Let’s face it. We live in a world laden with dishonest people. People are always ripping each other off. Many are the times we go for a great financial or insurance product only to find out that there are hidden charges. We buy land privately only to find out that there is a charge attached to it. In other words, the level of dishonesty in the world has reached fever pitch. So how do you ensure you don’t buy a second car with an existing logbook loan?
To the clueless, a logbook loan is a loan whereby your car is used as security. Once you purpose to take this kind of loan, you sign a bill of sale agreement that temporarily makes your lender the car owner until you pay off your loan. This kind of loan is processed pretty fast and no credit checks are made. The drawback is the fact that it is very costly as compared to conventional loans.
That notwithstanding, people who buy cars privately occasionally find out that they are not the legal owners of the cars they buy due to a logbook loan attached to the car. People who buy second hand cars privately are increasingly being stunned by the revelation that the car has an outstanding old logbook loan that needs to be cleared.
The loan company in this case has the right to reposes the car regardless of who might think is the legal owner. The psychological trauma as well as financial loss in this regard cannot be explained. So how do you avoid the risk of buying a car with an existing logbook loan?
Before buying any second hand car, you need to carry out a HPI check. This check provides valuable information on the financial history of a car and hence ensures that you are sure of what you are getting into when purchasing the car. Considering the fact that HPI checks have routinely determined that 1 in 4 cars have a murky financial past, it’s better to be safe than sorry. Cushion yourself against the risk of losing the car you just bought secondhand because of an existing logbook loan by carrying out HPI checks!