Buyers beware of the lurking logbook loan debt
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.