Have you purchased a car on finance lately and you’ve left the dealership with a few questions? Not to worry! Everything you're unsure of, we have multiple answers! So no matter what type of financial plan you're on, you can find an answer with us. One of the most common questions we're asked is, who is the registered keeper of a car on finance? Let's answer that by learning more about finance.
What is buying a car on finance?
Buying a car on finance is the most popular way to purchase a car these days. As cars become more technologically advanced, and therefore pricier, they're less affordable for the regular road user. While there are plenty of second-hand cars available for first-time buyers, you can still see a 10-year-old car sell for thousands of pounds. Something which most people don’t have laying around. So instead, opt for a car on finance.
Having a car on finance is similar to a monthly phone contract. You put down a deposit if you can afford one, and agree on the length of your contract and the price that you will pay in monthly instalments. Now, there are several different finance plans you can go on, so we’ll mention them quickly for you.
PCP. A PCP car financial plan is where you pay a lower monthly payment and you don’t require a deposit (though the more you put down the less your monthly bill will be). It tends to be for three to four years and afterwards, you won't own the car. However, you will have a choice. To pay the final balloon payment (this is typically around £5,000) or alternatively, you can return the car to the dealer and start a new plan with a new vehicle. With a PCP, you never own the car.
Hire Purchase plans are slightly different in that there's no balloon payment at the end, and you simply own the car. That’s because you’ve been paying a higher monthly fee each month in order to pay off the total amount of the car. This is great if you’re looking to keep your vehicle for a long time, but if you drive a lot of miles, it might be worth sticking to PCP.
It’s because of these plans we can understand the question: who is the registered keeper of a car on finance? Because as we’ve highlighted above, for as long as the car is on finance, you don't legally own it. So, what does this mean?
Who is the registered keeper of a car on finance?
It’s important to note that there is a distinct difference between the owner of a vehicle and the registered keeper of the car. While a car manufacturer may own the vehicle, the registered keeper is the person who looks after it. Mostly, the person who drives it most.
It’s important to note that the registered keeper is the person that drives it most because there may be more than one person driving. For example, if you and your partner drive the car, there may be a difference between the legal owner of the vehicle, the registered keeper, and the person who drives it the most. Let's go into detail about this a little bit more.
Whoever takes out the financial agreement on the car legally possesses the car - but does not own it. This means that on some documentation such as the vehicle's V5, your name will appear where it says registered keeper. This means that it's you who's responsible for the daily keeping and running of the car. In other words, if things aren’t up to standards, it's you who the DVLA will be in contact with.
It's the responsibility of the car’s owner to inform the DVLA of any changes to the registered keeper. So when you first take out and end your financial agreement with the car manufacturer, it's they who will have to get in touch with the DVLA and do the paperwork involved. If they fail to do so, they could become legally liable for any offences related to the vehicle, such as speeding fines and parking infringements.
It's important to note also that while typically it's the person paying the financial instalments for the car that is the registered keeper, this doesn’t have to be the case. A parent may wish to buy their child their first car on finance, this is fine, but the person who drives it the most would need to be the registered keeper - which is the child, not the parent (unless they don’t have access to their own vehicle and it's a shared car).
The registered keeper on the car is the person responsible for making sure it has a valid MOT certificate, road tax, servicing, and insurance.
ChooseMyCar Staff Writer
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