CONSUMERS who buy second-hand cars are at risk of unwittingly inheriting debts taken out by the previous owner that could end up with their vehicle being seized, Citizens Advice is warning.
The watchdog said one in five people who reported a problem to it about logbook loans ended up having their car repossessed - despite not being the one who borrowed the money. Someone taking out a logbook loan puts up their car as security.
These loans have been compared with using a pawnbroker, in that full ownership of the car is retained until the loan has been paid off.
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But Citizens Advice warned someone who buys a car that is still the subject of an outstanding logbook loan taken out by a previous owner could end up being chased for the debt.
An estimated 60,000 logbook loans are set to be taken this year, marking a 61 per cent increase on 2011. A survey by Citizens Advice of 874 drivers who had bought a second-hand car found that nearly two-thirds (63 per cent) did not check if the car had an outstanding loan.
It is calling for the law to be changed so that the car cannot be taken if the owner is not the original borrower.
Citizens Advice chief executive Gillian Guy said: "Innocent drivers should not have to bear the burden of someone else's debt."