Financing a car under someone else's name poses risks for both the payer and the owner!

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If you're blacklisted by the finance company, you won't be able to apply for a loan.. However, if you want to finance a car under someone else's name, can you do it?

Being blacklisted makes life harder for various transactions because you're considered a credit risk. You might default on payments to various financial institutions, leading to rejection for transactions due to the risk of non-payment.

But if you're confident that you can truly afford the car payments until the end of the instalment plan, there's another method that many people often use: financing a car under someone else's name.

Financing a car under someone else's name means asking someone else to apply for the loan, and then you make the car payments yourself. However, this method carries risks for both parties. Let's see the risks which need to be considered by all parties involved.

1. How can you be sure that the person agreeing to finance the car will be able to make payments until the end without defaulting or missing payments? Because if that happens, there will be potential legal issues and it's the person whose name is on the loan agreement who will be sued instead.
2. How can you ensure that when the payments are completed, the owner of the car's name will transfer the ownership rights to the person who made the payments?
3. If you need to make an insurance claim, it may be more complicated than usual because insurance premiums are typically paid through the vehicle owner's account. However, you might choose to have the insurance policy under the name of the person making the payments for added convenience during usage.
4. If the person whose name is used to finance the car passes away, transferring ownership rights of the car may become more complicated than before. Normally, the car would be considered part of the deceased's estate and would be inherited by family members first.

The way to mitigate such risks is to have a clear agreement between the person making the payments and the named owner of the car. Also, keeping the car keys separate for each party or opting to use a family member's name can help. 

However, this doesn't guarantee a 100% risk-free situation. If you're willing to accept the aforementioned risks, you can proceed to get a car this way for your usage needs.

Read More: Important things you should know before selling a car installment

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