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Original poster

Car insurance with a hire purchase agreement

14 replies

DrDreReturns · 27/04/2021 20:40

I am buying a car under a hire purchase agreement. Its the first time I've taken out this arrangement to finance a car. I'm slightly confused by the ownership options when I am searching for insurance. I understand I will be the registered keeper but the finance company will actually own the car until I've paid the loan off. Under the ownership options it just has "leased - private" or "leased - company", all the other options are things like you own it or a family member owns it? Has anyone else come across this - what option did you choose? Thanks.

OP posts:
amusedbush · 27/04/2021 23:15

Honestly, I hadn’t even thought about that and I’ve had insurance on my HP car for three years Blush I selected yes when it asked ‘are you the registered keeper and legal owner’. I’ve just looked online now, clicked no and gone through the options but they don’t seem quite right for HP.

Hopefully someone else can confirm and I guess I’ll be changing my policy if I’ve got it wrong!

Draculahhh · 27/04/2021 23:22

I have always clicked that I am the owner, I was under the impression you are borrowing money from the finance company with the car as collateral so its "yours"

wonderstuff · 27/04/2021 23:27

You're the registered keeper so you own it. Get GAP insurance though, my 13 month old car brought on pcp was written off and the payout only covered the remaining finance, I was left without a car. I'd not really understood the risk of not taking it out, very expensive mistake.

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General money
VeniVidiWeeWee · 28/04/2021 01:38

@wonderstuff

Just because you're the registered keeper does not mean you are the legal owner. Have a look at the top of the picture.

Car insurance with a hire purchase agreement
safariboot · 28/04/2021 02:42

With hire purchase you don't own the vehicle until the final payment. Don't tell your insurer you own it, you could end up in deep shit when they find out!

I think the correct answer is "leased - private", and "leased - company" would be if your company was leasing the car. But if in doubt, contact a real person for clarity.

Original poster
DrDreReturns · 28/04/2021 06:33

Thanks everyone. I'm waiting for an answer from my insurers (I haven't taken delivery of the car yet.) They are online only and don't have call centres for customer service so I am waiting or an email from them.

OP posts:
feliciabirthgiver · 28/04/2021 07:22

Yes 'leased - private' is if you are entering into a private leasing arrangement with a finance company so HP, PCP, PCH etc (leased company is for if you are insuring a leased company car).

As PP's have stated you will be the registered keeper but not the owner (title does not transfer to you until you have made the last payment). Also agree with the suggestion on additional GAP cover, this resolves any issues with you and the funder should there be any dispute about the value of the vehicle in the event of a total loss (write off).
Enjoy the new car!

Original poster
DrDreReturns · 28/04/2021 07:36

@feliciabirthgiver thanks! It's an electric car so something completely new for us! I've never spent so much on a car but the running costs should be really low.

OP posts:
Milomonster · 28/04/2021 07:43

@DrDreReturns gosh this is interesting. Collecting my brand new EV at the weekend. I’m getting PCP (never had finance before) and hadn’t thought about the legal ownership question. My insurance has doubled with new car - I think any savings I hoped to make have been eroded by this.

Original poster
DrDreReturns · 28/04/2021 07:49

@Milomonster weirdly my insurance has stayed exactly the same. I was surprised as we are changing from a 14 year old vehicle to one that is just over a year old - there is a substantial difference in the value of the two vehicles.

OP posts:
Milomonster · 28/04/2021 07:53

That’s interesting - my current car is 5 years old but a lower insurance group. I know lots of factors affect the price but I’m really peeved. Insurer said the cost of repairing electrics is more, new car is more expensive. I have a clean license and no claims.
Anyway, I looked up gap insurance following the comments in this thread. Looks pretty cheap but need to compare. Thanks for starting this thread!

Throwntothewolves · 28/04/2021 08:01

Car insurance companies often lump registered keeper and owner in together when they are not necessarily the same person. For example a car bought by parents for their kid to use on passing their test would belong to the parents, but may have the kid as a registered keeper. The legal owner is the person who pays for the vehicle, the registered keeper could be anyone. In the case of hire purchase the legal owner is the company who you have the agreement with until the amount is paid off. But you are the registered keeper.
It's confusing.

But the one thing I would say is never lie or guess on car insurance. When you need it to pay out the company will do anything they can to avoid doing so, if the details you gave are incorrect then that could get them off the hook.
If in doubt contact the insurance company and ask for clarification

Original poster
DrDreReturns · 28/04/2021 08:55

Just in case it helps anyone else out in future, my insurers have got back to me. The correct option is "leased - private"

OP posts:
amusedbush · 29/04/2021 12:49

Whoops, thank you for confirming that. I’ll go and update my policy now!

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