Herefordshire Council’s Trading Standards Service is issuing a stark warning to anyone buying a used car that they should always carry out a car data check such as HPI or Experian, to ensure there is no outstanding finance.
This follows an incident on October 23 where an innocent Hereford man had his £1,250 Vauxhall Astra repossessed by “Log Book Loans” due to a previous owner defaulting on a loan for which the car was security.
While innocent buyers are protected where a car has outstanding hire purchase on it, there is no such protection where the car is secured by way of a bill of sale. Log Book Loans offer loans to people with poor credit ratings at very high rates of interest. The loans are secured with a bill of sale on the borrower’s car. The borrower has no legal right to sell the car until the loan is repaid in full.
As was the recent case in Hereford, the borrower defaulted on the loan and sold the car on to an unsuspecting consumer who subsequently sold it onto another purchaser who has now lost out. All three people involved live within our county.
Principal trading standards officer Tim Thorne said: “Bills of Sale were intended to be banned in 1974 but it failed to happen. The government now intends to outlaw them in the next few years due to the severe detriment caused to consumers including those who take the loans out themselves.
“Buying a car with an outstanding Bill of Sale is like buying a stolen vehicle. You have no right to keep it whatsoever. Our devastated consumer now has little alternative but to sue the person he bought it from even though that person was also innocent in the matter,” he added.