Log Book Loans

[grober]

Interesting piece on tonight's Watchdog on the so called Log Book Loans. These are finance agreements taken out by an individuals using their car as security. Due to a legal loophole in the relevant legislation which dates back to the 19th century!! there is no requirement to register this type of security in favour of a finance company SO IT DOES NOT SHOW UP ON ANY HPI CHECK!
Should the owner then sell the car and subsequently fails to repay the debt [ note this debt may have nothing to do with the car's purchase] the finance company can seize the car from the new owner since they have title according to the agreement.

ps here you go:- http://www.logbookloans.co.uk/
evidently these are becoming quite popular!

 

[pepi1967]

oh great so how do you check if there is anything outstanding on it?

 

[Frankie]

I heard about this,although if the receipt for the sale was dated before the loan was taken out,surely they couldn´t then touch the car.

 

[NOMONEYBUTAMERC]

Doesnt the finance company have to be a registered lender , and if so would they then have to comply with the F.S.A, or whoever governs finance companies? Last thing you want is a couple of boneheads knocking on your door to reclaim your pride and joy.

 

[moonloops]

According to HPI they do record finance taken out by logbook loans ??

 

[moonloops]

HPI Warns of Logbook Loans | Motoring News | Honest John

 

[grober]

Doesnt the finance company have to be a registered lender , and if so would they then have to comply with the F.S.A, or whoever governs finance companies? Last thing you want is a couple of boneheads knocking on your door to reclaim your pride and joy.

Apparently not the legislation used does not require the security agreement to be registered even if the company itself is . There is evidently an industry "voluntary code of practice" in place to protect the consumer

 

[grober]

HPI Warns of Logbook Loans | Motoring News | Honest John

I have a feeling the HPI check may work??? if the loan is concerned with the purchase of the car. The problems seem to arise if the car is used as security for another type of loan which has nothing to do with the car and may take place some time after the car was originally bought?

 

[flango]

Just because someone has title on a car does not mean they are the legal owner just as the V5 does not prove ownership. Courts are very sympathetic in cases like this.

 

[Rory]

I have a feeling the HPI check may work???

Even if it did (and WatchDog suggested it might not) then if you're going to use the HPI guarantee you have to be scrupulously careful to follow their rules, particularly that the purchase is made at the address on the V5 and that you pay by electronic transfer.

 

[grober]

The problem according to the program was the vehicles in question were secretly repossessed in the night and this is often the first thing the unfortunate "owner" knows about it. They are then faced with the costs and difficulties of retrieving a vehicle bought in good faith or " paying up" the value of the vehicle to get it back.

 

[martin_a]

I was led to believe HPI will show it up. What the scammers do is get the loan, then immediately flog the car. This means it doesn't show up on HPI because it hasn't had time to be registered with them. Think it takes a couple of weeks. Buyer beware as always.

m.

 

[MD5]

As said earlier, it is a voluntary code of practice to register the "second charge" on the vehicle, so until this practice becomes mandatory, this will escalate now it's become more common knowledge.