Buy­ers be­ware of the lurk­ing log­book loan debt

Yorkshire Post - Motoring - - FRONT PAGE -

THE ve­hi­cle his­tory check com­pany, HPI, has been fea­tured on the small screen re­cently, high­light­ing the prob­lems of ve­hi­cle re­pos­ses­sions, credit re­pay­ments and, in par­tic­u­lar, log­book loans.

Log­book loans are fi­nance agree­ments taken out against a ve­hi­cle but, un­like tra­di­tional per­sonal loans, they stay with the ve­hi­cle rather than a per­son. More of­ten than not, they are made avail­able to peo­ple with a poor credit his­tory.

Prob­lems arise when the cars are sold on with­out the out­stand­ing loans be­ing de­clared. Un­be­known to the buyer, the debt trans­fers with the car.

The ad­vice for all is get an HPI Check if you want to avoid los­ing your car or be­ing sad­dled with an un­ex­pected debt – and don’t take the seller’s word for it.

One pro­gramme fea­tured three un­for­tu­nate car own­ers who had their ve­hi­cles taken away or were forced to pay a debt which wasn’t theirs. The first was an older cou­ple whose son bought them a ve­hi­cle from an auc­tion. It turned out the pre­vi­ous owner had taken out a loan on the ve­hi­cle and not paid it be­fore sell­ing the ve­hi­cle on.

The sec­ond cus­tomer lost a brand new BMW in a sim­i­lar man­ner. The fi­nal owner was a young man whose fa­ther had pur­chased a car for him to use for his new busi­ness, only to find there was an £800 loan ac­tive against the car – more than half the to­tal value of the ve­hi­cle.

Out­stand­ing fi­nance re­mains the num­ber one threat to used car buy­ers, with one in four cars checked by HPI still on a fi­nance agree­ment. The com­pany cur­rently holds de­tails of more than seven mil­lion live fi­nance in­ter­ests.

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