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Zuto is a credit broker, not a lender. Our rates start from 8.9% APR. The rate you are offered will depend on your individual circumstances. Representative Example: Borrowing £9,000 over 60 months with a representative APR of 20.9% the amount payable would be £234 a month, with a total cost of credit of £5,047 and a total amount payable of £14,047.

Zuto Limited. Registered in England under number 05722976. Registered office: Winterton House, Winterton Way, Macclesfield, Cheshire SK11 0LP. Zuto Limited is acting as a broker and not as a lender. Authorised and regulated by the Financial Conduct Authority, registration number 452589. Zuto can introduce you to a limited number of finance providers, based on your credit rating, Zuto won't charge you anything for this service, but do get a fee from the lender which varies based on the product or amount borrowed.

Can you put car finance in someone else’s name?

It’s not uncommon for people to apply for finance on behalf of someone else. Perhaps you’re a parent helping a child get their first car? Or maybe your partner or close family member is struggling to get finance?

While you’re not breaking any laws if you’re trying to work out how to put a car loan in someone else’s name, you’re almost certainly breaking the terms and conditions set out by your finance company – and the situation could get worse.

Here, we’ll look at why putting car finance in someone else’s name is a problem – and some of the issues you might run into if you try to do it.

Accommodation finance

Finance companies have a term that’s used when someone tries to finance a car that’s actually going to be used primarily by someone else; it’s called ‘accommodation finance’ and, quite simply, they don’t like it.

So, what’s the problem?

Surely as long as you can afford the payments, then everyone’s happy – even if you’re paying a friend or parent to pay it for you?

Well, it’s not quite that straightforward. Finance companies work with ‘risk’ at the heart of everything they do. When you apply for a car loan of any kind, they’ll consider a huge number of factors, including:

  • Your personal details
  • Your job or employment status
  • Your living arrangements
  • Your credit history
  • Your financial incomings and outgoings

A team of ‘underwriters’ look at all this information before deciding whether or not to approve the loan – as well as that interest rate that the money will be offered at. If they consider you a high risk, they may either charge a higher interest rate – or refuse the loan.

Generally, when someone applies for finance using someone else’s name, they’re hoping that the other person’s credit rating or financial status will mean they get approval – or a better deal. The thing is, the car and the finance package isn’t really for the applicant – it’s for the person who’s going to be driving the car.

Effectively, you’re side-stepping all the measures the finance company puts in place to make sure they’re lending money with an appropriate level of risk. They’re basing their lending on the applicant’s details – but it’s you that’ll be driving and paying.

Running into problems

If you do manage to sneak an accommodation deal past a finance company, there are a series of problems that can occur when you’ve got your car.

Usually, the person you’re applying on behalf of is a friend, relative, or someone you’re in a relationship with. So, what happens if the relationship or friendship breaks down? They might stop paying the finance – and you could lose the car, or they might simply be trapped with a large debt that’s not theirs.

Sometimes, if repossession of the car is needed, a finance company won’t be able to track it down – leaving them with no leverage to get the money back from the person who’s applied. 

All of these things significantly increase the risk for a finance company – and finance companies don’t like unnecessary risk.

Is it fraud? 

We’ve already mentioned that an accommodation finance deal doesn’t actually break the law – but in actual fact, there are cases where financing a car in someone else’s name can become fraudulent. 

When you apply for any type of car finance package, you may be required to tick a box or sign to say that you’ll be the main driver of the vehicle you’re applying for a loan for. If someone else is applying for you, this is then likely to be false – so if you lie and agree to the terms anyway, you could be committing ‘Fraud by false representation’ – according to the Fraud Act 2006.

Being found guilty of this kind of fraud can have a big impact on your ability to obtain credit in the future – and might even prevent you from having certain jobs. Put simply; it’s just not worth the risk.

Can you change car finance into someone else’s name?

We’re often asked if someone can refinance a car loan in someone else’s name – and while this could be coming close to being an accommodation agreement – the real reason is usually different.

In many cases, people assume that they can simply pass their finance deal to someone else if the new person wants that car and is willing to pay. 

Since we’ve covered underwriting and risk already, you can probably see why this can’t happen – since the new person could be in a completely different situation to the new applicant. As such, you can’t pass a finance deal to someone else – instead, they’ll need to apply for their own finance package and set up a new finance deal from scratch. 
It might seem unnecessarily complicated – but if you try to take shortcuts, you could find yourself on the wrong side of the law.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

Car loans are calculated according to a number of factors, including the type of loan you take out, the term of the loan and your credit rating.

Whether or not you can return a financed car depends on the type of agreement you have. If you’ve got a hire purchase (HP) or personal contract purchase (PCP) plan, you’re allowed to hand it back – as long as you have paid off at least 50% of the loan, including any fees and interest.

It is possible to modify a financed car – but it’s absolutely vital that you check with the company that provides the finance that it’s okay before you do. After modification, you’ll need to inform your finance company, and insurance company that work has been carried out.

You can approach lenders directly to get a car loan for a used car. However, it’s often best to use an online broker instead. This approach can save you time and help you to find the most competitive deals.

Dealerships and banks have access to some slightly different finance products. Banks can offer personal loans – and dealers can sometimes offer special promotions like 0% APR. Since you’re free to choose – you should compare all options available to you.

When determining interest rates on car loans, lenders take a range of factors into account, including the size of the loan and your credit rating.

As well as checking your credit rating, car finance companies will need some details about the vehicle you’re planning to buy – and some information about your current employment and accommodation situation.

In many cases, yes, changing or part-exchanging a car with outstanding finance is possible. Since car finance can’t be moved from one car to another, you (or a dealership you’re getting your next car from) will have to settle the current loan and begin another on your next vehicle.

Settling a car finance agreement is usually just a case of paying back the amount you borrowed, plus any additional fees. If you want to settle early, you may face extra charges.

Car finance is calculated according to a number of factors, including the type of agreement you take out, your credit rating, the term of the loan and the size of deposit you pay.