AN INCREASING number of Wyre Forest motorists are facing a shock when they buy a new car – and find they have also been landed with a “log book loan” debt.

Wyre Forest Citizens Advice Bureau (CAB) is warning local people to watch out for the trap and make sure that the person they are buying a vehicle from can produce the registration document.

More people in financial straits are turning to log book loans so they can borrow money against the value of their vehicles.

The loans are secured on the vehicle, which is then owned by the lender until the debt is paid back.

Kate Bennett, manager of Wyre Forest CAB, said: “You can use your vehicle if you keep repaying the loan but first you will be asked to hand over your vehicle’s log book – or registration document – which proves you are the registered keeper.

“Being the registered keeper does not mean you own the car and, as the lender owns the car and has the documents, they can change the registered keeper if you do not pay.”

Mrs Bennett said people with money problems were finding it attractive to go to log book loan companies because they could continue to use their car while paying the debt off.

But some people are falling innocent victims to borrowers who then sell their vehicles without revealing they are under a loan agreement.

Mrs Bennett said: “Never buy a vehicle unless the seller can produce the registration document.

“They may come up with an excuse, such as they’ve moved house and can’t find the document or it’s in the post.

“By then you’ve fallen in love with the car, think it’s a bargain and just go along with it – but then you can have a shock when you try to register with the DVLA or when the log book loan company turns up to repossess the vehicle.

“Essentially, you’ve bought the debt along with the car and could end up owing more than you’ve paid for it.”

Mrs Bennett recommended prospective car purchasers to quiz the seller first to make sure the vehicle is not subject to a log book loan.

Normal pre-purchase checks, including whether a vehicle is under a hire purchase agreement or been involved in an accident, will not show up log book loans.

This is because the law will recognise the “bill of sale” that would go with a credit agreement only if it had been registered with the High Court.

And most log book lenders will not have registered the agreements with the High Court.

Mrs Bennett said that, while the CAB could help to sort out the problem if someone had bought a car under a log book loan, purchasers went through an “awful lot of stress” first as they realised they were faced with a debt which had nothing to do with them.