What’s a logbook loan?
This is when you take out a loan and use your vehicle, normally a car, as security for the money you’ve borrowed. The amount you can borrow depends on the value of your vehicle .
You can still use your vehicle, but the lender takes ownership of it from the start of the loan, until you’ve paid the money back. If you don’t pay back the full amount the lender can take your vehicle away and sell it.
When you take out a logbook loan, you’ll usually sign two agreements:
- a personal loan agreement – this has information about how much you’ll borrow, the charge for credit and how you’ll repay the money
- a bill of sale agreement – this transfers the legal ownership of your vehicle to the lender until you’ve paid the loan in full
You’ll usually need to show your vehicle logbook to the lender to prove that you’re the registered keeper and show that you’re insured to drive the vehicle.
Types of complaint we see
We hear from consumers who tell us that:
- they weren’t told the right information about how the loan works when it was sold to them
- the business that sold them the loan didn’t check thoroughly to see if they could afford to pay the loan back
- the lender unfairly added fees and charges to the loan
- they’re having difficulties paying back the loan and the business isn’t helping
- their vehicle has been taken away by the lender
- they had personal possessions in the vehicle before it was taken away by the lender and have been unable to get them back
- they are being chased for payment of a loan because they bought a vehicle with someone else’s logbook loan attached to it
How to complain
Talk to the lender first so that they have the chance to put things right. They need to give you their final response within eight weeks for most types of complaint. If you’re unhappy with their response, or if they don’t respond, let us know.
Bringing a complaint to us is straightforward and won’t cost you anything. We’ll check your complaint is something we can deal with, and if it is, we’ll investigate.
Find out more about how to complain.
What we look at
We look at each case on an individual basis. To help us consider a complaint fairly, we’ll ask you to provide some information. We’ll make our decision about what happened using evidence provided by you, the financial business and any relevant third parties.
We'll take in to account relevant rules and guidance produced by the regulator, law and industry good practice, and decide what a fair outcome is for the particular situation.
Putting things right
If we find the business has done something wrong or not treated you fairly, we can tell it what to do to resolve the complaint. Our general approach is that a customer should be put back in the position they would have been in if the problem hadn’t happened.
What we ask a business to do, and the amount of compensation we ask it to pay would depend on the particular facts of your case. For example, we might ask the lender to change the amount you owe, refund you money, or to make arrangements so you can pay things back more easily. We may also ask them to compensate you for any distress or inconvenience you’ve experienced as a result of the problem.
Tim is unhappy about his logbook loans, which he feels were unaffordable
Emma contacted us about the distress she experienced, when she couldn’t pay a logbook loan which she said was unaffordable
My lender has said it'll take my car, because I can't afford to repay my logbook loan
If you’re worried about money and finding it difficult to know where to start, the government-backed MoneyHelper service can help you find a way forward. Whether it’s living on a squeezed income, working out how to prioritise your bills and payments, or access to free, expert debt advice, they can help you take the first step towards getting on top of things.
StepChange Debt Charity offers free, flexible debt advice that is based on a comprehensive assessment of your situation and provide practical help and support for however long it’s needed.
You can also get advice on debt and other money related problems from Citizens Advice.
Information for financial businesses
If you’re a financial business looking for information to help you resolve complaints, detailed information about logbook loans complaints can be found in the business section of our website.