How can I reduce my liability for my car finance shortfall

[Rufus & Lola]

As part of my previous employer's car scheme, I was required to enter into a personal finance arrangement to purchase a car with their selected provider. The interest rate was much worse than that if you walked into a garage as a private purchaser.

 

The worst happened, and my employer sacked me. They have since agreed that it was unfair, and they made a final settlement of £1,000 for any finance shortfall on the car.

 

The car was sold by the finance company at auction for a shockingly low figure (under the terms of the scheme, I could not sell it myself), which means that after the ETI is applied I still owe a shortfall of almost £4,000.

 

I am still unemployed, and have absolutely no way to pay this. My previous employer won't assist at all. Any ideas on how I can sort this out?

[raydetinu]

By personnal finance arrangement do you mean HP or lease?

Why did you accept such an arrangement? normally most employers that require you to have a car would give you a taxable car allowance from which you can purchase your own car. is this what they did.

How far into the agreement did you hand the car back or did they take it.

[Rufus & Lola]

Under the terms of the scheme, I had to enter into a personal HP agreement with their selected provider, and they paid me a monthly amount towards my HP payments - I think it was supposed to be more tax efficient.

Anyway, I was less than a year into a 4 year HP contract when I was sacked. I was not paid any further contribution toward my car, and without a job had no way of paying the monthly HP cost, so I handed the car back under the terms of the scheme.

They sold the car, and I am left owing a shortfall to the finance company. As the HP agreement is personal to me, I realise that it is my debt, but as I am still unemployed I am really worried about how the HP company might behave toward me.

This is not an agreement I would have entered into unless the company policies had required it, and the company unfairly dismissed me - but I am still left in this terrible position.

I agreed a final settlement with my company and they offered £1,000 toward any shortfall which I accepted because i thought that it would be enough - but the shortfall is very nearly £4,000.

How do HP companies behave in these circumstances - are they likely to agree some sort of payment plan, or just take me right to court? I'm panicked, as I'm worried that if I'm taken to court it might affect my ability to get a new job.

[tofwig]

why on earth would you do this for your job?

[raydetinu]

I pressume the choice of car and arrangement was up to you, so you could of got any car as long as it was a runner.

I had a similar arangement but already had my own car, but they still paid me £4000/year for its use and upkeep.

You were not forced into paying any set amoount, you could of kept your costs down.

[Rufus & Lola]

Yes the make of car was up to me, but it had to be purchased through the company's selected provider, and financed through their selected provider. I couldn't just use my own (even though I already had one), as it was not a cash alternative scheme, and they wouldn't offer this because I did ask.

 

In retrospect it was a really raw deal - but everyone else signed up for it too - we are talking hundreds of staff, so I didn't really have any way to argue.

[raydetinu]

It would appear to me that they had some financial gain to use a car provider and a finance house ( cut or refferal fee ). If this was a condition of your employment and contained somewhere in your contract, there must be section on what happens if your employment is terminated, if not I would seek legal advice, as this seems grossly unfair.

[Rufus & Lola]

I hoped that I would not have to spend money on doing that, but I think you're right. Thx for the replies.