CAB warns of logbook loans on used cars

Citizens Advice has warned used car buyers could have their vehicle taken from them because of an outstanding logbook loan from the previous owner.

In a survey of 874 used car buyers it found that 63% did not check if the car they were buying had an outstanding loan attached while 40% had never heard of a log book loan.

And 44% did not know they could have their car taken away by a log book lender, even if they are not the original borrower.

Logbook loans, officially called bills of sale, are often taken out against a car. If a borrower fails to repay the loan, the car can be seized by the lender.  But if the car is sold on while the loan is still outstanding and payments are not being made the logbook lender is legally entitled to take away the vehicle from the new owner.

Sue Robinson, director of the trade body the NFDA, said the CAB findings were “extremely concerning”.

Robinson said one solution was for consumers to buy from reputable garages.

“Consumers should always check the provenance of a vehicle and ensure there is no outstanding finance before buying.  A viable way to do this is by buying a vehicle from an NFDA member garage. All our members are part of the ‘NFDA Standards’ which includes a requirement to ensure a vehicle is free of finance.”