Buying a car with finance can be thrilling, but questions about ownership can quickly put the brakes on your excitement. Worry not! Here we unpick the sometimes-confusing world of V5C names and car finance, clarifying who’s legally responsible and offering safe routes for the road ahead.
What is a V5C?
The vehicle registration certificate, or V5C log book, is the document that registers your car to the DVLA and ensures the car is on the national vehicle register. This little red form may be small and unassuming, but it’s the most important document you possess in relation to the ownership of your car. It goes by many names: the vehicle log book, log book registration document, V5 registration certificate, or nowadays just the plain old V5 or V5C. Whatever you prefer to call it, it’s the official record of who is the registered keeper of the car.
The V5C was given a redesign in 2001 following thefts of blank documents. It was further redesigned and simplified in 2019 to help ease the transition to digital and improve customer experience.
The V5C contains all the important information about your vehicle, including the make and model, colour, fuel type engine size and chassis number. It will also include:
The name and address of the registered keeper
Date of the car’s registration
How to obtain a V5C?
To apply for a V5C (logbook) you will need to fill in a V62 form. You can order a free V62 form online or get one from your local post office. Complete the required sections of the V62 and then send it to the DVLA. If you are not yet the registered keeper of a vehicle, or you need to make changes to an existing V5C, you must make an application by post.
If you need a replacement, you can apply for one online via the government’s duplicate vehicle log book service, or simply fill in the relevant sections of a paper V62 form and send it to the DVLA, as above. You’ll need to provide a reason for requesting a new V5C (you’ve lost your old one, for example) and provide your car’s registration number, VIN number and your postcode.
If you’re applying for a new V5C because the old one is lost or damaged, it will cost £25 for a replacement.
If you’ve bought a car and haven’t received a logbook, you should get the V5C for free, providing you fill in the V62 and inform the DVLA within 6 weeks. If you leave it later than that, you’ll need to pay £25.
If you’ve bought a second-hand car, you’ll need to include the green ‘new keeper’ slip. Attach it to your V62 form when you send it to the DVLA and you should get the V5C for free.
Updating a V5C
Any changes in ownership, address, or vehicle details must be promptly updated on the V5C.
It’s really important to keep the details up to date: you could be fined up to £1,000 if you don’t inform the DVLA when your name and address changes. Out of date information in the logbook could also cause problems should you want to sell your car: potential buyers could be deterred by inconsistencies.
Updating your V5C is usually free. Click here for step-by-step guidance on how to change your address on the V5C.
Who’s the registered keeper? Understanding V5C ownership
The registered keeper of a car is the person who drives the vehicle and uses it most. The owner is the person who bought the vehicle and registered it with the DVLA. Usually, the registered keeper and the owner of a car are one and the same person.
Sometimes, however, the registered keeper and the owner are two different people. If, for example, a parent buys their child a car when they are legally able to drive, the parent would be the legal owner, but the young person would be the registered keeper.
The registered keeper is the one responsible for taxing the car and paying any road fines, parking tickets and so on, and not the registered owner (unless they are the same person).
His ride, your loan: When V5 names and finance don’t match
It’s against the law to take out finance on another person’s behalf. If you’re the sole beneficiary of a car finance agreement but you then put someone else’s name is on the V5, you are committing fraud.
That said, you don’t necessarily have to be the legal owner or registered keeper of a car to qualify for certain car finance arrangements. Some lenders will provide joint agreement car finance (we’ll come to this in more detail shortly), which enables two people to legally purchase the car together. In this circumstance, the main earner and driver will be named as registered keeper on the V5C .
Sometimes a spouse might want to take out car finance on behalf of their husband or wife. While some insurance companies don’t distinguish between married couples when it comes to ownership, it’s really important to be completely candid with the finance provider if ultimately your spouse is intending to be the main driver. Although some lenders are happy to assist couples to buy a car, if your lender feels they have been misled in any way this is likely to negatively affect your agreement.
