Assisted Car Purchase Loan Scheme
Page updated: 08/01/2024
This scheme is a Carmarthenshire Council run initiative for employees who continuously travel for purposes of employment. This scheme is to assist in the purchase of a suitable vehicle to undertake duties of employment.
About the scheme
Carmarthenshire Council will loan a maximum of £9,999 to eligible employees. The rate of interest applied to the amount loaned is 1% above the Bank of England Base Rate. Once the loan has been successfully granted repayments for the duration of the loan period will be deducted from your take home salary. This scheme is NOT a salary sacrifice scheme and therefore NO tax, NI, and pension savings are made.
Eligibility
- You must complete at least 1,000 business miles per twelve-month rolling period. This must be evidenced, please see the scheme guidance and application form.
- You need to be a permanent employee. If you are on a fixed term contract or a temporary contract, your contract of employment must be for a longer period than the proposed loan agreement (minimum of two years).
For further detailed guidance on the scheme please see the guidance notes below:
If you have any questions or would like to discuss this scheme in further detail, please contact crfinancetechnical@carmarthenshire.gov.uk.
If you meet the eligibility criteria stated above, please complete the application from below and return to crfinancetechnical@carmarthenshire.gov.uk for processing. Please refer to the checklist provided below to ensure your application is complete.
Please be aware that loans are subject to an eligibility criteria and applications must meet the full requirements as stated in the guidance notes.
Before completing the application form:
- Able to evidence a minimum of 1,000 business miles completed within the last 12 month rolling period.
- Contract of employment covers the term of the proposed loan (minimum two years).
- Loan advance (maximum £9,999) will not:
- Exceed 90% of the value of the car, OR
- Difference between the price paid for the car to be purchased and the allowance offered in part-exchange for the employees’ old car (if any).
Application form: once fully completed:
- Invoice for vehicle.
- Completed Independent Automobile Engineering certificate.
- Photocopy of applicants driving licence signed and dated by Director.
- Applicants signature.
- Applicants Director’s signature.
The following terms and conditions of the scheme will apply as agreed by the County Council.
1. Eligibility
(a) Employee must complete a minimum of 1,000 business miles per twelve month rolling period.
(b) Employee must be a permanent and paid employee. If you are on a fixed term contract or a temporary contract, your contract of employment must be for a longer period than the proposed loan agreement (minimum 2 years).
2. Advance
(a) The maximum level of advance is £9,999.00.
(b) The loan advance will not exceed 90% of the value of the car or the difference between the price paid for the car to be purchased and the allowance offered in part-exchange for the employees’ old car (if any).
(c) All second-hand vehicles must be checked for road worthiness, estimated future life and reasonableness of price by the Authority’s Vehicles Maintenance Section, AA or RAC or other independent automobile engineer. In such case a “Certificate of Suitability” will be required.
3. Repayment Period
(a) Maximum of 5 years for cars that are under 3 years old.
(b) Maximum of 4 years for any other car.
(a) and (b) are subject to the estimated future life of the car being in excess of the repayment period.
4. Early Termination/Change of Car
(a) If the employee terminates a loan early the principal outstanding on the old loan can be added to the difference between the new purchase price and the part-exchange value to establish the level of loan available.
(b) If the employee ceases to be employed by the Council or if for some other reason the employee becomes incapable of carrying out the terms of the agreement the amount outstanding will be immediately repayable in full.
(c) The employee should not dispose of the vehicle under any circumstances during the period when any balance is outstanding on the loan, without obtaining the permission of the Authority.
(d) Such permission will only be given in exceptional circumstances if there is a request to replace the car during the first 2 years of the loan period.
(e) Any employee who purchases a car by means of a car loan must undertake to keep the car available for his official use and to ensure that the vehicle is properly maintained and serviced. The
car may not be changed before the loan is repaid without the Council’s approval and this will only be given if the new car exceeds the value of the vehicle originally purchased.
5. Interest
The Annual Percentage Rate applicable shall be 1% above the Bank of England Base Rate 28 days before the Agreement date.
6. Registration and Insurance of Vehicle
(a) The vehicle must be registered in the employee’s name.
(b) The employee must maintain a comprehensive policy of insurance (inclusive of a business use provision) while there is any balance outstanding on the loan.
(c) Prior to the loan cheque being presented to the employee, the employee must produce a certificate of insurance for the vehicle which is the subject of the loan. The cheque will not be handed over until this certificate is produced.
For further information to the Council’s Assisted Car Purchase Loan Scheme please consult CRFinanceTechnical@Carmarthenshire.gov.uk
N.B.
Would all applicants please note:
From receipt of the loan application form by Technical Section - Finance there could be a minimum 5 working day turnover to receipt of the cheque.
Q. Am I eligible for the scheme?
A. To be eligible for the scheme you must meet the following requirements:
- Able to evidence that you have completed a MINIMUM of 1,000 business miles in the previous 12 months.
- Permanent employee. If you are on a fixed term contract or a temporary contract, your contract of employment must be for a longer period than the proposed loan agreement (minimum of two years).
- Your role is essential/designated car user status.
Q. How do I evidence I have completed 1,000 business miles in the previous 12 months?
A. This can be evidenced via your mileage claims within the previous12 months, you can access your mileage claims through MyView.
Q. How much loan advance would I receive?
A. The maximum loan advance available is £9,999, however the loan advance is awarded based on the following:
- Loan advance will NOT exceed 90% of the value of the car OR,
- The difference between the price paid for the car to be purchased and the allowance offered in part-exchange for your old car (if any).
Q. The car I’ve seen (loan advance required) is more than the maximum advance, more than the difference I would receive for my current car in part exchange, and I don’t have the cash funds available to fund the difference. Can I take out additional financing via another loan, hire purchase or similar financing arrangement?
A. No.
Q. How do I repay this loan?
A. This scheme is NOT a salary sacrifice scheme and therefore NO tax, NI and pension savings are made. The repayments will come
from your net pay (take home salary) each month.
Q. Over how many years can I repay this loan?
A. The loan repayment periods are:
- Maximum of 5 years for cars that are under 3 years old.
- Maximum of 4 years for any other car.
1 and 2 above are subject to the estimated future life of the car being more than the repayment period.
Q. What is the annual rate of interest applied to the loan?
A. The Annual Percentage Rate applied to the loan is 1% above the Bank of England Base Rate 28 days before the agreement date.
Q. How do I know what my repayments will be?
A. This will be calculated once you have submitted your application. If you would like to know your repayments in advance of submitting your application, please contact CRFinanceTechnical@Carmarthenshire.gov.uk.
Q. I am leaving the Council, what does this mean for my loan?
A. If you cease to be employed by the Council or if for some other reason you become incapable of carrying out the terms of the agreement the amount outstanding will be immediately repayable in full.
Q. I currently have a vehicle on the scheme, and I would like to dispose/change this vehicle.
A. You should NOT dispose/change the vehicle under any circumstances during the period when any balance is outstanding on the loan, without obtaining the permission of the Authority.
Q. Do I need to take any considerations when insuring the vehicle?
A. Yes, the vehicle must be registered in your name, and you are responsible and must maintain a comprehensive policy of insurance. This includes a business use provision while there is any balance outstanding on the loan.
Q. Who do I contact if I would like more information on the scheme?
A. All enquiries to CRFinanceTechnical@Carmarthenshire.gov.uk where a member of the team will respond accordingly.
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