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CAR LOANS Car loans 1  

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					Car loans
1.    2.    Who is eligible for a car loan?

Loans may be authorised for employees who: have essential car user status; or have casual car user status, travelling more than 1801 miles a year on county council business; and have not taken out a similar loan in the last 2 years. What terms apply to car loans? The maximum amount that can be loaned is £12,000; any money received from the sale or part exchange etc of an existing car will be deducted from the loan; repayment of loans must be completed;    5 years from the date of the agreement; or 6 years from the date on which the car was first registered, whichever is the earlier.

Repayments will be deducted from the employee’s salary; loans require a guarantee bond which is an additional charge to the loan itself; and the terms of the loan may be varied in certain circumstances, e.g. redundancy, maternity leave.

Interest rates The interest rates may vary from time to time. Details are available on request. Employees cannot claim relief on loans if they are eligible to join the county council car leasing scheme, but have chosen not to do so. An interest free element to the loan will only apply to an employee who:   3. was designated as an essential car user before 1 May 1984, and has not received a new contract of employment since then How does an employee apply for a car loan?

If you think this applies please speak to Human Resources.

Employees need to get an application form from Human Resources. They need to complete and return this together with:  an engineers report (unless the car is new). This must be obtained from one of the following: Serco Contracting, N’pton; AA; RAC or Automobile Buyers Service, Bletchley. The employee will have to meet the cost of the

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report. Any necessary repairs to make the car roadworthy must be rectified by the seller, before the money will be advanced.; and  a comprehensive insurance certificate which covers use for business purposes.

This will be sent to the Corporate Director/Assistant Chief Executive, or their nominated representative, for approval. Once approval has been given, Human resources will draw up a credit agreement which the employee must check and sign. A cheque, made payable to the supplier (UK only), will be issued approx. 2 weeks later. (A manual cheque can be written but this would be at a cost to the employee - details on request). It is essential that employees do not enter into any financial commitment on the assumption that a loan will be given. They must wait until they have received confirmation from Human Resources. 4. What are the employee’s responsibilities once the purchase has been made? The employee should:    maintain the car in a roadworthy condition; not sell the car without written authority from the Head of Strategic Finance; in the event of a “write off” following a theft or an accident, repay money received from the insurance company up to the cost of the outstanding debt; and repay any outstanding balance should they leave the county council.

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5. Can an employee change the car but keep the existing agreement? Yes, provided that they put their request in writing to their Corporate Director/Assistant Chief Executive or nominated representative. They should give details of the new car, including its registration number. If approval is given, copies of the relevant correspondence will then be kept with the credit agreement. 6. Transferring a loan from another local authority

New employees who already have a car loan with another local authority may apply to transfer the loan to us by completing an application form. These forms are available from Human Resources. The same criteria will apply as for second hand vehicles, but a vehicle examination report is not required. 7. Termination of employment on the grounds of redundancy, illhealth, or in the efficiency of the service Where an employee is made redundant, a revised agreement may be drawn up rescheduling the outstanding amount over a 2-year period, commencing with the effective date of redundancy or ill-health retirement, or permission may be granted to sell the car in order to settle the debt. 8. Maternity Leave

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In cases of maternity leave it may be possible to cancel payments for 4 months, and either:   continue payments at an adjusted higher figure; or extend the loan by 4 months (depending on the age of the car at the end of the agreement).

The extra interest incurred under either option will be included in the figures.

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