make an informed decision about whether early settlement is the best option.

Early settlement can offer savings on interest if executed wisely, but clarity and preparation are key to ensuring it is genuinely beneficial.

Selling or Part-Exchanging a Car with Finance Outstanding

If you want to sell or trade a car while finance is active:

• Dealer Settlement: Dealership pays off finance on your behalf, balances can be applied to a new car.

• Private Sale: You must settle finance before selling legally. The buyer cannot assume responsibility until finance is cleared.

• Ensure your name as registered keeper matches the paperwork.

Next Steps Checklist:

• Confirm your name on the V5C.

• Ensure insurance, tax, and MOT are in place.

• Check your finance agreement for VT or settlement options.

• Plan for end-of-agreement choices: balloon payment, return, or ownership.

Conclusion

Understanding who is the registered keeper of a car on finance ensures clarity over responsibilities, legal compliance, and day-to-day obligations. The registered keeper is usually the person listed on the V5C, while ownership remains with the finance company until all payments are complete.

Take actionable steps today: confirm your role, maintain MOT, insurance, and tax, and explore early settlement or voluntary termination if circumstances change. This knowledge protects you from fines, legal issues, and unnecessary costs.

Frequently asked questions

Q1: Can I be the registered keeper but not own the car?
Yes, the registered keeper is responsible for daily upkeep but ownership remains with the finance company.

Q2: Does changing the registered keeper affect finance?
No, ownership remains with the finance provider. You must notify DVLA of any keeper changes.

Q3: Who pays fines for a car on finance?
The registered keeper receives DVLA notices and is responsible for payment.