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At a glance: Find out your options if you have secured a loan against your car or other goods.
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This summary covers England and Wales
To view information that covers Scotland, please click here.

What is a bill of sale?

A bill of sale is a legal document that records a transfer of the ownership of something you own. A bill of sale uses a car or something else as security for a loan. If it is a car that’s used it is sometimes called a log book loan.  

If you have a bill of sale the lender lends you money and owns the car or other goods until you have paid off the loan. You can still use the goods, even though the lender owns them. When you have paid back the loan ownership reverts to you.

Before taking out a bill of sale

The lender should give you an information sheet about: 

  • what a bill of sale is 
  • how you can expect the lender to behave  
  • your responsibilities. 

This will help you understand the agreement before you proceed.

CCTA code of practice

Most lenders who offer bill of sale agreements are members of the Consumer Credit Trade Association (CCTA). The CCTA has a code of practice covering bills of sale. Members of the CCTA should follow these rules. This includes making sure that:  

  • you can afford the agreement  
  • you understand the risks involved.

Missed payments

If you take out a bill of sale and miss payments, the lender might repossess the goods and sell them. The lender does not have to go to court to do this.

Ending the agreement yourself

If you are up to date with the agreement and the lender is a CCTA member, you may be able to hand the goods back and not owe any more money. To do this the goods must be in reasonable condition.

When can a lender take and sell the goods?

A lender may take the goods and sell them if you do not keep up with agreed payments. Before they do that, they must send you a default notice. This gives you 14 days to make up any missing payments. If you do not make up the payments in that time the lender can then take and sell the goods. They must wait at least five days before doing this (or 14 if they are a member of the CCTA).  

The  CCTA code of practice states members should be supportive if you are in financial difficulties.  It is likely the creditor will want at least the contractual monthly payment, but they may agree to a lower amount if its reasonable.  You can fill in a budget sheet via the Digital Advice Tool or you can call us for help.

Learn more about this topic

If you want to learn more about this topic, you can read our in-depth guide.

Read in-depth-guide

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