Company car from an employer viewpoint?

[amaze]

Hi,

One of my managers joined 10 months ago and we gave him a car allowance of £400/month. He has just asked if can swap this for a company car.

He said he thought the cost of insurance etc should be covered plus the £400, I said the max exposure to the company in all costs is £400/month. Am I right in saying this? Just don't see why we should lose out as he now wants a company car.

Also what happens if we sign up to a 3 year lease and he decides to leave next year, do we have to pay the remaining 2 years? Is there any frameworks in place to pass that liability across if gross misconduct or they decide to leave?

Thanks

 

[PERCY67]

You say he is "one" of your managers, then I don't see why he should be treated any differently, the agreement was 400 a month, thats what he accepted when he started so why does he need to change it now? and do they manage on £400?

Certainly if he kicks upa fuss before his 12 months is up, I would show him the door.

A car is a car, who ever is paying for it, so I thinks there's more to it unless he's not making anything out of it.

Sorry to be so negative, but car's (kudos status), extension of one's pennis , and staff can be a real pain in the arse.

Percy

 

[Zeno]

I agree. He made his decision and with his limited service so far I would not be falling over myself to get him one.

Bear in mind that you should not buy a car worth £400 per month. It will be £400 per month inclusive of insurance, servicing and Class 2A NI. Everything that paying for the car costs the company basically.

 

[amaze]

Hi,

Thanks for the input guys - exactly my thoughts.

What about on the liability if he leaves?

Cheers

 

[Zeno]

Hi,

Thanks for the input guys - exactly my thoughts.

What about on the liability if he leaves?

Cheers

It all depends on how you finance the car but I have never comes across a leasing agreement with terms like you describe.

It's a risk you take I am afraid and one of the reasons that companies are moving away from providing company cars.

 

[AVC]

Through most normal business contract hire channels any early redemption is calculated at approximately half the outstanding rentals of the vehicle. So if your chap decides to leave 12 months after taking a car on for 3 yrs, and there is nobody else eligible to perhaps take the car, the termination will be roughly 12 x the monthly payment.

There are many methods of finance available for business users which refelct the advantages of low emmission vehicles and benefits for the employer. Many employees are generally misguided that a monthly allowance will cover everything including insurance. However if the car is essential for the job, they are in fact better off, as is the employer, using business contract hire. Happy to quote you if necessary!!

 

[JEREMY HAWKE]

I would sack him in the morning .

Failing that though your simple answer is just a plain rental I have always done this on different vehicles I never get tied into any agreement if we no longer require a vehicle it goes back with no charge .

Contact your local Norflex office and you will be supprised just how cheap long term car rental can be

 

[Richie N]

Keep him on the car allowance, it will save you money and hassle free.

 

[Geoff T]

IMHO employee has hidden agenda, if no-one else at their level has a company car, I'd suggest avoiding setting a precedent, and say no for that reason...see what happens...

 

[AVC]

With companies that provide the choice with of car or car allowance to eligible employees, many are flexible enough that, if an employees circumstances happen to change and they do have an allowance, the car is an option for them.

If you question this individuals committment to the company in this regard, I would suggest presenting him with your thoughts as such before making any decisions.

As previously stated, there are many options available for company vehicle funding. Short term hire is an option certainly, but can be very expensive compared to a longer term option. Having said that, MINI lease is a preferred way for some. This ties you in for 28 day periods. This is favoured for short term assignments or projects where a vehicle is required for perhaps an "unknown period"

Again, happy to advise if necessary