Avoid log book loan nightmares
With new ‘64’ plated cars now rolling out of the showrooms, many people will be seeking out second-hand bargains, from the part exchanges that most new car transactions generate. Yet, do not get carried away with the excitement of driving away in a ‘new’ motor – make all the usual checks and, especially if you are buying privately, regard it as paramount that you invest in a vehicle history check.
Not only will this give a background on whether, or not, the car has been stolen, written off, or even clocked, it will also reassure you that finance has not been taken out on the car, such as a log book loan, which has become a popular means of obtaining credit, as more traditional methods dried up in recent years.
While obtaining a loan, using their cars as security, enabled owners to raise cash, the finance rested with the car. Therefore, it is possible to sell the vehicle and dump the liability onto an unassuming buyer, who might only find out, when the car is repossessed later by the finance company.
Although steps can be taken after the event, it is best to ensure that any car you might be viewing does not have outstanding loans secured on it, before signing the log-book. While there are companies that will conduct checks instantly, by text message, for only several pounds, we have heard reports of some information being inaccurate and so use a company that will insure you, if any of its supplied data is incorrect. HPI, for example, covers you for up to £30,000.