Author: Nona Bowkis
Published: March 16, 2016
Reading time: 2 minutes
This article is 8 years old.
Read our disclaimer keyboard_arrow_down
This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.
The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.
The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.
Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.
If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.
All characters are fictitious and should not be taken as referring to any person living or dead.
Use of this website shall be considered acceptance of the terms of the disclaimer presented above.
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.