legal advice

I swapped vehicles with a friend

Swap back and shake hands.  Or lose a friend and have a lot of hassle.

I did much the same thing with a friend once on a TV,  and he also wanted to reverse the swop some months later, he said my ex-wife i swapped for his TV didn't look half as good as the picture on his TV did.

 Vulcan, unfortunatly it seems the best way is just to swap back. It will leave a bad taste in the mouth, but at least that way you will know if you decide to sell your vehicle you can control the transfer process and not have future debts in your name. I know you have the power to withold changing their vechicle into your name, but you still run the risk of getting debt against yours.  You 'could' hire a lawyer to sort this out, but as it was a verbal agreement and no paperwork was signed, nor the transfers done at the time of the exchange, it is likely to prove expensive, and possibly not the outcome you want.

Probably not what you want to hear, but these things can cause a friendship to break up :( 

You dont outline why your friend wants to change back ? Did you "stitch them up" with a heap of trouble and thats why they want out ?

If i was you I would agree change back unless you both signed a transfer agreement at Nil cost.  worded "Taken as seen."

There is an old saying that a verbal agreement "is not worth the paper on which it is NOT written" but in fact a verbal agreement MAY be regarded as constituting a contract provided the conduct of the parties,when examined,is consistent with the claim by one party that an agreement was made.It appears that you could reasonably claim that an agreement was made;however,it appears that the arrangement involved breach of vehicle registering regulations,in effect a breach of the law(I am not sure about this but it so appears from your description of position)and I would be confident that a court would not direct to enforce an agreement which was in breach of the law.In my opinion the legal route has nothing to offer you in this situation and I would commend the pragmatic advice of earlier posters