Can you transfer car finance to someone else?
Whether you’re new to the world of car finance or well versed in its ins and outs, there may come a point in time where you find yourself needing to make amends to your loan agreement.
Asking whether car finance can be transferred to another person is a far more common question than you might think.
However, there are important rules to follow around how and when you can change the name on a car finance arrangement, which we’ll go into more detail in this guide.
Can car finance be transferred to another person?
Generally speaking, the answer as to whether or not car finance can be transferred to another person is typically no, unless specific circumstances are met. Fortunately, in circumstances where this isn’t possible, there are alternative solutions.
As car finance is recorded as legally binding documentation between you and your lender, knowing whether or not you can legally change the name on a car finance agreement is crucial, and you’ll need to be open and transparent when raising this topic with your lender.
When can you transfer car finance?
To determine your car finance eligibility, a lender will need to be made aware of your specific financial and credit circumstances. Ideally, this will have been made clear before you signed the credit agreement.
Being upfront with your lender about your financial stability is crucial at all stages of a car finance application, as sharing this knowledge will not only allow them to help you find the best deal but also make them more open to the potential of transferring ownership of a car.
If you make your situation clear to your lender, and they have good knowledge of your financial situation, then there is a chance they will agree to amend your hire purchase or transfer PCP to someone else - but this isn’t guaranteed, and it’s down to the lender.
What can I do if I can’t put a financed car in someone else’s name?
If you’re unable to change the name on your car finance agreement, alternative approaches will vary from lender to lender. One of the more common solutions is to settle the outstanding debt you currently owe and then take out a new car finance agreement.
However you choose to settle the debt is up to you, but gaining financial assistance from your chosen guarantor can be a much more feasible way to repay your initial debt.
Don’t be afraid to ask your lender for help in how to best approach this matter, as they will be able to facilitate the process to make it as easy as possible.
Signing a car finance agreement with a guarantor
One way to avoid potential car finance issues is by signing your car finance agreement with a guarantor.
A guarantor is someone who is willing to take on the responsibility of a loan if you’re unable to meet your agreed-upon financial obligations. They’re vital to have if your credit rating is limited or low.
You will need to ask consent from your chosen guarantor before they can be written into your credit agreement, and they’ll need to be credit checked beforehand, but a guarantor will provide a safety net should you find yourself in unfortunate financial circumstances.
Will transferring my financial agreement result in transferring ownership of a car?
One thing to bear in mind is that transferring ownership of a car is not the same as transferring car finance. You can’t just give your car to someone else, even on credit. The process is more complex and needs to be registered by the DVLA.
When it comes to car ownership, a car will have both an owner and a keeper. The keeper is the individual who is registered on the registration or logbook, while the owner is the person who bought the car.
If you’re interested in knowing the full extent of how to transfer a car to someone else, the process can be found on the DVLA website.
If you’re looking for new car finance, or hoping to potentially transfer your current finance to another person, get in touch with the team at Zuto.
We’ll provide you with the help and guidance necessary to get the most out of your finances. You can also speak to our team about hire purchase finance or PCP finance, or head over to our blog for more articles like this one.