What is proof of ownership of a car?
Who owns your car? The legal right to a vehicle rests with the person who holds proof of ownership. Typically, proof of ownership comes in the form of a vehicle title or registration issued by the Driver and Vehicle Licensing Authority (DVLA).
Possessing clear proof of ownership is essential for selling, transferring, and insuring a vehicle. It’s also a legal requirement in the UK. Lacking proof of ownership could jeopardise your car’s resale value down the line.
Whether you’re thinking about buying a new set of wheels, or are in the process of selling your current car, understanding the ins-and-outs of proof of ownership is an essential part of being a responsible driver.
- Why is proof of ownership important?
- Proof of ownership documents
- Registered keeper vs. legal owner
- Establishing proof of ownership when buying a car
- Transferring ownership and registration
Why is proof of ownership important?
Proof of ownership shows who a car belongs to in the eyes of the law. It legally establishes your right to the vehicle, as well as your right to facilitate transactions, manage insurance and taxes, and resolve motoring disputes.
Unlike other possessions, if you give, receive, or purchase a car, this transfer of ownership must be registered with the DVLA.
Possessing valid proof of ownership is not just procedural; it carries profound legal implications. It serves as a safeguard in transactions, ensuring legitimacy and mitigating potential disputes by protecting against unauthorised claims.
Proof of ownership documents
Below is the key proof of ownership paperwork needed for legal car ownership in the UK. It’s imperative that car owners store these documents, along with service and insurance records, securely for future reference and dispute management.
✅ V5C logbook
The V5C logbook is your key to car ownership in the UK. Commonly referred to as the car’s registration document or logbook, the V5C logbook assigns both the legal owner of the vehicle and its legal keeper (the person who drives it). It’s key that the correct owner and keeper are listed, so the DVLA sends any penalties or communications to the correct person.
The logbook plays a vital role in transactions, dispute resolution, and safeguarding against unauthorised claims, serving as concrete evidence of ownership.
Every time a car changes owners, its V5C logbook must be updated and sent back to the DVLA for re-registration. The DVLA then issues a new registration document in the new owner’s name. This document also lists all past vehicle owners and the car’s history. It’s a good idea to update the sections on current mileage and condition to help prevent fraud.
✅ Bill of sale
A bill of sale is a document essential for transferring ownership from seller to buyer. It outlines transaction details, parties involved, vehicle specifications, and the sale price.
As a proof of transaction, this legal document is crucial evidence of car ownership.
✅ Financing agreements
There are many ways to finance a car purchase. All financing agreements play a role in documenting car ownership. While the buyer gains immediate possession of the vehicle after a sale on PCP or HP finance, the financier retains a security interest in the car until the loan is repaid. This means you do not own your car outright until the finance is cleared. You will be named as the keeper in the V5C logbook, while the owner will be listed as your lender.
While these agreements can impact your ability to sell or transfer ownership of your car, it is possible to sell a car on finance. Not just that, you can even clear your remaining finance with the sale of your car!
Registered keeper vs. legal owner
Are you a registered car keeper, or a legal car owner? While the owner and the keeper of a vehicle can be the same person, they can also be two different people or entities.
When we talk about car ownership of a car, we are talking about what is legally required in order to be registered as the keeper. The keeper of the car is the person named on the V5C logbook (registration document or logbook).
To keep things straight, we break down the roles and responsibilities or registered keepers and legal car owners below:
|Legal car owner
|Role: Named in the V5C logbook as the legal keeper, even if someone else purchased the vehicle.Responsible for day-to-day possession and use of the vehicle.Often is the main driver, but can differ from the legal owner of the vehicle.Ensures that the vehicle is properly maintained, taxed, and insured.
|Role: Has legal ownership over the vehicle, including over decisions like selling or transferring ownership.Often possesses the title or registration documents.
– Maintenance – Ensuring the vehicle is roadworthy and properly maintained. Responsible for obtaining an MOT if the car is over three years old.
– Taxation – Handling road tax payments promptly.
– Insurance – Securing and maintaining appropriate insurance coverage.
– Enforcement notices – Addressing parking and traffic enforcement notices.
– Legal decision-making – Authorising sales, transfers, or scrapping of the vehicle.
– Legal liability – Carrying ultimate legal liability for the vehicle.
– Title and registration – Safeguarding and managing ownership documents.
– Financial obligations – Handling any financial transactions related to the vehicle’s ownership.
Establishing proof of ownership when buying a car
Congrats! You’re getting a new (or new to you) car. It’s crucial that you immediately establish proof of ownership to avoid any legal confusion later on. Follow our step-by-step guide to establishing proof so you can hit the road in no time:
1. Examine vehicle registration – Verify that the seller’s name matches both the information on both the car’s V5C logbook and on a valid form of ID such as a passport or driving licence.
2. Review maintenance and service records – Look over the car’s records to get a full picture of its service, repair, and ownership history. Check for any existing liens on the vehicle. A lien is a right to keep possession of someone’s property until a debt is repaid. This can complicate car ownership transfer.
3. Inspect reg and odometer – Match the reg on the V5C logbook with the one on the vehicle. Verify the odometer (mileage) reading for accuracy.
4. Verify legal compliance – Confirm the vehicle complies with local regulations, especially if you live in a Clean Air Zone. Check MOT certificates, maintenance reports, and other mandatory documents.
5. Secure a bill of sale and receipt – Create a detailed bill of sale that includes both parties’ information, vehicle details, and the agreed-upon sale price. Signatures from both parties add legal weight, as does a transaction receipt.
Transferring ownership and registration
If you’ve just sold or purchased a car, it’s imperative that you transfer ownership and register the car in the new legal owner’s name. Be sure to have the V5C logbook, bill of sale, and a valid form of ID on hand to breeze through the transfer process.
Check out our guide on transferring car ownership for more information.
Can you sell a car without proof of ownership?
Selling a car privately without proof of ownership is challenging. Motorway does not recommend selling a car without a V5C logbook, and requires this documentation to sell on its platform. Read our guide on selling a car without a V5C for more information.
What are the consequences of not having proper proof of ownership?
Without proper proof, legal disputes, challenges in selling or transferring, and potential fraud risks arise, impacting the legitimacy of the transaction and the vehicle’s ownership.
How long should you keep proof of car ownership documents?
Motorway advises retaining proof of ownership documents for as long as you own the vehicle, and up to several years after selling it.
How can I track the value of my car?
A key part of car ownership is knowing everything about your vehicle. That includes what your car is worth and how that value changes over time.
As soon as brand new vehicles leave the forecourt, all vehicles depreciate at varying rates, with no rule of averages accurately describing any one car’s changing value. Motorway’s Car Value Tracker provides a free, reliable monthly price alert for up to six vehicles at once.
Follow changes to your car’s value to choose the best time to sell, and make informed choices about investments in your car’s maintenance.