When accepting of a logbook loan you will need to sign a Bill of Sale alongside a credit agreement. When signing the bill of sale, you temporarily hand over ownership of the vehicle to the lender in exchange for the loan. This will also give them permission to repossess the vehicle without having a court order if you do fail to keep up with the payments.
A bill of sale will be registered with the high court, seven days of being signed. You can get this checked by writing to the high court enforcement team at The Royal Courts of Justice or you could visit the in person. If you do want to check this, you will need to provide the courts with the name of the person who gave you the bill of sale, the name of the loan company and the date the bill of sale was issued.
In order for the bill of sale to be enforceable and valid, the bill of sale must be in a prescribed format. The specific requirements are too lengthy in order to re late to on logbook loans advice; if you are un- sure make sure to seek advice, however here are a few things that should be on your bill of sale:
- The date in which the bill is being issued.
- Names and addresses of the parties who are involved.
- Statement of which the true consideration may be given.
- Acknowledgment of receipt of the advance.
- A schedule describing the secured chattels – this should not appear in the body of the bill.
- Agreed terms for the maintenance and defeasance of the security – once the loan is paid back in full, the bill will be avoided.
- A clause limiting the grounds of seizure.
Make sure to do your homework on the chosen lender as some companies have been known to use jargon in the bill of sale.
If you are not interested in taking out a logbook loan but are considering buying a second hand vehicle again make sure to do your homework and pay for HPI check on the vehicle as unfortunately there have been many people who haven’t and have had problems when the previous owners failed to pay the loan back in full. Here is a video showing you a clip of someone who did get caught up in this.