At SMEs it is a common arrangement for the company to buy the car but to have the colleague entered as keeper (üzembentartó) in the vehicle registration certificate – because they use it, they pay for the insurance, or because this way “their bonus is kept”. For sole traders the question is the other way round: the vehicle is in the private individual's name, and the business is the same person. As a broker, I see that these arrangements are rarely made for insurance reasons, but their consequences show up precisely there: who takes out the compulsory motor third-party liability insurance (MTPL), whose bonus-malus it is, and what counts as the company's fleet. I have described the keeper–owner–leasing roles before; this article is about what happens when the keeper's right leaves the company.
- Under Section 4 of the Gfbt. (the MTPL Act), compulsory motor third-party liability insurance (MTPL) must be taken out by the current keeper; if the employee is registered as keeper, they are the policyholder, they pay, and their omission is what leaves the vehicle without cover.
- The bonus-malus is tied to the person, not the vehicle: it cannot be transferred between a company and a private individual, and the former keeper's classification can be kept for two years from the end of the contract.
- Under Section 3 of the Gfbt., a fleet consists only of at least five vehicles of the same policyholder keeper – a legal person, sole trader or individual firm (egyéni cég) – so a car put in the employee's name drops out of the company's fleet.
Who is the keeper, and why do they take out the MTPL?
Under Section 3 of Act LXII of 2009 on Compulsory Motor Third-Party Liability Insurance (Gfbt.), the keeper is the keeper entered in the official document, or failing that, the owner. Under Section 4 (1), the keeper of every motor vehicle based in Hungary is obliged to conclude an MTPL contract; under paragraph (2), the obligation rests on the current keeper from the start of the vehicle's use until its permanent end, and paragraph (3) states that, for the purposes of the obligation to conclude a contract, anyone whom the owner names as keeper under a contract or another credibly proven legal title also counts as the keeper. Two things follow from this. If the colleague is the registered keeper, the MTPL is in their name, they are the policyholder, and they receive the premium notice and the payment reminder – the company, as owner, is not a party to the contract and does not even receive notice of it from the insurer. And if the premium is not paid, under Section 21 (4) of the Gfbt. the insurer sends a reminder setting a sixty-day grace period, and if the grace period expires without result, the contract terminates on the sixtieth day after the due date; the keeper pays the statutory uninsured-period fee (fedezetlenségi díj) for the period without cover, and damage caused with an uninsured car is compensated to the injured party by the Compensation Account (Kártalanítási Számla) managed by MABISZ (the Hungarian insurers' association), which can then reclaim the amount paid from the keeper who was left without insurance. The company is therefore the owner of a car whose insurance fate depends on the employee's punctuality.
How the transfer works and what happens to the old contract
The parties transfer the keeper's right by a contract set down in a private document with full probative force; under the transport administration rules the change must be reported within 15 days at a government office (kormányablak), where a new vehicle registration certificate is issued; the vehicle title document (törzskönyv) stays with the owner, and the Duties Act also treats acquiring the keeper's right as an acquisition of property, on which a duty must be paid. On the insurance side, according to Netrisk's guidance, the previous MTPL has to be terminated on the ground of loss of interest (érdekmúlás), the new keeper has to take out their own contract, and to avoid a gap in cover it is advisable to conclude the new contract with effect from the day the old one ends. For a fleet car, this means the vehicle is removed from the company's framework contract and the employee takes out a retail MTPL – the comparison of fleet and retail MTPL covers the difference between the two pricing logics. Casco (comprehensive motor insurance) is a separate question: anyone with an insurable interest in the vehicle can be the casco policyholder, but under the policy conditions the indemnity is due to the insured – typically the owner or the financing company – so the casco usually stays in the company's contract, and the employee-keeper appears at most as the person paying the premium. Whether the company's casco extends to the vehicle kept by the employee on unchanged terms differs from insurer to insurer and must be checked in the fleet contract.
Whose bonus-malus is it?
The rules of the bonus-malus system are set out in NGM Decree 21/2011, and the essence is simple: the classification is tied not to the vehicle but to the person of the keeper, per vehicle category. According to Netrisk's summary, the former keeper can carry their existing class over to another car within the same vehicle category, and this is possible for two years from the end of the previous contract. The company and the employee are two separate persons, so the company's MTPL history does not pass to the employee, and vice versa: if the colleague brings their own class, built up over years, to the company car, it remains theirs – when they leave the company, the bonus goes with them, and the company starts on the car it takes back without a history of its own. In a fleet, moreover, the bonus-malus cannot even be interpreted in the usual form: insurers typically set the fleet premium on the basis of the loss ratio of the fleet, not from classes, so for a car removed from the company's fleet the employee gets their own classification or – if they have no history – the base class. Anyone who makes an employee the keeper so that “the bonus is kept” is therefore preserving the colleague's bonus, not the company's.
What is left of the fleet?
Under Section 3 of the Gfbt., a motor fleet is a jointly managed group of vehicles insured with a given insurer by the same policyholder keeper – a legal person, sole trader or individual firm – if their number reaches five on the first day of the insurance period. The key phrase is “the same policyholder keeper”: a car registered in the employee's name is not the company's contract, so it does not count towards the company's fleet, however much the ownership is the company's. At a company with six cars, two such transfers already take the fleet below the threshold, and the fleet status may be lost on the first day of the next insurance period – I described what this means for premium and administration in the article on the fleet threshold. For sole traders the situation is more favourable than many believe: the Act also names the sole trader as a possible fleet policyholder, so anyone who keeps at least five vehicles in their own name for their business can take out a fleet policy. Whether the insurer accepts a car used for mixed – partly private – purposes into the fleet is decided at the quotation stage and differs from insurer to insurer.
What moves together with the keeper
Registration as keeper is not only an insurance question, and some companies notice this only afterwards. Under the Vehicle Tax Act, the person liable for the annual vehicle tax is whoever is listed as keeper in the vehicle register on the first day of the year – so this passes to the employee. The strict liability rule of the Road Traffic Act – speeding, running a red light – also falls on the keeper, as do claims for parking surcharges. The person liable for company car tax, on the other hand, typically remains the owner according to the register, and the personal income tax questions of private use must also be settled by the owning company's accountant – I only touch on these rules here; in detail they are the subject of the article on company car tax and of the accountant. On the employment-law side, the liability for damage of an employee using a company car depends on the usage policy and the employment contract, not on whose name is in the registration certificate.
What should you do before changing the keeper?
First, clarify the purpose. If the intention is for the colleague to pay for the insurance, an arrangement for the colleague to bear the cost, together with the usage policy, can also achieve this, without transferring the keeper's right. If you want to make use of the colleague's bonus, bear in mind that the fleet threshold, the vehicle tax and strict liability all move along with it. If the decision is nevertheless to transfer, time the MTPL switch for the day the old contract ends, check the extent of casco cover in the fleet contract, and request a claims history certificate for the vehicle removed from the fleet. As a sole trader, it is worth asking whether the vehicles running in your own name can be treated as a fleet. If you let me know, I prepare the review of your fleet and the comparison of offers; the government office formalities, the signing and the notification remain the keeper's and the owner's own tasks.
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Sources
- Act LXII of 2009 on Compulsory Motor Third-Party Liability Insurance (Gfbt.) – Sections 3, 4, 21
- Act LXXXII of 1991 on Vehicle Tax (Gjt.) – the person liable for the tax
- Netrisk: Change of keeper – the most important things to do
- MNB Pénzügyi Navigátor (Financial Navigator): The bonus-malus classification system (the classification is tied to the person of the keeper and can be carried over to a new contract within two years)
