VEHICLE FINANCE · TAKEOVER
Twelve instalments paid, and nothing to show for any of them.
A motorcycle is bought on credit. Eighteen months in the owner cannot keep up, so a friend takes over the payments and the bike. Cash changes hands and the friend starts paying.
The finance agreement was never touched. The debt is still the original owner's, and so is the name on the ownership document.
When the payments stop, the lender pursues the person on the contract, who has not seen the vehicle for a year. The person holding it has paid a year of instalments into somebody else's loan.
An informal takeover, eighteen months in
| Original owner | The friend | The lender | |
|---|---|---|---|
| Legally owes the instalments | Yes | No | — |
| Actually pays them each month | No | Yes | — |
| Holds the vehicle | No | Yes | — |
| Named on the ownership document | Yes | No | — |
| Knows the takeover happened | Yes | Yes | No |
| Bears the loss if payments stop | Yes | Yes | Yes |
Every row where the legal answer and the practical answer disagree is a place the arrangement can fail, and there are four of them.