OK so obviously you don't own the car on PCP until the balloon payment is made, but what would the view in law be if you were to buy say a £20K car with £10K of your own cash and £10K worth of personal bank loan?
Presumably you would be the owner of the vehicle because the car dealer would have been paid off in full and the bank loan wouldn't have to be secured against the car?
yup, HP or bank loan it's your's from day 1 and thus can go wild with mods (subject to insurance). Your contract is with the bank and the dealer/manufacturer has had their cash in entirety. PCP is different, as the "loan"/contract is effectively only paying off the depreciation of the car over the term, and to actually buy the car at the end requires the balloon payment (which usually is similar to the used car price for that age/mileage - so you're effectively buying a used car, just with a known history).
I know some people argue they "always intended" to buy the car at the end of the term, so why can't they mod?!? But, until the finance agreement has been settled you're effectively renting it. With PCP the person's name is often on the V5, which i think confuses them into thinking they own the car - but if the car is say £40k and there's only £20k in payments through the pcp scheme then how the flip* do they believe they own the car outright is beyond me.