Company car ownership scheme loan

Jaffacakekilla

I work for a large uk based utility company, and currently have a loan with the companies financial arm to pay for a car I have using a company 'car ownership scheme.

The main details of the scheme are.

I purchase a car from a list provided by the company.
They set the price of the car
They set the insurance premium for the car
They set the maintenance price for the car
They provide the finance and set the APR.

So all I do is see an amount of money on my pay slip go out to pay for the car, insurance and maintenance, and money coming from the company as their contribution to the car, and re
reimbursement for fuel at a set ppm.

So, now to the point of my thread.
My current three year deal has finished.
I would normally have had to request prices for a new car, and have signed a new agreement so that at the end of my contract, one car goes back and the new one arrives.
Unfortunately, there has been a major delay with the company that provides the cars to my company, and no one has been able to get any quotes for new car, and I have not been able to order a new car.

So, my current agreement has ran out.
I have been given the option to buy the car for the guaranteed residual amount, and run this car for work, or extend my contract at the current rate.

I do not wish to buy the car and run it, so it only leaves the extension option.

When I enquired about the price, I was told that it would be exactly the same as it was before.
The new value of the car was about £13,000, and the residual price is about £5400 less the excess mileage.

If I continue the load, they expect me to pay the full amount (for what may be up to 6 months until the car fiasco is sorted and the new car arrives), and at the end of this, the final purchase price would still be the same as it is now, some 6 months newer with considerably less miles on.

As the credit agreement has ran its full term, do I have to enter a new agreement, or can they just extend the one I have?

I would not mind extending the agreement if the payments were reduced, or due the payments not being reduced the final payment would be lower and make the purchase of the car a viable option.

Any help would be appreciated, and I apologise for the long winded thread

Jaffacakekilla

anyone have any ideas ?

lawrie28

if they have leased the car, the lease co will extend for same monthy rental, so sounds like they are doing the same.

Do you pay car tax on this scheme?

Jaffacakekilla

No, in theory the car is mine.

I claim tax relief for using my own car for work.

The bit that is confusing is that I signed a credit agreement that was calculated to last for 3 years (36 payments) now this has finished, I have no signed another one.

I do not want to pay the same for a 3 year old car as I did for a brand new one.

If it was just for a month till the new car arrived, I would put up with it, but its likely to be at least 4, maybe 5

[Deleted User]

could they supply a different car/model sooner?

Jaffacakekilla

Have now had a great deal of emails from my 'Human Resources' department, explaining that I am wrong, and that when I signed the agreement, there was a clause stating they could take up to 39 payments if required.

I tried to explain that this could not form part of the credit agreement, I had read and re-read the agreement I signed, and it stated 36 payments, the dates of each payment, and the completion date.

I was then sent copy of the form I had signed.

I explained the HR guy that the form he sent was just a payroll deduction form and in no way did it have any relevance to the credit agreement which is a legal document and covered by the consumer credit act 1974.

I don't think he liked this.

The next phone call was from someone at the credit company explaining how the agreement worked. Which was just how I explained it. She then said that agreement period had ended, but due to my new car not arriving yet, it was a gentleman's agreement that I would continue to pay the same amount for a maximum of 3 months.

I explained that I had not signed any further agreement, and that I had not had the opportunity to even order a new car yet.
I then asked about the tax implications of running a car that I did not own any longer. Instead of claiming tax relief, I would be taxed on what is realistically a contract hire car.

She told me that she would speak to their tax accountant and call me back.

The next phone call was to tell me that there could be a large problem looming if the situation were to continue for over a month or two, as normally it is 'overlooked' to avoid complications. As this looks like it may last a couple of months, they would have to try and sort a new car out for me sooner rather that later, because they did not wish to draw any unwatned attention to the scheme.

She said she would contact the scheme administrator as soon as possible to see if the could find out how many other people are in a similar situation, as it may become embarrassing.