Glossary · UK
What is Logbook Loan (Bill of Sale Loan)?
A high-cost loan secured against a vehicle the borrower already owns, where the lender holds a legal charge (bill of sale) allowing repossession without a court order if repayments are missed.
Full Definition
A logbook loan is a form of secured, high-cost credit where a borrower who already owns their car outright (or has significant equity in it) borrows against its value, using a legal document called a bill of sale to give the lender a charge over the vehicle. The borrower keeps driving the car and keeps the V5C registration document (despite the name, the lender does not literally hold the paper logbook), but the bill of sale is registered, and because it is not a regulated hire purchase agreement, the lender can in principle repossess and sell the vehicle without going to court if payments are missed -- a significantly weaker set of borrower protections than apply to hire purchase or PCP agreements bought on credit. Logbook loans are classed as high-cost credit and are regulated by the FCA, which requires affordability checks and clear disclosure of the total cost of borrowing, but consumer groups have long flagged them as a last-resort option given typical APRs often running into three figures.