Logbook loans

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.

We sometimes hear from consumers who tell us:

• 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

A lot of the complaints we see about logbook loans are from consumers who took out the loan agreement. But we also get complaints from consumers who are being chased for payment of a loan because they bought a vehicle with someone else’s logbook loan attached to it. We may be able to look at these types of complaint. 

You can contact us if you want to discuss it further and we can tell you how we might be able to help. 

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.

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. 

We have more information available about what we look at in relation to unaffordable lending and financial difficulties. 

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.

We have a range of ways that you can get in touch with us. 

The Money Helper website, provided by the Money & Pensions Service, has information on what to do if you’re struggling with debt.

You can also get advice on debt and other money related problems from Citizens Advice. 

Financial businesses looking for information about how to resolve complaints can find out more in our detailed information about handling complaints about logbook loans.