Vehicle Loan Scheme
Date: January 2015
Document summary
Summary of the loan scheme for purchasing cars and motorcycles.
Contents
Key points ............................................................................................................................ 3
1. Who is eligible? ........................................................................................................ 3
2. How much may I borrow? ........................................................................................ 3
3. What conditions apply? ............................................................................................ 3
4. How do I apply for a loan, and who approves it? ..................................................... 4
5. How is the loan payment made? .............................................................................. 5
6. Repayments and interest ......................................................................................... 5
7. What happens if the vehicle is damaged? ................................................................ 5
8. May I transfer the loan if I leave the Council? .......................................................... 5
9. Queries and disputes ............................................................................................... 6
Appendix 1 - List of Authorised Officers/Departmental Coordinators for vehicle and bicycle
loans .................................................................................................................................... 7
Appendix 2 – Table of interest rates, graduated according to CO2 emissions..................... 8
Appendix 3 – Second hand vehicle inspection form ............................................................ 9
Page 1 of 9
About this document:
Enquiries: HR Strategy Team
Version number: 01
Author:
Related information:
Personnel and Training
Telephone: 01273 481194
Bicycle loan policy
Email:
[email protected]
Season ticket loan policy
Vehicle leasing policy
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Vehicle loan policy
Key points
 You may apply for a vehicle loan between £1000 & £10,000 (For Chief Officers and
LMG Managers, the loan ceiling is £12000).
 The Council is encouraging the use of greener fuels that will attract lower interest
rates.
 Repayments will be in monthly instalments via salary deduction.
 You have to be a contracted car user to qualify for a car or motorcycle loan.
 The loan is for a vehicle up to 5 years old.
 Loan application forms are available on the Intranet/Webshop, or by contacting the
payroll department on 01825 744551
 There is a separate policy for bicycle loans, available on the Intranet/Webshop.
1. Who is eligible?
1.1. All employees classified as contracted users may apply for a loan to purchase a car
or a motorcycle. If you are unsure whether you are a contracted car user, there
should be a record of this with your Departmental Finance team.
1.2. Temporary employees, designated as contracted users, may apply for a loan
provided that the loan is repaid before their contract of employment terminates.
2. How much may I borrow?
2.1. A vehicle loan may be for any amount between £1000 and £10,000 (For Chief Officers
and LMG Managers, the loan ceiling is £12000), repayable in monthly instalments by
salary deduction.
3. What conditions apply?
3.1. Any outstanding loan for a car or motorcycle must be completed before a new loan is
granted and an existing car lease must be within one month of expiry. Loans for
bicycles may be granted in addition to outstanding loans for a motor vehicle or a
season ticket provided the overall loan ceiling does not exceed £10,000 (£12,000 for
LMG Managers and Chief Officers).
3.2. A full driving licence is required for the category of vehicle that is being purchased.
This is Category A for motorcycles and Category B for cars.
3.3. The value of any vehicle sold or offered in part exchange will be deducted from the
purchase price of the new vehicle. The employee must provide written confirmation
that they are part-exchanging, and for what value. This should ideally be evidenced on
the invoice provided for their new vehicle.
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3.4. The repayment period will not exceed the length of time an employee proposes to
keep the vehicle, and loans must be repaid within five years. If an employee is due to
retire, the repayment period must not exceed the employee’s remaining service. In the
case of unforeseen early retirement/redundancy, an arrangement may be made to
settle the outstanding loan from the lump sum retirement grant or other payment on
termination.
3.5. The vehicle must be made available for business use during the period of the loan. It
must not be disposed of before the end of the loan period unless arrangements are
made to settle the loan in full. The vehicle must be insured with comprehensive cover,
for business use.
4. How do I apply for a loan, and who approves it?
4.1. Obtain an application form for a vehicle loan from the intranet/Webshop, or by calling
the payroll department on 01825 744551.
4.2. Your line manager must initially approve your vehicle loan application, with regard to:
 Eligibility criteria including the length of your contract, if not a permanent member of
staff and contracted user status for vehicle loans.
 Suitability of the vehicle for the performance of the official duties for which it is
required.
 Evidence that the vehicle is insured.
Once your line manager has initially approved your application, it should be passed
to the relevant Departmental Coordinator for your Department, who will check the
loan application and seek final authorisation for the loan from your Authorised Officer
(see Appendix 1).
4.3. A valid VAT invoice from the supplier must be submitted with the application.
4.4. In all instances, original copies of documentation should be provided, and signed by
hand.
4.5. If purchasing a second hand vehicle, applicants must arrange a HPI check on the
vehicle, to ensure that there is no outstanding credit on the vehicle. Where there is
credit outstanding on a vehicle, loans will not be approved, so it is recommended that
this check is carried out at the earliest opportunity. A variety of providers, such as the
AA and RAC, can carry out this check, for a charge of around £20.
4.6. For second hand vehicles, the employee must also complete the vehicle inspection
form attached as Appendix 3, and arrange for a professional vehicle inspection to be
carried out in order to confirm the information provided on the form is accurate.
Again, a variety of providers can carry out this check, at a cost of around £150.
4.7. Evidence of both the HPI check and the vehicle inspection must be provided to the
payroll department before the final loan payment can be made. The employee is
ultimately responsible for choosing a provider to carry out the vehicle inspection and
HPI check, and no warranty is given by ESCC as to the roadworthiness, condition,
title or existence of outstanding finance for vehicle; these matters are the sole
responsibility of the employee.
