Log book loans

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Thu 17 Aug 2017 08:58
Log book loans - Oli rag
I understand that buying a car from the trade, you would be protected from any come back on a log book loan.

What about buying privately, is there an reliable way of finding out if there is any money owed against a car?
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Thu 17 Aug 2017 09:30
Log book loans - SLO76
HPI and most history checking services check for any loans secured against the vehicle including log book loans if you pay for a full check including outstanding finance. If you've carried it out and done due dilligence then it's the loan firms fault for not having noted security on the car.

The risk with these sort of loans is that they can be taken against older vehicles on which you wouldn't normally expect to find finance and thus may have bought without doing an HPI check. Most cases involve cars worth less than £2,000 and almost always no history check has been carried out.

Do a check with a firm like HPI and you'll be fine.

Further to this however is the issue of cars at dealers under stocking loans. This is how most garages finance their stock and it should be settled before you drive away in it however some dealers who're struggling are known for delaying settlement on these loans until long after customers have taken possession. But they will tell trusting customers that the car is HPI clear, even noting such on paperwork. If said dealer goes bust before settling it then the car can be repossessed from the unsuspecting new owner.

This is usually not an issue if you have taken out car finance on the car as the finance firm will run a check themselves (they don't want to lend on a car another firm can repossess or a write off) but if you borrow using a personal loan or you're using savings then this could go undiscovered. Be wary with backstreet garages that seem to change hands regularly but it's possible at larger dealers too if rare.

Edited by SLO76 on 17/08/2017 at 09:46

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Thu 17 Aug 2017 14:11
Log book loans - The Gingerous One

>Do a check with a firm like HPI and you'll be fine

I am not quite sure that I understand the definition of 'fine' here, I am afraid SLO76.

If a logbook loan has been taken out against a vehicle and the debt not paid then the loan company will attempt to takeback the car, regardless of who owns it. They will just get the registered keepers details from the DVLA and rock up at the supplied address, perhaps with a spare key in hand or with a tow truck.

If they see the car they will take it.

Then you will have no car.

You would then need to go back to the dealer (if they are still around) and tell them what happened, showing all the various paperwork given to you by the loan company when they did the snatchback.

Or go back to HPI (for example) if you did the check with them and state the position.

But be aware that I would check check and double check the small print of any T&C's here in case there is something along the lines of "xxxx can only advice you of any parties interest in the vehicle if the party has notified xxxx. No liability or claim will be entertained by xxxx if the interested party has not notified xxxx of any interest in the vehicle."

where 'xxxx' is the name of the agency you did the check with (HPI would be one example, but there are others).

If there is such a condition then they will just turn down your claim and say "well it wasn't on the register/the loan company didn't add it/got the reg no wrong so there's no claim against us. we just gave you the information we held on our register. Thanks, bye."

Now you have no car and little/no comeback.

Even worse is if you have spent money on car whilst it was in your possession.....

Call me cynical, but these are real problems to the car buyer and trader at the lower end of the market (I whole-heartedly agree the sub-£2k level is likely to be most afflicted here, but it affects the market as a whole I should imagine).

I bought a sub-£500 car earlier this year, no problems with that. PO had the car for 5 years, was an accountant, explained to me the reason for sale, house was nice, took me to see the car, was straight up about the problems that the car had and what had been rectified, only 3 owners in 18 years.etc. etc. I didn't bother with an HPI check, my gut feeling was that this was an OK motor was enough. 6 months later it is still on my drive, hasn't broken down and no-ones' attempted a snatchback.

On the other hand, someone who has the V5 in their name and then after 1/2/3/4/5...x months sells the car with excuses like "my wife/sister/auntie doesn't like it" should ring warning bells.

Or they could have it 2 years, then do a log book loan and then sell it, I agree, it could happen. Vendor heads down Desperation Street...

caveat emptor. caveat emptor......trader or private, caveat emptor.....

Be cynical.

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Thu 17 Aug 2017 14:57
Log book loans - RobJP

>Do a check with a firm like HPI and you'll be fine

I am not quite sure that I understand the definition of 'fine' here, I am afraid SLO76.

HPI will cover you for an unregistered logbook loan.

So if you take out a full HPI check, then you will be fine, as they'd either pay you out, or possibly even purchase the loan from the loan company and cancel it.

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Thu 17 Aug 2017 15:45
Log book loans - SLO76
">Do a check with a firm like HPI and you'll be fine

I am not quite sure that I understand the definition of 'fine' here, I am afraid SLO76."

Beaten to it but as said HPI will check for any outstanding loans secured against the vehicle and you'll be covered by their guarantee if it shows up later as long as you've abided by all of the terms of said guarantee. They don't pay out the full market value though and if you bought it suspiciously cheap (more than 30% under retail) then they will refuse to pay out.
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Thu 17 Aug 2017 16:26
Log book loans - The Gingerous One

Ok, Thank you very much for clarifying that both of you.

I was unaware of that.

So then generally, you would be fine, though without a car and possibly not getting all your money back.

As you can probably tell, I have never done this, I either bought cars from dealers who have been around years (10+) or else privately and just went with my gut feeling.

It doesn't change my level of cynicism though in this area however....

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Thu 17 Aug 2017 16:43
Log book loans - SLO76
Gut instinct comes into play here. If you're buying a sub £2k motor from an old buddy who's owned for 10yrs and it comes with a stamped up book and a fat wallet full of receipts then you're good to go but if you're looking at dearer stuff or thinking about viewing at a car that's been with its current keeper for less than two years then be wary. Always get an HPI check done if there's even the slightest doubt and remember the guarantee doesn't cover you if the seller did the check, it needs to be you.

I still think private sales are the best way by far to buy a sub £4k car. From this pricepoint downwards the trade is dominated by rogues and cheats. Many larger dealer will hang onto good trade in stock and retail it but mostly it'll be heavily overpriced to offset their risk and effort.

Buying privately you get to meet the owner face to face, see where the car was kept and get a good feel for what sort of person they are. At a dealer you'll almost always be told it was a wee old lady or some other lie. Truth is sales staff rarely know where their stock came from, even if it was a trade in its likely another member of staff took it in and let's be honest here they'll tell you anything to get you to buy.

An HPI check doesn't cost much and give a good degree of cover if you do it properly using both the reg no and vin. Plus also bearing in mind that the car must be registered to the address you viewed it at. This is of course only common sense. Never buy a car if the address doesn't match and never buy one with no V5 present. Look out for the yellow trade section missing too. Fly traders often sell posing as private sellers and you'll get the usual excuses such as "We were trading it in but changed our mind, the dealer filled it in already" "it's my auntie/uncle/nephew/great great grans motor I'm selling on their behalf" etc etc.

Trust your guts and take another pair of eyes and ears along too. I love outing these scumbags but it would frighten people if they followed me to some of the motors I'm asked to view. Honesty and decency are rare commodities in the used motor industry from dealer and private punter alike.

Edited by SLO76 on 17/08/2017 at 16:48

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