Guys

I am new to company/fleet cars, having worked abroad mainly.

I have just started with a new company and have ordered a new Elegance Superb.

Then I got this document through stating as you have gone over the car allowance you have to sign to say if you leave the company for any reason whatsoever before the 42 month lease is up you have to pay the remaining difference for the remaining life of the lease.

ie Car allowance £400 p/m extra from me to get Elegance model £100 pm

If you are laid off the same month as the new Superb is delivered you owe £4,200 straight out back to your employer.

Are all company/lease plans like this?

I have probably misread it, so have asked for clarification.

Any know how from you who have had fleet cars before would be beneficial.

Thanks

It wouldn't surprise me, after all you've committed to spending that extra money on behalf of the company.

Wow

That would be pretty ****ty, getting laid off and having to pay for a car you no longer had access to.

Kinda takes the shine off a company car don't it

Yep, I've seen those clauses before. At first it does shock a little, but then from the company's perspective it's exactly as Stu says above. The money has to come from somewhere to cover the shortfall.

Steve

This is definitely pretty standard, but in my experience the agreement states it is only applied if YOU decide to leave the company, not if you are made redundant.

As the above poster said it is pretty fair as you have exposed your employer to extra cost if you leave.

Dan

This is definitely pretty standard, but in my experience the agreement states it is only applied if YOU decide to leave the company, not if you are made redundant.

Yes I would agree with that.

My company doesn't do this, as they build in an extra element of rental across all of the leases to cover this eventuallity.

In any event, when a driver leaves the company the car can almost always be reassigned to another driver. The incentive to take on a leavers car is quite good, as the extra rental element is discounted, meaning that a driver can get a better car on less money than if they ordered new.

Bagpuss.

My company doesn't do this, as they build in an extra element of rental across all of the leases to cover this eventuallity.

In any event, when a driver leaves the company the car can almost always be reassigned to another driver. The incentive to take on a leavers car is quite good, as the extra rental element is discounted, meaning that a driver can get a better car on less money than if they ordered new.

Bagpuss.

You obviously work for an innovative and free thinking company! The company I work for doesn't even allow company car drivers to upgrade at their own expense!

My company doesn't do this, as they build in an extra element of rental across all of the leases to cover this eventuallity.

In any event, when a driver leaves the company the car can almost always be reassigned to another driver. The incentive to take on a leavers car is quite good, as the extra rental element is discounted, meaning that a driver can get a better car on less money than if they ordered new.

Bagpuss.

Bagpuss

the OP was referring to the additional cost over the allowance that the company will pay, are you referring to lease cancellation costs?

At my employer we are not allowed over the threshold but leavers cars go into the pool and are allocated to new starters...hence ironically new starters always try to bag the oldest car in the pool and therefore get a new car more quickly.

Dan

My company has a similar approach, you get an allowance and you can either trade up or down to the desired car. They let you trade up to the tune of £150 extra a month, and if the car you pick is less than the allowance then you get the difference back (less tax obviously).

If you add extras to the car, you enter into an agreement with the company that if you were to leave of your own accord before the lease term has expired, you are responsible to repay the cost for the extras for the remainder of the lease period. If you were trading up, then you would be responsible for the difference again and have to repay it. If you were made redundant, tupe'd etc then you would not be responsible for any extra cost added to the lease agreement. Of course if you were sacked, they'd nail you to the wall LOL.

If somebody leaves and the car goes into the pool, then it would be available to anybody looking for a newer car at a much reduced monthly rental as it saves the company from paying out for a new car and then paying to have cars in the pool also. Some people make an absolute saving by taking nearly new from the pool.

With my old company, if you wanted something over and above what you were entitled to, you had to pay the extra for the entire lease period up front. Again, this was to safeguard the company in case the employee left before the lease was up.

I stuck within my lease and got a 2001 2.0SE Passat! Was a good car

Bagpuss

the OP was referring to the additional cost over the allowance that the company will pay, are you referring to lease cancellation costs?

At my employer we are not allowed over the threshold but leavers cars go into the pool and are allocated to new starters...hence ironically new starters always try to bag the oldest car in the pool and therefore get a new car more quickly.

Dan

No, not referring to the early termination costs. Unless the car is in the last 6 months of it's lease, then these costs are astronomic. We would only return a car early if there is no other option.

What I'm saying is that the company expects that some drivers will exceed their monthly allowance, and builds in an additional charge across all leases (even those where the driver hasn't exceeded their allowance). The amount is actually quite small when split across 500 company car drivers, but it does mean that the company doesn't really care if someone leaves mid-lease.

In addition, the lease price of the vacant vehicle is then discounted when offered to other drivers. So, let's say a driver who is leaving has an Audi TT, which normally costs £500/month. The discounted rental will be £450/month, meaning that a driver from the car category below can afford it without having to contribute their own money.

It all works quite well, but does mean that our monthly lease prices are higher then the industry average. Our monthly allowances are adjusted somewhat to try and compensate for this, but the two don't entirely match up. This is where the company actually makes some money out of running the scheme, I would guess.

Bagpuss.

My company gives you a choice

1. take an allowance (healthy) and mileage payments (covers fuel) and supply your own vehicle but must be four doors - to allow you to transport customers.

2. Take a company provided Golf TDI and fuel card (includes personal use) but you commit to three years on it if you want one of the new ones when they are ordered. The only way you can opt out before the lease is up is if you find somebody to opt in or a new starter happens to coincide and there are no pool cars available.

Most people go with the company Golf and fuel card as its nice and easy, no maintenance or insurance charges just drive and pay the tax man. There are a few that Opt out and then buy second hand and save a few pennies - I went for a personnel lease when I got tipped that the new order of Golf's I was due for weren't as well spec'd as the one I'd had a lovely three years with.

Have to say whilst I love the BMW 1 series I have now (less so this precise second as off sick with a bad back thanks to four hours behind the wheel with its shopping trolley suspension and miniscule rear door opening I have to strain to put our 14 month old into his seat via) on balance whilst it was dull to drive that Mark IV Golf was the best car I've had.

Ours is like that, but only if you leave of your own accord. If sacked / redundant - it doesn't apply.

pauljmuk, dan123, VRStu and others have hit the nail on the head. The company won't take the risk of the increased liability you have exposed them to with the more expensive car. This is normal practice.

If you don't like the clause and possible effect then you need to re-think your choice above the given allowance.

cheers

pauljmuk, dan123, VRStu and others have hit the nail on the head. The company won't take the risk of the increased liability you have exposed them to with the more expensive car. This is normal practice.

If you don't like the clause and possible effect then you need to re-think your choice above the given allowance.

cheers

That said, normally, if a company ditches the employee..then they do not expect/demand the payment.