It’s not usually possible to buy a car on finance for someone else. In fact, most lenders will ask that the person who signs on the dotted line is also your new wheels registered keeper and main driver. Every car finance agreement is tailored to an individual and suited to your personal circumstances.
It’s all down to the way car finance works; the right loan for you might not be a good fit for someone else. Your deal will consider a whole host of factors including your affordability, payment history, and employment status.
And that’s not all; a financed car that isn’t owned by its registered keeper could cause issues for the lender. If the worst does happen and you can’t keep up with your loan repayments, the lender might not be able to track you down and recover the vehicle.
That’s why it’s against the law to apply for finance and say that you’re going to be the car’s main driver if that’s not true. You should also let the lender know (and ask for their permission) if you plan to change the car’s registered keeper during your loan term.
What is accommodation finance?
In a nutshell, accommodation finance is when you finance a car in your name, but it’s going to be driven by someone else. While it’s not illegal, it’s not standard practice and is considered too risky by most car finance lenders.
Accommodation finance is sometimes confused with fronting. Fronting is illegal and counts as a type of fraud. It’s when you purposely lie to the lender and say that you’ll be the car’s main driver even though you won’t.
Why can’t I finance a car for someone else?
There’s no one-size-fits-all when it comes to car finance. Every agreement is tailored to you and the car you’re buying. Lenders will also carry out checks including a credit check and affordability check to make sure they are lending responsibly.
If you finance a car for someone else, they could end up with a loan they can’t afford and isn’t right for their circumstances. There’s also no guarantee that they’ll keep up with their half of the bargain. Life happens; their budget might get stretched too thin, or your relationship with them could change, leaving you stuck with a large debt in your name.
Can I buy a car on finance for my child or partner?
We know it can be tempting to help as a parent or partner; maybe your child has just passed their driving test and is desperate to hit the road or your partner has a bad credit score but still needs a car for their daily commute?
If these scenarios sound familiar, consider joint or guarantor car finance.
Guarantor car loans can be a good option for people with mixed credit history as they require a third party (we’re looking at you), typically with a good credit score, to act as a guarantor. That means if your child or partner misses a payment, you can step in and pay instead.
Can I buy a car on finance with someone else?
Sometimes, you don’t want to go it alone. That’s where joint car finance could help.
With joint loans, you and another person will both be named on the finance agreement and be jointly responsible for making the monthly payments.
You can both drive the car and split its running costs, but only one of you can legally be its registered keeper.
Keep in mind that joint car finance loans can also come with additional eligibility requirements like needing both people to live at the same address.