Logbook Loans with Outstanding Finance

Logbook loans are loans secured on your vehicle, so the lender owns your vehicle until you pay the loan back. You can keep on using your vehicle as long as you repay the loan.

However, logbook loans are expensive and risky, and you should avoid them if you can.

You can normally borrow between £500 and £50,000, depending on how much your car is worth. Although some firms will only lend up to half of your car’s value. When you take out a logbook loan, you’ll usually be asked to hand over your vehicle’s logbook or vehicle registration document.

But even if you don’t, you’re still handing over ownership of the car until the loan is repaid.

Logbook loans are used only in England, Wales and Northern Ireland. They are not available in Scotland – if you’re offered a loan there, it’s likely to be a hire-purchase or a conditional sale, so check carefully what is involved and how it works.

You need to be the legal owner of the vehicle, usually with a value over £500 and with no finance outstanding on it.

If a car is bought on finance, such as a hire purchase (HP) or personal contract purchase (PCP) agreement, the vehicle legally belongs to the finance company until the agreement has been settled and all outstanding repayments have been made. Even if the logbook (V5 document) is registered in your name, it is the finance company that legally owns your vehicle, which is why you cannot usually get a logbook loan on a car you do not legally own.

This fact alone may stop a would-be criminal attempting to raise money from your own car albeit, a financed one.