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30 August 2015

The Law Commission is currently looking at the issue of ‘Bills of Sales’. Bills of sale are a way in which individuals can use goods they already own as security for a loan. Their use has grown dramatically, from 2,840 registered in 2001 to 52,483 in 2014. This reflects the rapid increase in the use of logbook loans.  A logbook loan is a type of sub-prime lending, where the borrower gives the lender a bill of sale on a vehicle they already own. The borrower may continue to use the vehicle so long as they keep up the repayments, but risks having it seized on default. The law on bills of sale is seriously outdated, and causes problems for borrowers, purchasers and lenders alike. Unlike hire purchase, lenders are allowed to seize vehicles without a court order, even if almost all the logbook loan has been repaid.

By Victoria Neame

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