Logbook loans Car scrapped

Nat1977

Hi,

If you took out a loan with logbook loans and your car was written off in crash, would the loan then become unsecured?

onlypaddy

I don't know - but I would imagine any insurance settlement would pay off the loan before paying to you. I would check this out though because thats just a guess!

michael1983l

You are assuming they are fully comp there? If 3rd party and it wasn't the other drivers fault, there would be no security to take. It doesn't mean that the loan company has no recourse of action though

aimingforadebtfreelife

Because log book loans take a financial interest in the car they would be paid off first by the insurance company. Before any ins company pays out they check data and will see LBL has a financial marker on the car and will pay them what they are owed and give any extra back to yourself.

Imsostupid

Also I am wondering, what if the car broke down and it was uneconomical to repair so you scrap it, what would happen then?

Imsostupid

michael1983l wrote: »

You are assuming they are fully comp there? If 3rd party and it wasn't the other drivers fault, there would be no security to take. It doesn't mean that the loan company has no recourse of action though

Obviously you would still be liable for the loan, but do you think you would be in a better position to ask for reduced payments etc? The worst they can do is send debt collectors to your door now surely?

KingElvis

Push your banger over a cliff and the debt is automatically written off, see the section IV, para VIII for the famous "cliff clause"

It's a small bit of legislation that the log book boys would like to see the back of.

MrRedundant

I think the OP is looking for advice on how to avoid repaying logbook loans.

Nat1977

Nope, Its not even my loan I am enquiring about. My friend was involved in a collision that was her fault and she had a loan on the car. please dont go jumping to conclusions.

CHR15

A loan is a debt, the loss of the car will in no way provide an avenue to avoid the repayment of the debt.

Securing against the car was never the only requirement inthe agreement, the loan would have had to be repaid in cash irrespective of the car.

If the security has gone, it doesn't mean the loan is void.

Similarly, if the car was repossessed and sold for £50, the remainder of the balance would still be required.

LBL are the lowest end of the market so expect things to get heavy very quickly.

KingElvis

CHR15 wrote: »

LBL are the lowest end of the market so expect things to get heavy very quickly.

I would go for the "pay back before tonight and don't get murdered" super discount scheme :rotfl: