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Car finance ›
Can you transfer car finance to another person?
Updated: Tuesday, 30 January 2024
A car finance agreement is between the applicant and the lender, no one else. For this reason, existing car finance agreements cannot be transferred from one person to another, even if the customer’s financial circumstances change during the agreement’s repayment term.
In this guide, we explore why transferring a car, van, or motorbike finance agreement to someone else isn’t possible and look at your options if you want to end an existing deal early.
Can car finance be transferred to another person?
If you are a Moneybarn customer, then transferring your car finance agreement to another person is not something you can do. If you are thinking of ending your agreement early, please speak to our Customer Services Team.
They’ll be able to explain what options are available to you to end the agreement early, if you no longer want or can’t afford to remain in the vehicle.
If you are experiencing financial difficulties, there are many charities out there that can offer free debt advice, such as Step Change, Money Helper, National Debtline, and Citizens Advice.
Why can't you transfer car finance to another person?
A car finance agreement (like other financial products, such as personal loans and mortgages) is a legally binding agreement between you and the lender.
Your repayment terms will have been agreed based on your credit history and affordability, meaning it’s not possible to simply transfer the responsibility over to someone else, as their circumstances will be different.
If someone else isn’t in the same circumstances as you, this poses a risk for the car finance company, as they might not be able to keep up with the monthly payments. For the borrower, failing to make car finance repayments on time and in full can hurt their credit score and make it harder for them to get credit in the future.
Learn more about what affects your credit score with our guide.
Options for ending car finance agreements early
When you enter into a car finance agreement, you agree to repay a certain amount of money over a pre-agreed period based on your financial circumstances at the point of application. Some people look to transfer car finance to someone else because they can no longer continue making these payments.
If you have an existing car finance agreement that you no longer want, you can’t transfer it to another person, but there are ways to end it earlier than originally planned.
Whether or not it’s possible to end the agreement early will depend on the type of finance you have and the terms of your agreement, so it’s essential to read your contract carefully and contact your car finance company if you are unsure of your options.
Here are a few options for ending a car finance agreement early.
Voluntary termination
With most types of car finance, you have a legal right to end your car finance agreement by voluntary termination. The process for voluntary termination might be slightly different between lenders, but you can do this at any time in your agreement. It’s important to know you’ll have to return the car as part of the process.
For Conditional Sale (CS) car finance, PCP, and HP, you must have paid 50% of the total amount payable, plus any arrears and additional charges (such as excessive wear and tear), if applicable.
If you haven’t yet met the 50% threshold, you’ll have to make additional payments to reach this point before you can voluntarily terminate your agreement.
Early settlement
If you want to keep your car but don’t want to keep making monthly payments, you could choose to pay off the agreement in full. When you request to pay off car finance early, you’ll need to ask your lender for an early settlement figure, which includes all the remaining payments plus any extra charges owed.
Requesting an early settlement is sometimes the preferred option for borrowers who want to sell their financed car. If you buy the car outright and become its legal owner, only then are you free to sell the vehicle to someone else.
You could also choose to make additional car finance payments to reduce the repayment term and the amount of outstanding finance. If you want to do this, you’ll need to contact your lender and discuss whether it’s possible within their terms and conditions.
If you’re a Moneybarn customer thinking of settling your agreement early, did you know you can view your early settlement figure in your My Moneybarn account?
FAQs about transferring car finance
Who legally owns a car on finance?
This differs depending on the type of finance you have. Read our guide: who is the registered keeper of a car on finance to find out more.
For CS and HP agreements, the finance company legally owns the car during the agreement term until it is fully paid off. Once you make your final payment, you become the legal owner.
For PCP agreements, you’ll only legally own the car if you choose to make the balloon payment at the end of your agreement. There are alternative options such as handing the car back or trading it in and starting a new deal, which you can read about in our guide to PCP car finance.
Can you finance a car for someone else?
No, financing a car for someone else is known as ‘fronting’ and is illegal. It is against the law to have a finance agreement in someone else’s name. Read our in-depth guide for more information about why financing a car for someone else isn’t allowed.
Can a family member take over my car finance?
Transferring a car finance agreement to a family member, regardless of their individual circumstances, isn’t allowed. Unless there are two names on the agreement via a joint application, then the key holder of the car finance agreement must be the person who took it out initially.
Can a parent finance a car for their child?
No, even if you’re the parent of someone who wants to take out a car finance agreement, you can’t apply on their behalf. If your child is struggling to find lenders who will provide them with a finance agreement, you could explore other options. Some lenders may accept parents applying for car finance with their child in a joint application.
Can someone else drive my financed car?
Yes, letting someone else drive your financed car is allowed, provided they have the appropriate insurance in place to do so. You will remain as the registered keeper of the vehicle and as the named person who’s responsible for repaying the car finance, as per the terms of the agreement.
