Who owns the car?
It depends on the kind of agreement:
| Agreement | Who owns the car | Can you sell it? |
|---|---|---|
| Hire purchase (HP) | The finance company, until the agreement is paid off. Then it’s yours. | Yes. The finance is settled as part of the sale, and we pay it directly to your lender. |
| Personal contract purchase (PCP) | The finance company, until you’ve paid off the agreement, including the optional final payment. | Yes, in the same way as HP. |
| Lease or contract hire, including personal contract hire (PCH) | The leasing company. You rent the car for an agreed time and hand it back at the end. | No. It isn’t yours to sell. Talk to the leasing company. |
| Motability | The car is leased to you through the Motability Scheme. | No. Talk to the company your lease is with. |
HMRC’s VAT guidance says that where an agreement is for the goods to become yours, UK law treats ownership as passing “when the goods are fully paid for or at the latest upon payment of the final instalment”.
How do I know which one I have?
Your agreement says what kind it is, and who owns the car:
- You’re buying the car if it’s called hire purchase (HP), conditional sale or personal contract purchase (PCP).
- You’re renting the car if it’s called a lease, contract hire or personal contract hire (PCH): you hand it back at the end.
- Motability: gov.uk describes the Motability Scheme as one that can help you with leasing a car, so a Motability car is leased to you.
If you’re not sure, ask the company you make your payments to: it can tell you who owns the car.
The V5C (log book) doesn’t answer the question on its own. The Department for Transport has said on gov.uk: “Buyers often mistakenly believe the V5C to be proof of ownership of a vehicle. This is not the case.”
What can I do instead?
- Talk to the company that owns the car. Your agreement explains your options, and the company can tell you what’s possible, for example if you want to end the agreement early.
- For a Motability car, talk to the company your lease is with. Your agreement and the paperwork that came with the car say who that is.
- If the car becomes yours, for example because you’ve bought it from the company that owns it, it’s yours to sell, and you can get your price in the usual way.
We can only buy a car from someone who is entitled to sell it, so we can’t buy a car that’s still leased to you.
What if it’s on HP or PCP?
Then you can sell it, and you don’t need to pay the finance off first: we settle it directly with your lender and pay you the difference by bank transfer before the car leaves you. If the settlement figure is more than our offer, you’ll need to cover the difference before we can complete. That doesn’t stop your instant price: your price page shows the exact figures. Answer yes to the finance question on the form, and add the settlement figure if you know it. Our guide to selling a car with outstanding finance has the details.
General information only, not advice about your own situation. Your agreement sets out who owns the car and what you can do.