Car ownership

What does owning a car really involve? Keep reading for all the things you need to bear in mind to keep your car safe - and legal

James Wilson
Jun 10, 2022

Car ownership can be full of ups and downs, but do your homework and there should be more ups than downs, hopefully saving your sanity and your bank balance. Here we cover the main responsibilities of car ownership, including car maintenance and annual costs such as insurance and road tax, before delving into history checks and who legally owns a car, which varies depending upon whether you've bought the car outright, are financing it or leasing. There is also a section on what to do when it comes time to sell.

We've referred to plenty of car terms like vehicle excise duty, MOT and used car warranties. If these look like a foreign language, fear not, as there are explanations about what each of these are. Keep reading for everything you need to know about car ownership.

Main responsibilities of car ownership

Maintenance

One of the main responsibilities of car ownership is maintenance. This covers a wide range of tasks, some of which owners can do themselves, others that are best left to a garage to carry out. Our article on car maintenance covers this subject in greater detail, but regardless of the specific maintenance that is needed, it's beneficial if car owners make sure that they:

  • Get the car serviced to the schedule specified by the car manufacturer
  • Keep records of any work that done - ideally with invoices as proof

Some cars will notify the driver through the onboard computer that certain maintenance work is needed, with a number of garages notifying customers when their car is due a service. If you don't do anything, maintenance work can go overlooked.

This can potentially lead to reliability or safety issues - depending which maintenance hasn't been carried out - and possibly result in you being issued with additional charges at the end of a finance or leasing contract (with types of finance where you hand the car back at the end of the contract).

Meanwhile, if you own the car outright, failing to service a car on time can result in it being worth less when you come to sell or being harder to sell - especially if you skip services completely - as potential buyers can't be sure how well looked after the car has been.

MOT

All cars that are over three years old are legally required to have an MOT every year. It is the driver's responsibility to make sure any car that is being used on the road has a valid MOT at all times - barring cars that are over 40 years old, which in many cases are exempt from this requirement.

There is a range of places that offer MOTs (including garages which do nothing but MOTs and highlight any issues for you to get addressed elsewhere, so there's no incentive for them to exaggerate problems to get more money from you) and a pass remains valid for 12 months. For more information on what an MOT covers, clink on the link below.

Road tax, car tax or vehicle excise duty

Road tax, car tax and vehicle excise duty (normally shortened to VED) are common terms used to describe the tax that owners have to pay to use their cars on UK roads. It is up to an owner to make sure their car is taxed at all times if they are using it on the road - even if it falls into one of the £0 bands, you still have to apply for road tax. There is a handy reminder system the UK government offers, which can ping you an email or postal reminder when renewal time comes around.

When a car is first taxed, the amount due is based on its CO2 emissions as calculated during official tests. Cars with no exhaust emissions (such as fully electric cars) pay zero tax, while the most polluting models are charged more than £2,000. The most common cars in the UK tend to sit around the £100 to £200 mark.

From the second year onwards the amount of road tax due is the same for all cars registered since April 2017, except those that cost more than £40,000 when new. These more expensive models have an additional levy to pay from the second year it is taxed, which runs up to (and including) the sixth year. For more information on road tax, including how to work out what a car will cost to tax, click on the link below.

Insurance

Car insurance is a legal requirement for anyone who drives on UK roads. As a minimum, drivers must make sure their car has third party cover, meaning if you crash into a person, car or property your insurer will pay to repair the damage caused to other people's car(s) or property.

It won’t pay to repair your car, however. This is only covered if you have comprehensive insurance. Insurance typically runs for 12 months and can be paid for in full or with monthly instalments, although a number of insurance providers charge very high interest rates, so it's worth being aware of this.

Finding cars that come with low insurance is a minefield. While there are 50 car insurance groups - and in theory, cars in the lowest groups are cheapest to insure - it's not as simple as the insurance group being the only factor affecting what you have to pay. To find out more about car insurance, click on the links below.

Paperwork

Running a car can generate a large amount of paperwork and it is best to keep the important parts all safe and sound in some kind of filing system. Increasingly, documentation is issued electronically, which is no problem, you'll just need to make sure it is stored safely and you know where to access it when needed.

Some of the paperwork will be needed specifically during ownership, with other bits needed when buying or selling. This includes the registration document (which is sometimes called the V5C), insurance documentation and information on breakdown cover - if you have any.

The V5C can also help you investigate a car’s past. This is because it includes a reference number, which, when entered into the UK government’s MOT history portal, reveals all the garages that previously carried out MOT work on a car.

A quick phone call to these garages can highlight what work has previously been undertaken and - if you are lucky - the garage might be able to give you a general impression of the condition of the car. This is generally most valuable with older cars where the condition can vary more than with new or nearly new models.

Other paperwork is mostly valuable as proof of maintenance being done or evidence of an extended or third party warranty. These kinds of documents are great for showing a car has been well looked after and can make a car easier to sell (in the case where you have bought the car outright or taken ownership at the end of a finance contract). With warranties, it is sometimes possible to transfer the warranty from one person to another, which can be a real selling point and worth mentioning, if you sell the car yourself.

