A logbook loan is a form of secured lending and is the most common modern example of a security bill of sale. Borrowers transfer ownership of their car, van or motorcycle to the logbook lender as security for a loan. While making repayments borrowers keep possession of their vehicle and continue to use it. When the logbook loan is repaid, the borrower regains ownership of their vehicle. Borrowers hand the logbook lender the V5C registration document – or “logbook” – but this is purely symbolic and has no legal effect. If the borrower defaults, the logbook lender can seize the vehicle and look to the proceeds of sale for satisfaction of the loan. Unlike a car title loan in the United States, the logbook lender can, under English law, seize the vehicle without a court order.
In England and Wales, logbook loan advances are directed by the Bills of Sale Act 1878 and Bills of Sale Act (1878) Amendment Act 1882. Logbook credits and the Bills of Sale Acts have been liable to much feedback. In 2009, a conference by the Department for Business, Innovation and Skills analyzed the Bills of Sale Acts and suggested that bills of offer for customer loaning, for example, logbook credits, ought to be banned. The administration’s reaction to the discussion was distributed in 2011. The reaction left the Bills of Sale Acts in place and prompted the presentation of a willful code of practice for logbook lenders.
In 2014, the Bills of Sale Acts were at the end of the day analyzed, this time by the Law Commission for England and Wales. The Law Commission distributed its conference paper on 9 September 2015.