Logbook Loans Unaffordable Lending Claims
A logbook loan is a high-cost unsecured loan secured against the borrower’s vehicle — typically a car, but sometimes a van, motorcycle or other motor vehicle. The lender uses a “bill of sale” to take temporary ownership of the vehicle as security, while the borrower retains use of it. Logbook loans are a small but persistent part of the UK consumer credit market, with APRs that often run into the hundreds of percent. Like other forms of high-cost credit, they are subject to the FCA’s affordability rules, and unaffordable logbook lending can be challenged.
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How logbook loans work
Logbook loans are secured against the V5 vehicle registration document — hence the name. The mechanics:
- The borrower hands over the V5 logbook to the lender during the loan term.
- The lender registers a bill of sale with the High Court.
- The borrower keeps using the vehicle, with responsibility for tax, MOT and insurance.
- Loan amounts typically range from £500 to £25,000, depending on the vehicle’s value and the lender. Most lenders cap loans at around 70-75% of the vehicle’s market value.
- Terms range from 12 months up to 60 months.
- APRs are commonly in the hundreds of percent; weekly or monthly repayment options.
- If the borrower defaults, the lender has the right to repossess the vehicle, although the rules around enforcement have been tightened since 2017.
Where logbook loans are legal
Bills of sale are legal in England, Wales and Northern Ireland. They are not enforceable in Scotland, where lenders have to use alternative arrangements such as hire-purchase or conditional sale agreements (which carry the protections of the Consumer Credit Act 1974). For most affordability complaint purposes, the FCA’s framework applies UK-wide regardless of how the security is structured.
The market today
The logbook loan market peaked in the mid-2010s — Citizens Advice and government data identified more than 49,000 bills of sale registered with the courts in 2013 alone. Tightened FCA regulation since 2017 has shrunk the market substantially. The lenders still active are mostly small specialist firms, often part of broader subprime motor finance groups.
Why logbook complaints succeed
The Financial Ombudsman has upheld a steady stream of logbook loan complaints. Common patterns:
- Affordability checks weren’t proportionate to the cost — high-APR, multi-year secured loans demand serious affordability scrutiny, which logbook lenders often skipped.
- The vehicle was over-valued — inflated valuations led to loan sizes that exceeded the borrower’s sustainable repayment capacity.
- Refinancing and rollovers — borrowers in difficulty were sometimes offered fresh logbook loans against the same vehicle, extending the cycle.
- Vulnerability and emergency borrowing — the speed and accessibility of logbook loans (cash within hours) attracted borrowers in acute financial distress whose vulnerability should have triggered more cautious assessment.
- Repossession threats and enforcement — historic complaints have included aggressive repossession before the 2017 court-order requirement was clarified for cars more than one-third paid off.
Lenders we cover
- Logbook Money
- Mobile Money — one of the original UK logbook lenders, in the market since 1998.
- Car Cash Point — currently active, FCA-authorised under FRN 670218, also operates Varooma branding.
- Loans 2 Go — operates logbook lending alongside personal short-term loans.
- Varooma — operated by the same group as Car Cash Point.
- Auto Advance
How a claim works
For active logbook lenders, the standard process applies — complaint to the lender, eight-week response window, escalation to FOS if needed. The complaint can address:
- Whether the original affordability check was reasonable and proportionate.
- Whether the vehicle valuation supported the loan size.
- Whether refinancing or top-ups were assessed afresh.
- Whether enforcement (where it occurred) followed proper notice procedures.
How a claim works step by step. For redress calculation, see How redress is calculated.
Cross-link with car finance
Logbook loans are technically a different product from regulated car finance hire-purchase agreements. Car finance affordability claims (including the broader undisclosed-commission issues currently in litigation) follow a separate framework. If you took out a logbook loan, the affordability complaint runs through the unsecured-credit framework above. If you took out hire-purchase or PCP on a vehicle, that is a different category.
Related guides
- What is unaffordable lending?
- The CONC rules on affordability
- What affordability checks should a lender carry out?
- How the Financial Ombudsman handles unaffordable lending complaints
- Do I have an unaffordable lending claim?
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