HPI & Bill of Sale Act (Log Book Loan) Protection

[Fireblade69]

After deciding to spend up to 15k on a nice 996 and coming across a few potentials that were tempting, but not quite there, I recently saw an episode of watchdog which highlighted the danger of Log Book Loans being taken out on cars and then the cars sold and the loan defaulting and the car being reposessed from the new owner who knew nothing about it! The scary thing was that they ran a HPI check on it first and it showed up nothing so the new owner thought they were boxing clever.

Now I don't want to spend 15 large on a car only to have to have it taken away, legally, by a finance company so after some investigation I noted that HPI will cover you for up to £30k if it turns out that you got stitched up provided you follow their guidlines.

Now, being the cynic that I am, I'm thinking Payment Protection styley, I.E. They'll only pay out if it's stolen by a one legged chinese dwarf wearing a toupee during a full moon with Jupiter rising in Capricorn or am I too cynical? I don't want to pay through the nose trade and funnily enough, don;t trust most of them that aren't well known specialist and I've seen a nice private one which I want to get properly inspected, including HPI, to ease my concerns but this might be a risk too much.

Does anyone have any experience of HPI enough to advise?

[Observer2]

I think you will find that the scope of the HPI 'guarantee' is very limited. I looked into the detail some time ago and found that it only paid out if they had made a blunder - either failed to pass on Information that was recorded on their system or failed to register information that had been passed to them by a finance company.

So a logbook loan not registered with HPI would not be covered.

This is from memory. Best check out the current detail for yourself but don't expect much because I think it's not available

[POORCARDEALER]

there is no 100% way of preotecting yourself against this, the law needs changing fast.

[blade7]

I asked the same question a couple of months ago, the opinion was there is no protection for a private purchase and if purchased from a dealer you are relying on them to refund you if a bill of sale is discovered. You could register the car at a different addresss and HPI again after a few months, if the seller has defaulted the finance company usually puts a marker on the car at that point, then you'd need to go to court.

Edited by blade7 on Tuesday 1st May 13:29

[mjb1]

Check that the logbook's date of issue is close to the date of the last change of owner - it should be less than a few weeks later.

[daz3210]

mjb1 said:

Check that the logbook's date of issue is close to the date of the last change of owner - it should be less than a few weeks later.

Except the DVLA have just started reissuing ALL log books, cos they had some stolen.

[mjb1]

daz3210 said:

Except the DVLA have just started reissuing ALL log books, cos they had some stolen.

oh yeah. That's not going to help much then. Good old DVLA...

[Dave Hedgehog]

POORCARDEALER said:

there is no 100% way of preotecting yourself against this, the law needs changing fast.

if you buy from a dealer are you protected?

[POORCARDEALER]

Dave Hedgehog said:

POORCARDEALER said:

there is no 100% way of preotecting yourself against this, the law needs changing fast.

if you buy from a dealer are you protected?

Yes, you are, the buck stops with the trader.....trader would then have to sue the person who sold them the car etc

[Fireblade69]

POORCARDEALER said:

Yes, you are, the buck stops with the trader.....trader would then have to sue the person who sold them the car etc

I'm pretty sure a trader would be covered by some sort of insurance scheme. Failing that, they'd probably try to wiggle out of it if it is a business killer which a £15k loss may well be in this climate.

As this is a private deal and I'm relying on the honesty of someone I haven't met as yet, what about accepting a signed statement from them that includes something along the lines of, "As the legal owner of this car, I can confirm that I have no finance outstanding on *car & reg* where said finance is binding against the ownership of said car" or something which is signed by the current owner, myself and possibly a witness. I could then use this as evidence that the owner committed fraud if there was any outstanding unregistered loan against the care and use this as proof if it went to claims court.

Any lawyers in the house care to comment?

Also liking the register at another adress but not sure if that is legal. Anyone have any advice on that?

I've also checked the HPI site and they will cover for this kind of fraud provided you follow the buyers guidelines which, unsurprisingly, I can't find.

[aw51 121565]

daz3210 said:

mjb1 said:

Check that the logbook's date of issue is close to the date of the last change of owner - it should be less than a few weeks later.

Except the DVLA have just started reissuing ALL log books, cos they had some stolen.

They've been doing this for some months, and expect to take until November to compete the task . Can't wait to see the Cost-Benefit Analysis on this little stunt...

Anyway, while the Doc. Ref. No. date changes, the date the curent keeper aquired the vehicle remains the same on the Red V5C .

[blade7]

Fireblade69 said:

I've also checked the HPI site and they will cover for this kind of fraud provided you follow the buyers guidelines which, unsurprisingly, I can't find.

HPI told me they are a database, if they haven't been advised of an interest their terms protect them from liability, I found that out after I'd paid for a check .

[Observer2]

Fireblade69 said:

As this is a private deal and I'm relying on the honesty of someone I haven't met as yet, what about accepting a signed statement from them that includes something along the lines of, "As the legal owner of this car, I can confirm that I have no finance outstanding on *car & reg* where said finance is binding against the ownership of said car" or something which is signed by the current owner, myself and possibly a witness. I could then use this as evidence that the owner committed fraud if there was any outstanding unregistered loan against the care and use this as proof if it went to claims court.

