Finance glossary
Logbook Loan
Also known as: Bill of sale loan
In simple terms
A logbook loan is money borrowed against your car. You hand over ownership of the vehicle to the lender (on paper) until you repay, so they can take and sell it if you fall behind.
On this page
What does logbook loan mean?
A logbook loan is a form of secured borrowing where you use your vehicle as security. It is called a logbook loan because you hand over your V5C registration document (the “logbook”), though that document is not actually proof of ownership.
In England, Wales and Northern Ireland these loans use a legal instrument called a “bill of sale”, which temporarily transfers ownership of the car to the lender while you keep using it.
How a logbook loan works
You borrow against the value of your car and repay over a set term, usually with a very high interest rate. You carry on driving the car, but the lender legally owns it until the debt is cleared.
If you miss payments, a logbook lender using a properly registered bill of sale can, in some circumstances, repossess and sell the car without going to court first — which makes these loans particularly risky.
How could this affect me?
Logbook loans are expensive and put your car directly at risk. Because the lender can sometimes repossess without a court order, the consequences of falling behind can be swift and severe.
They are best avoided if you have any alternative. If you already have one and are struggling, get free debt advice quickly — there may be more protection and better options than you expect.
Things to watch out for
- Your car can be repossessed — sometimes without a court order — if you fall behind.
- Interest rates are typically very high compared with mainstream loans.
- If you buy a car that already has a logbook loan on it, you could lose it — always check first.
- Cheaper and safer alternatives usually exist; get free advice before signing.
Know your rights
- Logbook loans are regulated consumer credit under the FCA, so you must be given pre-contract information and normally a 14-day right to withdraw.
- The lender must lend responsibly and assess whether you can afford the repayments.
- If the lender acted unfairly or lent irresponsibly, you can complain and escalate to the Financial Ombudsman Service.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Logbook loans explained (opens in a new tab). Accessed 22 Aug 2026.
- Citizens Advice, Logbook loans and bills of sale (opens in a new tab). Accessed 22 Aug 2026.