As stated above, if the person actually responsible for paying the agreement does not drive the vehicle, there is a greater risk of the finance company not being able to get either the car OR their money back.
Taking into consideration the fact that the whole concept behind accommodation finance is not illegal, the number of applications to finance companies that fall under the 'accommodation umbrella' has increased in recent times, and the lenders are now very aware of the risks. They are now more vigilant when it comes to credit checks, even to the extent that if an application is received from the same address as someone who has been declined, then it may not be approved as it arouses suspicion that someone is trying to obtain finance on behalf of someone else.
If accommodation finance isn't illegal, what is illegal is not declaring that you are doing it. When it comes to the terms and conditions of a finance contract, there is usually a statement that the person taking on the finance is the main driver - and if you state that that is the case when it is not, that is fraud.
In this scenario, both persons involved (the one applying for the finance and the person they are applying for) could be charged with fraud in attempting to deceive the finance company. That could lead to a criminal record, and at the very least, a marker on their credit history that will affect future financial requests.
What is and isn’t allowed?
As every finance provider is different, it is worth checking the rules regarding accommodation finance before applying for vehicle finance as most will not allow any type of accommodation agreement. Others are a little more flexible, allowing it in certain circumstances such as below:
- Husband/wife applying for vehicle finance on behalf of their spouse - acceptable
- Parent applying for vehicle finance on behalf of their child (under the age of 21) who is living at parental home - acceptable
- Parent applying for vehicle finance on behalf of their child (under the age of 21) who is NOT living at parental home – not acceptable as classed as accommodation deal
- Parent applying for vehicle finance on behalf of their child (over the age of 21) regardless of where he/she is living - not acceptable as classed as accommodation deal
Once again, it is important that you check the rules regarding accommodation finance before applying for vehicle finance to ensure you are fully aware of the rules.
To find out if you are eligible for car leasing, take our brief interactive questionnaire before looking at what particular leasing contract type is best for you.
In certain situations, it may also be possible to apply for a joint application. This is dependent upon personal circumstances and the finance provider. To find out if a joint application is appropriate for you, call Nationwide Vehicle Contracts on 0345 811 9595 to discuss your options.