If you propose to rely upon the honesty of someone unknown, do some "due diligence". Go to their address and check they live there. Ask for photo proof of ID and address and record details. Take a photo of them and compare it to the ID. Ask how long they've lived there and previous address. Look out for any piece of information that doesn't 'fit'. If you sniff anything that makes you uneasy ot unsure of the seller's honesty, walk away.

If you explain why you want to do it, an honest person who is a genuine seller will understand and not be offended.

The simple way of ensuring that the seller is unequivocally liable to you for transferring unencumbered title in the car is to make out a written document recording the sale.

"(Make, model, reg. no.,VIN)

Sold by (name of seller) to (name of buyer) with full title guarantee for the sum of £x."

The above is, in substance, a simple bill of sale.

[Fireblade69]

I decided to play it safe and go through a reputable dealer. Paying a premium for peace of mind shouldn't have to the case and the law needs changing.

[goneape]

Since this has been linked by a currently active topic, and since I had not heard of log book loans and wondered what the score was, here is a credible link explaining what this is all about.

https://www.moneyadviceservice.org.uk/en/articles/...

It is pretty self explanatory but the point that got my spidey senses twitching was the line that says, [paraphrasing] "you should check how the credit agreement works because many of them pay the interest only for the bulk of the loan and then pay off the actual loan at the end of the term".

Hence an "owner" suddenly realising they still need to pay a shed load of money to keep the car, and deciding to get rid of it pronto.

Apologies if an un-neccessary thread resurrection but I take the view if I was surprised/unaware of this then probably others are too.

[Negative Creep]

Observer2 said:

If you propose to rely upon the honesty of someone unknown, do some "due diligence". Go to their address and check they live there. Ask for photo proof of ID and address and record details. Take a photo of them and compare it to the ID. Ask how long they've lived there and previous address. Look out for any piece of information that doesn't 'fit'. If you sniff anything that makes you uneasy ot unsure of the seller's honesty, walk away.

If you explain why you want to do it, an honest person who is a genuine seller will understand and not be offended.

The simple way of ensuring that the seller is unequivocally liable to you for transferring unencumbered title in the car is to make out a written document recording the sale.

I know I'm quoting an old post, but if anyone wanteda picture of me the only one they'd get would be of the door slamming in their face

[anonymous-user]

Fireblade69 said:

....

As this is a private deal and I'm relying on the honesty of someone I haven't met as yet, what about accepting a signed statement from them that includes something along the lines of, "As the legal owner of this car, I can confirm that I have no finance outstanding on *car & reg* where said finance is binding against the ownership of said car" or something which is signed by the current owner, myself and possibly a witness. I could then use this as evidence that the owner committed fraud if there was any outstanding unregistered loan against the care and use this as proof if it went to claims court.

Any lawyers in the house care to comment?

Also liking the register at another adress but not sure if that is legal. Anyone have any advice on that?

I've also checked the HPI site and they will cover for this kind of fraud provided you follow the buyers guidelines which, unsurprisingly, I can't find.

Do not rely on HPI.

You could ask the seller to sign something like this as part of the sale agreement:-

"I warrant that I have unencumbered title to the car and am entitled to sell it."

You could sue on this warranty if the seller does not have title. You need not prove fraud. The claim would be for breach of a contractual warranty. Even an innocent seller would be liable on the warranty. The question is - does the seller have assets against which you can enforce a judgment?

If you want to reduce risk, buy from a dealer. If you buy from a private seller, you can mitigate risk, but not eliminate it altogether.

Please re state your question about the address, as I am not sure what your suggestion is there.

Here is the simple document that I use when buying or selling a car:-


AGREEMENT

1. This Agreement is made on Friday 13th NNNN between Billy Spiv (the Seller) and Johnny Keen (the Buyer).

2. The Seller agrees to sell and the Buyer agrees to buy JALOPY POS MARK XXIV registration number 1AM MUG for £LOOOOOOADZ (the Price) together with its tools, equipment, entertainment system, handbook [and the following spare parts: MOULDY COLLECTION OF OLD SHIZZ] (the Car).

3. The Seller acknowledges receipt of the Price. The Buyer acknowledges receipt of the Car.

4. The Seller warrants and represents to the Buyer that the Seller has unencumbered title to the Car and is entitled to pass that title to the Buyer and that the Car is not subject to any finance agreement or other encumbrance.

5. Otherwise, the Car is sold as seen and tested by the Buyer, without any express or implied warranty as to condition or suitability for purpose.

6. This agreement is governed by the laws of England and Wales and the parties submit to the exclusive jurisdiction of the Courts of England and Wales.

Signed and dated

Edited by anonymous-user on Tuesday 22 April 08:48

[GC8]

Im usually reluctant to post after BV72 on legal topics, but Id like to add that very few 'logbook loans' are correctly processed meaning that they arent enforceable in the event that the lendee defaults.

This wont stop a tattooed fkwit with a spectacle lift trying to take the car, but it should give some people hope.

[anonymous-user]

I is know Jack Shizz about log book loans so that is intersting to hear, GC8.

[Fer]

Breadvan72 said:

I is know Jack Shizz about log book loans so that is intersting to hear, GC8.

Who are you, and what have you done with the real BV72?