Parents piggybacking: helping young drivers to get on the road
Can you take out car finance for your son or daughter? Unfortunately, the short answer is no. Essentially, it’s illegal to take out hire purchase or personal contract purchase finance on someone else’s behalf, even if they are your child or another close relative. This is because every finance arrangement is tailored specifically to your own personal financial situation, and not anyone else’s.
However, there are steps you can take to help your child access car finance. Your options are:
Take out a personal loan yourself and buy your child a car outright.
Make a joint application for car finance if you are also planning on driving the car.
Be the guarantor on a guarantor car loan for your child (more on this below).
Joint applications: sharing the wheel and the V5
Joint car finance is where two people who live together – usually spouses or family members – apply for finance together. This could be a good way to help your child finance their first car as the circumstances and income of both applicants are taken into account when a final decision is made.
Although Oodle don’t offer joint car finance deals, there are many lenders that do. A google search will point you in the right direction.
With joint application car finance, both applicants are each agreeing to pay off the whole debt, even if either of them are unable to pay. At the end of the agreement, providing all the repayments have been made, both parties become the legal owner of the car.
Unless you are making a joint car finance application with a lender who offers joint finance arrangements, applying for finance without disclosing that you don’t intend to be the registered keeper is illegal.
What is fronting?
As we’ve discussed, it’s important to be completely transparent with any potential lenders about your intentions: you must let them know before you apply if you are not intending to be the registered keeper of the car. Failure to do so could mean that you are accused of a type of fraud called ‘fronting’.
Fronting is where, for example, parents take out car finance on a vehicle, and once it’s all been approved then alter the name on the V5C from themselves to that of their child. If a lender thinks they have been deceived it will likely void the agreement and impact your credit rating at the very least – fronting is a crime that can carry serious penalties.
Legal responsibilities with mismatched V5 names
If you buy a car on finance, the finance company will remain the legal owner for the duration of your contract, while you will be the registered keeper. You, the registered keeper, will be responsible for the daily upkeep and maintenance of the car, and for making all the necessary repayments. You will receive all the car’s legal documentation, including the V5C, along with the car. However, it will be the responsibility of the legal owner (the lender) to notify the DVLA of any changes to the status of the V5C registered keeper.
It’s not possible to change the name of the registered keeper of a car on finance until that finance agreement has been paid off in full or terminated for another reason. Until that point, the car belongs to the finance company until the final repayments are made.
The main responsibility of the registered keeper is to keep the car taxed, serviced, insured and roadworthy with a valid MOT certificate.
Insurance entanglements: How V5 and finance affect coverage
If you buy a car on finance, you must let your insurer know that you are not the legal owner. This is because they will need to inform the finance provider when your policy expires, is cancelled or renewed.
When it comes to car insurance, the policy holder is almost always the registered keeper, and not the legal owner. This means that invariably it will be you who must insure the vehicle, and not the finance company. If you don’t inform the insurance company that you are not the legal owner, they could invalidate your insurance policy.
Some insurers will let parents pay for young drivers, however, providing the young person is not the main driver of the car. Often, parents put their children as a named driver on their own insurance policies (rather than as the main driver), helping young people to get on the road without the responsibility of owning a car outright.
V5 names and resale value implications
It’s a long-held assumption that – from a sales point of view – the fewer names there are on the V5C, the better. The implication being that the more owners and registered keepers a car has had, the older it is and more wear-and-tear it has accrued. While this isn’t always the case, it is often assumed that a car that’s only had one owner will likely have been taken better care of than one that has had several.
Although it is the overall condition of a car and number of miles it has clocked up that should have more of an impact on price, it is worth being mindful of the number of keepers a vehicle has had if you are selling or buying – as it could give you more bargaining power on sales value.
Guarantors: adding a safety net to your car finance journey
Sometimes a guarantor loan is offered by certain lenders to young drivers with no credit history, or to people with low credit. Guarantor car finance involves another, trusted person (the guarantor) agreeing to step in and make the repayments should you find yourself unable to. If you are struggling to access finance on your own, a guarantor loan could be an option for you.
