A logbook loan on a car means that the finance company is legally the vehicle’s owner until such time that any loan taken out against it is re-paid in its entirety. If you by chance purchase a vehicle with such a loan taken out against it, and the original borrower ceases payments on the loan, it is within the financial company’s rights to repossess the vehicle until such time that the loan is fully repaid. In addition, no court order is required for the financial company to repossess the vehicle.
What are your options if a lender intends to repossess your car?
Should you happen to be sent a letter indicating that the car will be repossessed, or an enforcement officer comes to your house to take it, stopping them may not be an option. These tips will help keep you safe:
Request proof of identity and the authority to repossess the vehicle.
Request to see the logbook loan. They are required to present this upon request.
If you have time, get in touch with the Citizens Advice Bureau to help verify the validity of the logbook loan
If at any point you feel threatened, contact law enforcement.
Do not jeopardize your own safety.
Request written proof of what was repossessed.
Copy down contact information for the respective company.
What to do if a lender has repossessed your vehicle
It is possible, if your car has been repossessed, to try to regain it and be re-compensated by the original seller of the vehicle. But it can often be a lengthy and costly endeavor, with no guarantee of success.
One option is to re-pay the outstanding loan, and take the seller to court to reclaim the costs, or take the seller to court directly.
Seek legal advice before you take anyone to court.
Filing a complaint against a logbook loan lender
A number of lenders are registered with the CCTA, or the Consumer Credit Trade Association. This organization has guidelines regarding logbook loans. It requires lenders to catalog any logbook loan in a registry, which in turn shows up in the vehicle’s history. They are also required to follow certain guidelines when re-possessing a vehicle.
If you dislike how a lender or their respective enforcement officer treated you, check to see if they are registered with CCTA, which then enables you to file a complaint with them directly.
Before purchasing a used vehicle, run a history check. It helps reduce the risk of purchasing a vehicle that is still connected to a loan.
However, if the vehicle was registered incorrectly, a history check may not indicate a log book loan. Be wary of any seller who is unwilling or unable to provide you the V5 registration document, or wishes to only give you a photocopied version of it.
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