What is the Bill of Sale?

Probably the most important document for a logbook loan to push through is the Bill of Sale. Basically, the bill of sale gives the lender the right of ownership to the vehicle. Once you’ve signed the document, it would state that you have sold the vehicle to the lender in exchange of a specific amount, giving the lender security should you default on the loan.

At this point, the lender technically becomes the legal owner of the said vehicle, but according to the terms and conditions of a logbook loan, the borrower can keep the vehicle provided that you meet loan repayments on time. According to the Consumer Credit Act of 1974, in the event of default, the lender must release a default notice and the borrower must comply with the terms within the specified time frame, otherwise the vehicle will be repossessed. It was also stated that the lender can enter the borrower’s premises if necessary and seize the vehicle even without court order. Any excess in the sale of the vehicle will be returned to the borrower. However, if the vehicle was sold for less than the amount owed, the borrower is also obliged to shoulder the shortfall.

It may seem that the bill of sale mostly favours the lender’s side, but it is important to know your rights as a borrower. First, it is required by law that all lenders register the bill of sale with the High Court in London, and should allow it to be open to public inspection. As a borrower, it is your obligation to check if the bill of sale complies with the Bill of Sale Amendment Act of 1882 and the Bill of Sale Act of 1878 before signing any document.

An unsigned bill of sale could mean that the borrower may be able to sell the vehicle even while there’s an outstanding loan on it. The bill of sale can be cancelled if it was signed through illegal means or if the lender has done unscrupulous acts to repossess the vehicle.