How to Keep Yourself Safe When Buying a Car With a Logbook Loan on it?

Logbook loans are short-term loans that use your vehicle as a collateral against the borrowed money. In effect, they make the lending company the legal owner of the vehicle until you have re-paid the loan fully. What this means for those who purchase such a vehicle is that they are in risk of having their recent purchase repossessed by the lending company.

What Can You Do If Your Vehicle is to be Repossessed?

If an enforcement officer comes knocking on your door, or you get a letter that the vehicle is going to be repossessed, you may not have much options for stopping them. However, these tips can keep you safe:

  • Request the enforcement officer to properly identify himself before you allow him into your premises
  • Ask to see the vehicle's logbook loan
  • Contact the Citizen Advice Bureau and verify the logbook validity
  • Get a written proof of repossessed vehicle

What to do if Your Vehicle has been Repossessed?

If the car you bought has been repossessed by the lending company, it is possibly to get it back or to get your money back from the original seller. However, keep in mind that this is not an easy task and it can be quite lengthy. Unfortunately, success in this matter is not guaranteed.

You can, for instance, re-pay the outstanding loan and then take the seller to court and reclaim your costs. Before you do that, make sure that you get legal advice.

You can also file a complaint against the logbook loan lender. Take a look if the lender is registered with the Consumer Credit Trade Association. This allows you to file a direct complain with them.

Also, before you buy a used car or other vehicle, it is important to check its history. This way, you can lower the risk of buying a vehicle connected to a loan.

Finally, request that the seller gives you the original V5 document and not the photocopy.