Warning to South Holland’s second hand car buyers

Lisa Barwell,  chief officer of South Holland Citizens Advice Bureau. Photo: SG040614-121TW
Lisa Barwell, chief officer of South Holland Citizens Advice Bureau. Photo: SG040614-121TW

A rgular column from Lisa Barwell, South Holland Citizens Advice Bureau

South Holland Citizens Advice Bureau today warns that without a change in the law, more and more innocent second-hand car buyers could have their vehicle taken from them because of an outstanding logbook loan from the previous owner.

New research with 874 used car buyers, released by Citizens Advice nationally, finds:

• 63 per cent of used car buyers did not check if the car they were buying had an outstanding loan attached;

• 2 in 5 drivers have never heard of a log book loan;

• 44 per cent 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.

Citizens Advice found one in five people who reported a problem about logbook loans had had their car repossessed despite not being the original borrower.

A spokesman said: “Some logbook lenders are a menace to drivers and borrowers. The industry is rife with irresponsible lending and some people are signing up to logbook loans not knowing the full implications because the outdated language wasn’t clear.

“Drivers in South Holland can carry out checks to see if there is a loan attached to a car before they buy it. But not all loans will show up and often there is a cost for searches to look for loans. We want the law to be changed so that logbook lenders cannot repossess someone’s car if they are not the original borrower.

“We are pleased that the Government has listened to the problems raised by Citizens Advice through our social policy work around logbook loans and has asked the Law Commission to take a look at these rules.”