Logbook loan repossession
If a logbook loan has defaulted, the creditor can repossess your car. They must wait a minimum of five days after the account has defaulted before they can take the vehicle away. They don’t need to take you to court to do this.
They’ll usually tow away the vehicle. There are no limits on the time they can do this, so they may arrive late at night or very early in the morning. This is normally done by specialist debt collectors or bailiffs (enforcement agents), and they can use force to repossess the vehicle.
Extra charges will usually be added to your debt to cover the costs of removal.
After the logbook loan company has taken your vehicle they’ll auction it. If the sale price at auction isn’t enough to cover the whole debt, you’ll have to pay the ‘shortfall’. You can treat this like any other non-priority debt, like credit cards and personal loans, and offer to pay it back in instalments at an amount you can afford.
If the sale price of the vehicle is more than the total you owe, the difference must be paid back to you.
Logbook loan code of practice
Most logbook loan companies have signed up to a code of practice produced by the Consumer Credit Trade Association (CCTA)
The code includes some extra protection for consumers. Creditors who are signed up to it will:
- Consider reducing your loan payments if your circumstances change
- Let you hand over the vehicle at any time to settle the debt if you can’t pay it
- Only repossess your vehicle as a last resort
- Give you two weeks after repossession to pay off the debt and get your vehicle back
If a logbook loan company displays the CCTA logo, they must follow this code. If they don’t, you can complain to the CCTA.
Selling a logbook loan vehicle
Once a logbook loan has been made the vehicle doesn’t belong to you again until you’ve made the last payment.
As the vehicle is not yours to sell, you’re breaking the law if you do this, and the creditor may take criminal action against you.
If you do sell the vehicle, the logbook loan company can repossess it from the new owner. They don’t need a court order to do this. If this happens, the person who bought the car from you could take court action against you to get their money back.
Logbook loans are all recorded on a database called the HP Index which anyone can check before they buy a vehicle. This means if you try to sell a vehicle with an outstanding logbook loan, no dealership will buy it from you.
Logbook loan debt help
If you’re struggling to make the payments to a log book loan, contact us for free, confidential debt advice. Our online Debt help tool will provide you with the best solution to your debt problem. Or call our Helpline on 0800 138 1111 (free from all landlines and mobiles).