MSE News: Do you know your second-hand car’s history? Beware logbook loans



  • ic
    ic Forumite Posts: 3,262
    Part of the Furniture 1,000 Posts Name Dropper Mortgage-free Glee!
    minislim wrote: »
    my suspicions where correct then.

    but the securing of a log book loan on a car should really still go back to the person who took out the loan. not the car.
    Yes, but it is secured on the car - if they don't pay, the car is taken to pay the loan. Log book loans simply don't work if someone can take out a loan secured on the car, then sell the car. It should be impossible for them to be able to sell the car whilst the loan is secured on it.

    I guess really its no different to buying a house with a mortgage secured on it - your solicitor ensures any charges are removed before you take ownership, and applying your own mortgage to the house. HPI checks are a must.
  • vikingaero
    vikingaero Forumite Posts: 10,920
    Part of the Furniture 10,000 Posts Combo Breaker
    The problem with LBL's are that the lien/bill of sale is registered at the High Court. Originally they were for items such as valuable cargo and the Court is being clogged up by LBL crap.

    What a scammer does is to plan ahead. They pay for a copy of the V5C pretending it is lost and advertise the car. They apply for a LBL and there is a delay between Court rubber stamping it and the details appearing on HPI. In this period the scammer can sell the car with an official V5C, take your money and leave you to deal with the aftermath.
    The man without a signature.
  • Lazgoat
    Lazgoat Forumite Posts: 2 Newbie
    vikingaero, I've had some first hand experience of this.

    Firstly, all the big logbook lenders have sophisticated automated systems that check the details of the V5C the customer has at the time they apply for the loan. This is to ensure there are no copies in circulation.

    Their systems also register their financial interest with the big finance registers, HPI and Experian, within hours (minutes more likely) of a loan being signed. Under their CCTA Code of Practice they have up to 24hrs to do it or they lose all rights to recover the asset from a third party if it is sold on. They do this meticulously to protect their assets!

    This should be mandatory throughout the car finance industry and not voluntary.

    Why is no one standing up against the scammers? They are the real baddies here. They can, and have been, prosecuted successfully for Fraud.

    If all the usual auction and swapping websites required all vehicle sellers to submit the car Reg and get it checked for Finance before it was listed it would save an awful lot of problems with people buying cars already with logbook loans secured on them.

    HPI and Experian could also do a lot of marketing to promote and make more accessible their Finance checks for secondhand vehicle buyers.

    A message across the front of every V5C would also go some way to highlighting the availability of these finance searches to new/inexperienced buyers.
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