Getting a car lease for my partner
What a grand gesture! Your partner is very lucky. Taking out a lease as a surprise for someone else is one of the most generous and exciting gifts. Or, perhaps it’s more of a practicality. Many people have taken out lease cars for their partner because they have a better credit rating. Perhaps their partner wasn’t accepted for a lease or finance agreement. Whatever the reason, there are a few things you need to remember when taking out a lease or finance agreement on behalf of someone else.
The finance agreement will be in your name
Even though you won’t be the one driving the car, all of the paperwork will be directed to you. This means you are solely responsible for everything to do with the car. This includes the payments, keeping within the mileage limits, the condition of the car and maintaining the car. So, if a payment is missed or the vehicle or goes over their mileage allowance. It falls on your shoulders. Not only that, you are responsible for any financial action being taken for parking or speeding fines.
Should I tell the lease provider?
Yes, absolutely. The decision to honour a lease is based on the person applying is the primary driver of the vehicle. If this isn’t going to be the case and you do not mention this when purchasing the lease then you are misleading the lease provider. This is known in the finance industry as an ‘accommodation deal’. Penalties for misleading your provider are high and could result in a negative entry on your credit report.
There are some conditions in order to be able to lease a car for someone else which we’ll go through now.
You need to be living at the same address
The lease provider needs to know where the car will be based. If you take out the lease you will need to provide your address. It is assumed that this will be the address where the vehicle will be too.
Who’s name should the insurance be in?
It depends on the Insurance company, in most cases as long as you are named on the policy that is sufficient if your partner is the main driver it is appropriate for them to be the policyholder, however, it is prudent to get in writing from your Insurer they understand that the finance is in your name rather than the main policy holder.
A plus to having a second driver on your insurance policy is that it can bring down your premium. Most insurance providers view married or co-habiting partners to be a lower risk.
If your name isn’t on the insurance you are breaking the law and committing a crime called’ fronting’. Your motor insurance will be invalid and if the insurer finds out, you are likely to have any claim turned down.
If you’re a young driver and found to be fronting then the repercussions are severe. You could find your insurance has been invalidated. Not only that, you can get six points on your licence for uninsured driving and six points means an instant ban if you’re under 21.
You must have a driving licence
In order to obtain a car lease or any type of car finance, you must have a valid full UK driving licence. Even if you will be leasing the car for someone else to use you won’t be eligible to apply for a lease car without a licence. The administration process involved in leasing a car requires your driving licence as proof of identity and for anti-fraud checks.
Not only that, as we’ve discovered above, you must be insured on the vehicle. Insurance companies are less than accompanying to insure someone without a driving licence.
Holding a provisional licence will mean that you can be insured on the vehicle, but you are considered very high risk. This is a risk that most finance houses will not want to take. There will be a handful of lease brokers and finance companies who would offer a lease car to someone with a provisional licence. However, you should be cautious to find a reputable broker. Take a look at this article about how to ensure a broker is reputable.
Is there an alternative?
Without a driving licence, you do still have another option but you wouldn’t be able to orchestrate it as a surprise. If the primary driving factor is because they have poor credit and they are unable to obtain their own credit. Then you can be a guarantor.
If you want to finance a car for someone else but you don’t have a full driving licence then there are alternatives. If the person has bad credit then you could always look at being their guarantor. A guarantor is responsible for the monthly lease payments should the main lease holder not be able to meet their payments. It should be taken seriously because you are ultimately financially responsible for the lease if your partner is unable to maintain the payments.
A guarantor must be 21 years or over, have a good credit score and not be financially linked to you.
Being financially linked to someone means that you have joint bank accounts or have applied for credit jointly. Even if the joint credit was unsuccessful your credit files will be linked. In this instance, you would be unable to be a guarantor for them.
If you are financially linked you could do a “joint” application
So, you can obtain a lease on behalf of someone else. But you must be on the insurance. Your partner can be the main driver on the policy, but you must remain a named driver. This is assuming you have a valid UK driving licence. Without a UK driving licence you wouldn’t be able to obtain a lease on behalf of someone else. You could always consider becoming a guarantor or joint applicant for them. This means you would be responsible for any missed payments on the lease agreement. And ultimately responsible for the overall cost of the lease should your partner be unable to pay.