Keeping your money safe - log book loans and dodgy lenders
A couple of weeks ago, I read an article in the Mirror* about a young lady who’d bought a car in good faith, only to find out that it had an outstanding log book loan on it. As the loan was on the car, the debt had transferred to her when she bought it and she had started being chased for the payments.
Working in the car finance market I’m sad to say you do come across some dodgy practices. Log book loans can be particularly bad for customers, because they don’t have the same levels of protection and regulation as other types of credit. People can take out a logbook loan on their car and then sell it on. If you buy a car with an outstanding logbook loan on it, as the new owner, you’re liable for the money owed and there’s not much you can do.
We keep our customers safe by carrying out an HPI check on vehicles for them, and I strongly advise all car buyers to get one before they hand over any cash. The majority of car check text services you hear of won’t tell you about loans, so before buying a car, you need a full HPI check to uncover the car’s whole history.
It’s tough for customers at the moment, because on the one hand we’re told that borrowing is bad but on the other you see constant adverts for companies offering you instant cash. It’s hard to know who to trust, so I think it’s really important that if people are worried they take a bit of time to do some homework. Research a company before you take money from them, read some reviews online, and most importantly talk to someone at the company. Dodgy lenders can be pushy and will often avoid explaining the details to you, so if you get a bad feeling just don’t take the risk.