Keeping details correct and fines paid

While you are the owner of a car, it is important to keep the DVLA (the Driver and Vehicle Licencing Agency) up to date with your details. This is for a number of reasons; one is in the event your car is stolen (possibly without your knowledge), the police will pull the information tied to a car in an effort to contact the owner.

If the wrong name and address is registered to the car then things become more complicated. Sometimes correspondence is posted (for example when someone receives a speeding fine) and if the letters go to the wrong address and remain unanswered the consequences can become more serious - such as the requirement to appear in court.

A second reason to keep DVLA up to date with information regarding a car, is that if you sell the car but don’t inform the DVLA, any speeding, parking or other offences will be assumed to be the responsibility of the registered driver. If you don’t want someone else’s misdemeanours hanging over your head, then ensuring the DVLA is kept in the loop is key. Similarly, notifying the DVLA when you take ownership of a car is important, so you get the new V5C sent to your address.

History checks

Before buying a used car it is smart to get a history check. This is a type of search that looks into the history of a car and will flag up if there are any mileage discrepancies (should a car have carried out more miles than the dashboard shows), recorded accidents and also if there is any finance outstanding on the car (if so, the new owner could be liable to settle this, even if they weren't the person to take out the finance in the first place).

There are more extensive history checks that can also provide data such as common MOT failures, the number of previous owners and a market valuation. Some of this information, such as the number of previous owners should be freely available from the person selling the car - and it is shown on the V5C.

Reputable retailers normally include a free history check with all of the cars they have available. It's worth being suspicious if a company refuses to provide a history check on a car or makes it difficult to get your own one done. You can pay to get your own history check carried out by a number of companies including HPI. Some of these are more thorough than others, so it's worth being sure what is covered before paying for a history check.

Who owns a car

It is a common misconception that whoever’s details are on a car's registration document (V5C) is the legal owner. In fact, the V5C merely shows who the registered keeper is. The actual owner could be a company or another individual.

One of the most common cases where the registration document does not show the actual owner is when a car is financed. There are different finance setups and most dealer finance options mean the finance provider actually owns the car until the last payment is made (with Hire Purchase) or until the optional final payment is made in the case of PCP finance - should you choose to keep the car.

For lease agreements, the driver is never the legal owner, as they have to hand the car back at the end of the agreement and monthly payments are effectively just rental payments that provide temporary access to the car.

In the case where an owner and registered keeper are different, much of the responsibility of maintenance falls on the latter. There are some car manufacturers that offer schemes where all drivers need to worry about is just adding fuel, as they include all other maintenance in the monthly payment. This type of setup is relatively rare and can be expensive.

How to find out who owns a car

BuyaCar sales process

If you are looking to buy a car then it is important to establish who owns it. Aside from anything else, this is so that you know the person or business you are buying it from has the legal right to sell it. It can also avoid you inadvertently taking on someone else’s finance responsibilities. It is illegal to sell a car with outstanding finance without making the buyer aware, although this doesn't stop some criminals taking advantage of buyers.

The best way to establish the owner of a car is to compare the V5C, a history check and the details of the person selling the car. If there are discrepancies between any of these you should proceed with caution. For reference, when a person pays off car finance early, they should get documentation to prove as much.

Now, there are plenty of reasons why the person selling a car might not be the registered keeper. For example, an elderly relative might have handed in their licence and another member of the family may be helping to sell the car. The best advice is to use common sense, especially if buying privately. When going to a business to get your next car, using well-known brands is a valuable safety net, too.

When it comes time to sell

When it comes time to sell a car, the driver has two main responsibilities - making sure they are legally allowed to sell the car and, if they do, describing it accurately. If the car is financed, you need to be completely clear on who owns the car - if a finance company owns it, you cannot sell it without the permission of the company and need to know what the outstanding finance balance is to gauge whether this is a good idea or not.

If the car is leased, you don't own it and there's typically no option to buy it. So you can't sell it, as you're not the owner and there's no possibility of taking ownership.

Describing a car accurately is very important if you do advertise it or trade it in. You don’t need to provide a blow-by-blow account of every mark and stone chip, but a buyer should be presented all with the main facts - regardless of whether you are trading it in or selling it privately.

If your car has been in a major accident that you are aware of, this should be disclosed, as should any outstanding finance. If your car is not roadworthy, the buyer must understand that they are purchasing a car that needs immediate repairs or is better suited to being recycled. If you do not describe a car accurately - either verbally or in a written advert - then the buyer has cause to return the car if major pre-existing issues are discovered.

Once you have found a buyer, the correct paperwork must be filled in. For ease, there is an online portal where you can transfer ownership online between the hours of 7am and 7pm. A V5C will be sent to the new owner and you can destroy all of the old V5C apart from the new owner slip, which you should give to the buyer. They must make sure that road tax and insurance are sorted when taking the car away - with your road tax being cancelled immediately when a car is sold.

 

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