Can You Finance A Car Under Joint Names?

 

Yes, you can finance a car under joint names. The process may differ slightly as the lender will need both parties’ details. Not all lenders approve joint applications though, and some impose restrictions such as applicants having to live at the same address.

Read on for the complete run down of financing a car under joint names.

 

Who can I joint finance a car with?

 
A car finance application with a pen on top
 

There are no strict restrictions on exactly who you can joint finance a car with. However, it’s more commonly used for married couples or immediate family. Some lenders may require both parties to live at the same address, so joint financing a car with a friend may be difficult unless you live together.

 

Can I joint finance a car with my child?

 

You can joint finance a car with your child. This is no different than a joint-finance between married couples or other immediate family. Both parties will be responsible for making repayments, and some lenders may require you to live at the same address.

 

What if one of us can no longer afford the repayments?

 

If the person you are joint financing a car with is unable to make a repayment, for any reason, you will be expected to pay the full amount.

It may be possible for them to take a payment holiday, but this is at the finance provider’s discretion and are usually only approved in extreme cases. 

It is also worth noting that any missed repayment will affect both parties’ credit score, even if you are able to pay.

 

Will a joint car finance application affect my credit score?

 

Joint car finance is useful for someone with poor credit, as applying for finance alongside someone with a better credit rating will enhance their chances of being approved.

Related:  What Are The Benefits Of PCP?

A joint car finance application itself will not affect your credit score. The lender will run something called a soft credit search on both you and your co-signers profiles. Unlike a hard search, a soft search does not leave a mark on your credit profile.

Your credit score will only be affected if either you or your co-signer are unable to make a repayment.

 

Who is the owner of a financed vehicle?

 
Close up of cars parked at a dealership
 

As with a regular finance agreement, the legal owner of the vehicle remains as the finance provider throughout the duration of your contract. You only become the owner once you have paid the finance off completely, including any balloon payment or purchase fee.

On joint finance agreements, a ‘primary user’ will be decided and recorded as the registered keeper for the duration of the agreement. In most cases, the registered keeper is responsible for looking after the car, including paying road tax, MOT, and any other services necessary.

 

Is joint financing available on all types of car finance?

 

Joint financing is available on all types of car finance, including Hire Purchase (HP), Personal Contract Purchase (PCP), and car leasing (Personal Contract Hire/PCH).

Joint financing of a lease car however, is much rarer than HP or PCP alternatives. It is still possible, and is aimed more at young drivers still living at home. Some lenders do not accept joint lease applications though, so it is worth getting in touch with them before you apply.

 

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Pros and cons of joint car finance

 

Pros

 
  • Can increase your chances of being approved if a co-signer has good credit and income which strengthens your application.
  • Reduces the cost of financing so you can consider more cars.
  • Can get a brand-new vehicle for a fraction of the cost.
 

Cons

 
  • The car is shared between you and your co-signer
  • If one person misses a repayment, both parties are penalised
  • Being financially linked with someone that has bad credit can negatively affect your credit score
 

Want to find out more about car finance and leasing? Head over to our handy car finance guide page for everything you need to know before getting started.

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