Logbook loans receive bad publicity in many cases because of the amount of repossessions that occur when someone buys a vehicle that has a logbook loan attached to it.
This is incredibly unfortunate for the buyer of the vehicle, they have completed their purchase and believe they fully own the car when they suddenly find it has been repossessed.
The car is likely to have been sold by someone who had a logbook loan against the car but didn’t or couldn’t pay it off. If the buyer doesn’t do an online check of the cars history they will never know that there is a loan against the car.
There is generally no way out for the buyer, the logbook lender is the legal owner of the vehicle, they have the full legal right to take the car away and sell it to make back any money that they may have lost on the original loan.
Short term loans image
Short term loans in general have a negative image amongst many people and so that doesn’t help logbook loans either. If all short tern loans are grouped together by the media, then they will all be associated with each other. There has been a good deal of news recently about the short term loan industry becoming regulated by the Financial Conduct Authority, this can only help improve the negative image of v5 loans as short term loans may start to receive a better press.
Many logbook loan companies have been quite pushy with customers who fail to pay back loans on time and have been quick to repossess cars. This has not helped the industry, as thug like practices have been known to be used by those who collect loans for the logbook lenders. The lenders have not helped the name of their industry by acting in this way, however it seems that things are improving with the above mentioned regulation and the entry into the market of companies that realise there is a gap for good, honest lenders who offer great customer service.
Lenders have not been particularly stringent when it comes to checks on a persons income when they are looking for a v5 loan. This leads to a lot of vehicle repossessions and a bad feeling amongst customers. If lenders were tougher with their lending rules in regards to affordability they may not have to deal with so much negative publicity from those who cannot afford the cost the loan they have taken out.
Government subsidised companies such as Citizens Advice monitor the number of complaints they receive in various industries and this can look bad when they publish figures about an industry that receives large numbers of complaints.
In the video below you can see what the Citizens Advice Bureau does and get an idea for how it monitors complaints against various industries or companies.