Finance Company And Pick-up Truck

[Neeranam]

I have a friend who has broken up with his girlfriend and paying off the pickup which they bought together. He says that the finance company owns the vehicle and none of their names are used. He is using his job as security for the loan. He is paying the cash every month. It seems a bit fishy to me that it is not in anyones name. He says that when it has been paid, they will put it in his name.

Does anyone else think this is fishy? Should he be worried about her name maybe being on it?

[AFKAFSinLOS]

He could well have a "finance lease". Or it could be a "hire purchase contract" (UK terminology)/"installment plan" (US terminology). They are similar in nature.

The legal title (ownership) only passes to the lessee (your friend = person paying for the lease) at the end of the contract when all payments are made, or there may be an option to buy at the end.

Hopefully he has a contract outlining this. This would allow him to use the asset for most of its "useful economic life" with an option / automatic right to buy/ become leagl owner at the end.

The lessor (usually finance company and receives payment) has the legal title/"owns" the vehicle up to near the end. This is done to protect themselves if people fail to make payments.

If the contract is in place it would be all above board and legal. Contract would describe terms conditions and rights of each party

Google the terms above on say wiki for further info.

Edited April 22, 2008 by AFKAFSinLOS

[naka]

This is common practice in many countries.

Naka.

[TerryLH]

Someones name should be on the registration papers, not just the name of the finance company.

He should have someone who can read Thai look over the paperwork to see just what it says.

[AFKAFSinLOS]

Someones name should be on the registration papers, not just the name of the finance company.

He should have someone who can read Thai look over the paperwork to see just what it says.

Not necessarily. There are perfectly legit arrangements where the finance company is on the vehicle registration doc, and then there would then be a separate lease/other contract which should have the name of the lessee and terms and conditions.

Getting someone to look over the paperwork as you say is key...Bear in mind there may be more than one document