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Vehicle Equity Release
The alternative to a logbook loan

A fairer and quicker way to release the cash from your car

What are Logbook Loans?

Logbook Loans are an old fashioned 19th Century type of Loan based on 2 Victorian acts of law that do not do well to protect the consumer. Over the last 15 years, there has been a significant growth throughout the United Kingdom of people using their vehicle as security for obtaining short-term credit, often referred to as a ‘Logbook Loan’.

In England, Wales and Northern Ireland, a Logbook Loan comprises of a Bill of Sale agreement and Consumer Credit agreement securing the loan on the vehicle, whilst allowing the Borrower to retain full use. However, you have to surrender your V5C logbook and often the spare key.

Upon signing both agreements, the ownership of the vehicle is transferred to the lender. Only when the last payment is made to settle the debt will the ownership of the car reverts back to the lender. In addition, a Bill of Sale allows the Lender to repossess a vehicle with upon two defaults, with little protection or recourse for borrowers.

Bill of sale are regulated by two Victorian acts of law:

  • The Bill of Sale Act 1878, and
  • The Bill of Sale Act (1878) Amendment Act 1882.

According to the Law Commission, Bill of Sale's are antiquated and fraught with problems, both legally and practically as they:

  • Allow vehicles to be repossessed on two payment defaults without a court order, offering no protection for Borrowers
  • Give no protection to third party purchasers who unwittingly buy goods subject to Bill of Sale

In Scotland, Logbook Loans using Bill of Sale are not allowed under Scottish Law.

Rather, the Borrower signs an ‘agreement’ transferring ownership of the vehicle to the lender and the Borrower hires the vehicle back under a Hire Purchase (HP) agreement. The Borrower still retains full use of the vehicle providing payments are maintained and full ownership reverts to the Borrower when the final payment is made. Hire purchase agreements are regulated under current consumer legislation.

Over the last few years, the Government has been modernising regulation of the consumer credit market to ensure that it is fit-for-purpose and provides adequate consumer protection.

As part of this agenda, in 2014 the Government transferred responsibility for consumer credit regulation from the Office of Fair Trading (‘OFT’) to the Financial Conduct Authority (‘FCA’).

Responsibility for the regulation of consumer credit has enabled the FCA to tackle some concerns about Logbook Loan Lenders such as aggressive debt collection practices, but the FCA does not have the power to update the out-of-date legislation.

In 2015, the Law Commission initially consulted on the reform of the existing legislation and its final report and recommendations to reform the Bill of Sale Acts (Logbook loans) were published in September 2016.

It concluded that the current law is archaic and wholly unsuited to the 21st century. It recommended that the Bill of Sale Acts (Logbook loans) should be repealed in their entirety and replaced with a new “Goods Mortgages Act” to govern the way that individuals may use their existing goods as security for a loan or other obligations.

The aim of the proposed new legislation was to replace the outdated Bill of Sale Act, with a modern legal framework largely based upon the ‘hire purchase’ consumer credit business model, which has been in existence for many years.

In May 2017, the Government decided to shelve the Law Commission’s review and recommendations to reform the Bill of Sale Act for Logbook Loans in favour of working the FCA as they carry out their high-cost credit review.

The 21st century alternative to a Logbook Loan

The proposed Goods Mortgages Act was never designed to curtail the ability to use your car to release cash, rather ensuring greater consumer protection and more transparency to protect Borrowers. Despite the Goods Mortgage Act being shelved, LoanOnYourCar.com continues to honour the spirit of the proposed ACT, with its gold standard, alternative to a Log Book Loan, product.

  • Ethical & Responsible

    LoanOnYOurCar.com has established itself as an ethical and responsible lender in the UK specialising in Vehicle Equity Release. We use a regulated Hire Purchase agreement, rather than using the antiquated Bill of Sale as used by Logbook Loan providers. LoanOnYourCar.com wanted to redefine the Logbook Loan for the 21st century. This would provide a cheaper, more flexible option and offer greater protection to Borrowers than the current Logbook Loan monopoly.

  • A Proven and Preferable Solution

    LoanOnYOurCar.com are seeking to provide its Borrowers with a proven and preferable solution for those looking to raise short-term finance quickly with no credit checks. This model, in a basic form, has been in operation in Scotland with a Hire Purchase agreement for a number of years, operating with great success and has received positive reviews.

  • The Gold Standard

    LoanOnYOurCar.com is committed to the highest levels of professional care, with its reputation and integrity being paramount. Our aim is to be the ‘Gold Standard Bearer’ against the Logbook Loan and other alternative lenders.

  • Regulated and Accredited

    As a lender, LoanOnYourCar.com is regulated by the FCA and is a fully accredited member of the Consumer Credit Trade Association and fully complying with its 'Code of Practice' to provide ethical lending within the terms of the Consumer Credit Act.

More importantly, our business ethos and culture are premised on the principles of 'treating all customers fairly'. LoanOnYourCar.com will be transparent, honest and fair. We want to eliminate practices that often makes vulnerable Borrowers suffer greatly by lending them too much, not considering an individual’s ability to pay, high fees and unscrupulous tactics for dealing with late repayments.

