What Car? Q&A - Why does my broker want to keep the V5C?

Q: I have been researching buying a new Ford Mondeo from an internet broker, as the prices are fantastic. However, in the small print, many say that they retain the V5C for six to 12 months 'to get fleet discount'.

Neither my insurance company nor three other insurance companies I have asked will provide cover on a vehicle that is not registered in my name.

Is there a way around this? I don't want to miss out on such a great deal, but obviously I don't want to drive without valid insurance, either.
Terry Jepson, via e-mail

A: This is a fairly common practice, even though it's illegal.

By selling a car and holding onto the V5C for a period, the broker is breaking the law by failing to inform the DVLA immediately the car has changed ownership.

We recently investigated the scandal, and our full report can be found by clicking here.

We did, however, find several insurers that were willing to offer cover to people who are the legal owner of their car, but not the registered keeper - among these were Admiral and Elephant.

The small amount of insurers willing to offer you cover in these circumstances will give you less choice, though, and that could mean you end up paying a higher premium.

If the dealer won't give you the V5C, we recommend you shop elsewhere. However, if you do go ahead with the purchase, we think it's important you understand the all the potential ramifications, and would advise you to read our report fully.

You could, for example, have problems if you were stopped by the police and asked to produce evidence that you own the car.

You might also have problems getting hold of a residents' parking permit.