A car finance agreement is between the applicant and the lender, no one else. For this reason, existing car finance agreements cannot be transferred from one person to another, even if the customer’s financial circumstances change during the agreement’s repayment term.
In this guide, we explore why transferring a car, van, or motorbike finance agreement to someone else isn’t possible and look at your options if you want to end an existing deal early.
Can car finance be transferred to another person?
If you are a Moneybarn customer, then transferring your car finance agreement to another person is not something you can do. If you are thinking of ending your agreement early, please speak to our Customer Services Team.
They’ll be able to explain what options are available to you to end the agreement early, if you no longer want or can’t afford to remain in the vehicle.
If you are experiencing financial difficulties, there are many charities out there that can offer free debt advice, such as Step Change, Money Helper, National Debtline, and Citizens Advice.
Why can't you transfer car finance to another person?
A car finance agreement (like other financial products, such as personal loans and mortgages) is a legally binding agreement between you and the lender.
Your repayment terms will have been agreed based on your credit history and affordability, meaning it’s not possible to simply transfer the responsibility over to someone else, as their circumstances will be different.
If someone else isn’t in the same circumstances as you, this poses a risk for the car finance company, as they might not be able to keep up with the monthly payments. For the borrower, failing to make car finance repayments on time and in full can hurt their credit score and make it harder for them to get credit in the future.
Learn more about what affects your credit score with our guide.
Options for ending car finance agreements early
When you enter into a car finance agreement, you agree to repay a certain amount of money over a pre-agreed period based on your financial circumstances at the point of application. Some people look to transfer car finance to someone else because they can no longer continue making these payments.
If you have an existing car finance agreement that you no longer want, you can’t transfer it to another person, but there are ways to end it earlier than originally planned.
Whether or not it’s possible to end the agreement early will depend on the type of finance you have and the terms of your agreement, so it’s essential to read your contract carefully and contact your car finance company if you are unsure of your options.
Here are a few options for ending a car finance agreement early.
Voluntary termination
With most types of car finance, you have a legal right to end your car finance agreement by voluntary termination. The process for voluntary termination might be slightly different between lenders, but you can do this at any time in your agreement. It’s important to know you’ll have to return the car as part of the process.
For Conditional Sale (CS) car finance, PCP, and HP, you must have paid 50% of the total amount payable, plus any arrears and additional charges (such as excessive wear and tear), if applicable.
If you haven’t yet met the 50% threshold, you’ll have to make additional payments to reach this point before you can voluntarily terminate your agreement.
Early settlement
If you want to keep your car but don’t want to keep making monthly payments, you could choose to pay off the agreement in full. When you request to pay off car finance early, you’ll need to ask your lender for an early settlement figure, which includes all the remaining payments plus any extra charges owed.
Requesting an early settlement is sometimes the preferred option for borrowers who want to sell their financed car. If you buy the car outright and become its legal owner, only then are you free to sell the vehicle to someone else.
You could also choose to make additional car finance payments to reduce the repayment term and the amount of outstanding finance. If you want to do this, you’ll need to contact your lender and discuss whether it’s possible within their terms and conditions.
If you’re a Moneybarn customer thinking of settling your agreement early, did you know you can view your early settlement figure in your My Moneybarn account?
FAQs about transferring car finance
Who legally owns a car on finance?
This differs depending on the type of finance you have. Read our guide: who is the registered keeper of a car on finance to find out more.
For CS and HP agreements, the finance company legally owns the car during the agreement term until it is fully paid off. Once you make your final payment, you become the legal owner.
For PCP agreements, you’ll only legally own the car if you choose to make the balloon payment at the end of your agreement. There are alternative options such as handing the car back or trading it in and starting a new deal, which you can read about in our guide to PCP car finance.
Can you finance a car for someone else?
No, financing a car for someone else is known as ‘fronting’ and is illegal. It is against the law to have a finance agreement in someone else’s name. Read our in-depth guide for more information about why financing a car for someone else isn’t allowed.
Can a family member take over my car finance?
Transferring a car finance agreement to a family member, regardless of their individual circumstances, isn’t allowed. Unless there are two names on the agreement via a joint application, then the key holder of the car finance agreement must be the person who took it out initially.
Can a parent finance a car for their child?
No, even if you’re the parent of someone who wants to take out a car finance agreement, you can’t apply on their behalf. If your child is struggling to find lenders who will provide them with a finance agreement, you could explore other options. Some lenders may accept parents applying for car finance with their child in a joint application.
Can someone else drive my financed car?
Yes, letting someone else drive your financed car is allowed, provided they have the appropriate insurance in place to do so. You will remain as the registered keeper of the vehicle and as the named person who’s responsible for repaying the car finance, as per the terms of the agreement.
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