LoanOnYourCar.com’s mission is to be the first choice for releasing cash from your car and offer a cheaper and fairer alternative to Logbook Loans.

Vehicle Equity Release vs Logbook Loan

V5C(Logbook) and Spare Key

LoanOnYourCar.com:
No Logbook or spare key required
Logbook Loan Lenders:
The logbook, and often the spare key, must be surrendered to the lender. It can take significant time for the Lender to return these to the Borrower after the final payment

Type of Credit Agreement

LoanOnYourCar.com:
Regulated Hire Purchase Agreement offers greater consumer protection, as stipulated in current legislation
Logbook Loan Lenders:
Bill of Sale which are based on 19th century laws and fraught with problems, offering the consumer very little protection. A car can be repossessed without notice if a second payment is missed

Credit Check and Confidentiality

LoanOnYourCar.com:
No credit check is required
Logbook Loan Lenders:
Some Lenders may require a credit check, which will impacting your credit history and your future ability to raise further finance

Speed of Completion

LoanOnYourCar.com:
Contracts issued online and signed via eSignature. Payment within 1 hour of receipt of all documents
Logbook Loan Lenders:
Multiple loan agreements and supporting documents have to be physically signed and witnessed by a fully Independent 3rd party

Price

LoanOnYourCar.com:
Our representative APR is 147.5%. We we are never beaten on price, we will beat any other Lender offer by 10%
Logbook Loan Lenders:
Logbook Loan Lenders typical APR’s range from 200% – 500%

Fees and Charges

LoanOnYourCar.com:
No set up fees, the customer can their loan early, penalty free and at any time. Borrowers can also make over payments at any time to reduce how much interest they pay
Logbook Loan Lenders:
Logbook Loan Lenders can charge set up fees, penalties for settling early and excessive charges if the loan falls into default. Often there is a minimum 3 month period before you can cancel

How does LoanOnYourCar.com work?

  1. LoanOnYourCar.com operates as a regulated primary lender in England, Wales, Scotland and Northern Ireland offering a Vehicle Equity Release proposition as an alternative to a Logbook Loan
  2. LoanOnYourCar.com requirements are for cars under 10 years old, free of finance and have a trade value of more than £1,500
  3. The loan amount will depend upon the current trade value and overall condition of the vehicle. Loan amounts range from £500 - £100,000 and we offer funding options up to 70% of the vehicle trade value
  4. Loans are subject to affordability and suitability based on the Borrower’s verified disposable income and out-goings
  5. With flexible repayment terms from 18 months to 5 years, the Borrower selects the most appropriate monthly repayment options. The Borrower can cancel at anytime penalty free
  6. Over-payments are allowed, and the interest is re-calculated, so reducing your overall repayments
  7. Monthly repayments are collected via continuous payment authority

How do you get your money fast?

Unlike a Logbook loan, LoanOnYourCar.com and the Borrower complete all the contract documentation over the phone and online

Once a detail explanation of the loan and the documents is completed on a recorded phone call with one of our loan experts, the contracts are electronically sent for you to review

Once you are happy to proceed you can ‘e-sign’ the agreements. Once signed we arrange for a 15-minute agent visit to inspect the car and copy some supporting documents. Then we transfer the funds directly into your bank within 1 hour. Its as simple as that

Field agent visit

LoanOnYourCar.com will arrange for a Field Agent to attend the Borrower’s home or work to collect supporting documents, scan and send to head office:

  • Proof of ID
  • Proof of address
  • Proof of income
  • Proof of insurance
  • Copy of V5C Logbook

The Field Agent also undertakes a visual inspection of the vehicle. The visit is often completed in under 15 minutes

Its worth noting that a Logbook Loan agent visit can up to 90 minutes to complete the visit and will require a witness to counter sign documents. None of this is required with LoanOnYourCar.com

LoanonYourCar.com Responsible Lending Policy

As you would expect from an FCA regulated and ethical lender, LoanOnYourCar.com has a stringent process to ensure all lending is done responsibly and is affordable

In addition to a thorough affordability review, a Pre-Contract Credit Information document (SECCI) and a Borrower Information Sheet is provided for the applicant to read, review and discuss

How do I repay the loan?

At LoanOnYourCar.com we use Continuous Payment Authority, sometimes also called a ‘recurring payment’, to take an agreed amount from your bank account to repay you loan. We will ask you for the card number from which you wish us to collect your payments.

LoanOnYourCar.com will always agree the amount to be collected with you and you may choose the frequency of payments, for example, weekly/fortnightly/monthly.

We will never apply to take money from your account, or vary the amount, where you have not agreed this with us in advance.

What happens if I have difficulty making payment?

If this situation arises and you have difficulty in making payment, please contact us immediately. If we know there is an issue we can help. We will always act with forbearance and due consideration in resolving the situation. Please call us on 0333 577 5000 and choose option 2

OUR CUSTOMERS LOVE US!

WE ARE A TRUST PILOT 5 STAR LENDER, WE BELIEVE EVERY LOAN MATTERS

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