4.8. The employee can, if they wish, have the cost of these checks added to the loan,
provided this does not take the total value of the loan over the amounts stated in
paragraph 2.1.
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4.9. When the loan application has been approved, a Legal Agreement with the Council
will be produced and requires the signature of both parties.
5. How is the loan payment made?
5.1. Payment is made directly to the employee’s bank account once the legal agreement
has been signed.
5.2. Employees should check their eligibility and read the scheme and guidance notes
carefully in order to ensure that the conditions are met.
6. Repayments and interest
6.1. A loan must be repaid in monthly instalments by salary deduction, over an agreed loan
period up to a maximum of five years, relative to the estimated life of the vehicle. In
any event, the vehicle will not be more than seven years old when the loan is repaid.
6.2. Interest in respect of the loan will be charged at a rate of interest determined in
relation to the base rate prevailing at the time of the loan. The lowest rate of interest
is pegged at the higher of either base rate or the rate of interest determined by HM
Revenue and Customs, so that the loan will not attract benefit in kind taxation.
6.3. The Council is encouraging use of “cleaner” fuels, and has graduated interest rates
according to the level of the vehicle’s CO2 emissions. Please refer to the table in
Appendix 2 at the end of this policy. Alternative fuels, such as liquid petroleum gas
(lpg) and compressed natural gas (cng) are becoming increasingly available and as
they have low emissions, will attract the lowest band of interest rates. The vendor
must provide written evidence of the CO2 emissions or the Euro Standard, preferably
on the invoice.
7. What happens if the vehicle is damaged?
7.1. If the vehicle is damaged during the loan period, the borrower must have the repairs
carried out. In the event of it being lost, stolen or written off, the outstanding amount
of the loan must be repaid to the County Council on receipt of monies from the
insurance company provided this is within the lifetime of the original loan.
7.2. If the insurance claim does not cover the total sum due, the requirement to repay still
stands and the employee should make arrangements, such as a personal loan to
repay the outstanding amount due.
7.3. Where the cost of a vehicle is refunded under any warrantee that may exist, this
should be used to repay the outstanding loan. The employee may then apply for a
new loan, should they wish to purchase a replacement vehicle or bicycle.
8. May I transfer the loan if I leave the Council?
8.1. If you leave the Council before the loan and interest is repaid, you are liable to repay
the balance of the loan together with the interest accrued to the date of termination.
8.2. If you are leaving to join another Local Authority or a related employer, such as a
college, where deductions from salary may continue, it may be possible to transfer
the outstanding loan. However, this is at the new employer’s discretion, as a new
loan agreement will be required, between the employee and the new employing
organisation. East Sussex County Council therefore cannot guarantee that such a
transfer will be possible.
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8.3. The Council reserves the right to repossess the vehicle in the event of non-payment
or failure to settle a loan.
9. Queries and disputes
9.1. It is hoped that this policy addresses all eventualities that might arise in the course of
a loan. However in the event of queries or disputes, the Council’s decision is final.
Page 6 of 9
Appendix 1 - List of Authorised Officers/Departmental Coordinators for
vehicle and bicycle loans
Authorised
Department/Organisation
Business Services
Officer
Ola Owolabi
Departmental
Coordinator
Lynn Harris
Robyn Hunter
Communities, Economy and
Transport
Rupert Clubb
Nina Tidy
Karl Taylor
Alex Benham-Wood
Children’s Services
Louise Carter
Lesley Leppard
Liz Rugg
Vicky Stanton
Fiona Wright
Amanda Watson
Adult Social Care
Keith Hinckley
Graham Pratley
Mark Stainton
Samantha Williams
Martin Hayles
Governance Services
Richard Grout
Gareth Ward
Page 7 of 9
Appendix 2 – Table of interest rates, graduated according to CO2
emissions
Vehicles
Interest rate
1 April 2011
Vehicles with VED bands A-F
(CO2 emissions up to 150g/km)
Vehicles with alternative fuels eg compressed natural
gas(cng) or liquid petroleum gas (lpg)
4%
Motorcycle up to 600cc
Vehicles with VED bands G-I
(CO2 emissions 151-185g/km)
5%
All motorcycles 600cc+
Vehicles with VED bands J plus
6%
(CO2 emissions of 186g/km+)
Page 8 of 9
Appendix 3 – Second hand vehicle inspection form
PART 1: To be completed in full by the Applicant in BLOCK CAPITALS and passed to the Line
Manager/Supervisor
Applicant’s full name
I confirm, and provide evidence of:
Make of Vehicle
Unleaded / Diesel
Model Of Vehicle
Edition (e.g. LX, Ghia
etc)
Manual or Automatic
Year of Manufacture
Registration Number
Recorded Mileage
Tax Expiry Date
Purchase Price
Repayment Period
Cubic Capacity
Date First
Registered
MOT Expiry Date
Extras Fitted
The vehicle has been professionally inspected and road tested, and found to be in
good condition
Yes
A HPI check has been carried out, and confirms there is no outstanding finance on
the vehicle
Yes
The estimated value of the vehicle is £………………….
Vendor of Vehicle
Include Name, Address and Tel Number of the contact
Details for any Warranty and Examination
applicable)
(if
PARTICULARS OF MOTOR VEHICLE OFFERED IN PART EXCHANGE, SOLD OR OWNED
DURING PRECEDING 12MONTHS. THE NOMINATED OFFICER SHOULD ENSURE THAT THIS
SECTION IS COMPLETED BY THE EMPLOYEE (IF APPLICABLE)
Make and Model
Cubic Capacity
Date First Registered
Registration Number
Page 9 of 9