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Seems like a nice gesture from said creditworthy person but increasingly finance companies are getting very jumpy about the whole thing.

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Fronting is perhaps more commonly associated in the world of insurance whereby parents name themselves as the main driver of their teenager’s car in an effort to bring down the now outrageously high cost of insurance for young drivers (it wasn’t like that in my day, even for my pimped up XR2!) .

However, it also applies to car finance deals where the person who wants to buy the car cannot get credit and so a creditworthy relative or friend gets the finance in their name.

To the casual eye, this simply seems like a nice gesture from said creditworthy person but increasingly finance companies are getting very jumpy about the whole thing. We have seen some T&Cs recently  where in the event of default, the finance company (and this is one of the big boys) has in its terms and conditions that the dealer will indemnify them for all payments and return any commission. This applies whether or not the dealer was aware of the fronting.

For this finance company, they say that if they can prove that the dealer was ‘in on it’, actually the word they use is collusion, then the dealer can be expected to be reported to the police. Serious stuff.

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Nona BowkisHead of Legal Services / SolicitorRead More by this author

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