On borrowed time
26 June 2017
A member of my family used to work for a credit management company and would regularly tell horror stories about logbook loans. Some of them were truly harrowing, so its no bad thing that last weeks Queens speech included the Good Mortgages Bill, with the potential to clamp down on the practice. The NFDAs Sue Robinson described the move as extremely positive and I doubt the rest of the industry is likely to complain.
I suspect a logbook loan is like anything where, if its carried out correctly and responsibly, it should, theoretically, be fine. However, theres no denying their reputation for getting people into serious financial trouble; factor in the governing regulation, last updated in the late 1800s, and its a sketchy practice at best.
You only have to punch the term into Google and scroll down the plethora of available offers to see logbook loans are alive and well, and the fact that they dont have to be recorded on vehicle data registers poses a massive threat to anyone who unwittingly ends up custodian of a car with one hanging around its neck.
The proposed bill is a step in the right direction, but until logbook loans are wiped out, anyone involved in vehicle transactions needs to be on their guard.
Auto Retail Agenda