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Company car

foxall1982
Posts: 1 Newbie
I have to pay an additional £89/mth towards my company car. If I hand my notice in, I am liable to pay the £89 for the remainder of the lease period. So currently that would be £3204. I have signed an agreement for this, but am wondering if there is a way out of paying it?
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foxall1982 said:I have to pay an additional £89/mth towards my company car. If I hand my notice in, I am liable to pay the £89 for the remainder of the lease period. So currently that would be £3204. I have signed an agreement for this, but am wondering if there is a way out of paying it?
Extrapolating from what you have said in your post, I assume:- You are provided with a company car.
- You were permitted to upgrade to a more expensive company car in return for agreeing to pay the extra lease costs for the whole term of the car being available. This is £89/month.
- You have £3,204 of £89 payments remaining, so 36 months.
- What was the original lease term? 4 years?
- You now plan to hand your notice in so will become exposed to the extra monthly payments landing as a lump sum.
If so, I suspect that the scope to avoid the monthly charge for the remainder of the initial lease term is very limited. It is not fair on the company that they need to pick up this cost and the company cannot really pass this on to whoever they transfer the car to (as that new employee won't want to suffer the £89 per month either).
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You'd need to read the details of the agreement. It would seem odd though to pay for something you no longer have use of though as you'd have to hand the car back when you leave.
I know our salary sacrifice scheme you just walk away from if you resign, regardless of whether you've paid for optional extras on the lease.
Can you potentially buy the car, and then sell it on if necessary, might be cheaper.0 -
Veteransaver said:It would seem odd though to pay for something you no longer have use of though as you'd have to hand the car back when you leave.0
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It will specify the penalty, if any, in your contract. I have been ‘stung’ twice over my working life both times the penalty was 6 months contributions (I left one employer part way through the contract and terminated my lease early with another following a reduction in hours so couldn’t afford it!). In my situation the cars were part of a recruitment/retention package so penalties were unavoidable.0
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foxall1982 said:I have to pay an additional £89/mth towards my company car. If I hand my notice in, I am liable to pay the £89 for the remainder of the lease period. So currently that would be £3204. I have signed an agreement for this, but am wondering if there is a way out of paying it?Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
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Veteransaver said:You'd need to read the details of the agreement. It would seem odd though to pay for something you no longer have use of though as you'd have to hand the car back when you leave.
I know our salary sacrifice scheme you just walk away from if you resign, regardless of whether you've paid for optional extras on the lease.
Can you potentially buy the car, and then sell it on if necessary, might be cheaper.
We also operate a salary sacrifice scheme, where employees are given a 'budget' for a contract hire vehicle. This is commonplace (or employees are provided a catalogue of options).
If I suggested I reallyyyyyyyy wanted an Audi A8 as my company car, the company might reasonably suggest they'd be agreeable if I paid the difference from their max budget.
If I agreed then left the company (the OP mentions handing their notice in, not being made redundant) relatively soon after (which sounds like the case, as the typical contract hire is 36 months, or 48 months), then it's totally reasonable for the employer to want the difference for the life of the lease. They can hardly charge the new employee it, nor should they pay an expensive lease on a vehicle they didn't even pick.
Regarding buying the car, if it is indeed a business contract hire vehicle as I expect, purchase is usually not possible.Know what you don't0 -
Veteransaver said:You'd need to read the details of the agreement. It would seem odd though to pay for something you no longer have use of though as you'd have to hand the car back when you leave.
It's not uncommon for contracts and agreements to include terms that you need to repay certain elements if you leave within a certain period. This can be non-compulsory training, enhanced company cars, loans for season tickets etc2
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