Car Loan conditions

By April Robinson,2014-05-15 13:43
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Car Loan conditions




    1. Eligibility

     The following category of Officers shall be eligible to participate in the Scheme.

     Essential Users

     Those Officers who, in terms of their appointment, have to provide a car for the performance of their

    duties will be entitled to participate in the Scheme.

     In the event of the application being approved by the applicant’s Head of Service and being opposed by

    the Chief Executive and/or Director of Finance, the application will be referred to the Personnel

    Services Committee for determination.

    2. Loan Amount

2.1 The financial assistance shall be in the form of a loan relative to the car which must be provided for the

    performance of the Officers duties, and no other car. The amount of the loan will be the net purchase

    price of the car (as determined by paragraph 5.1 below) or ?6000 whichever is less.

2.2 The maximum repayment period of the loan will be 4 years.

2.3 Loans will only be awarded to Officers for the outright purchase of suitable car.

3. Interest

3.1 Interest will be charged at a rate determined by the N.J.C. Conditions, currently 4.45% per annum, on

    the full amount of the loan for each year of the period of the loan. In the event of the loan period being

    reduced the interest will fall to be reassessed, such interest to be recalculated in the reducing balance

    basis at the agreed rate (currently 8.9%) per annum on each half yearly balance of the outstanding loan.

    4. Repayment

4.1 The Council shall arrange for repayment of loan and interest by instalment, deducted from the Officers

    salary over such a period as it may approve, but subject to a maximum period of four years.

4.2 If the Officers contract of employment is terminated, either by the Council or the Officer, before

    repayment of the loan, with accrued interest, the Officer shall be required to repay the balance of the

    loan, with accrued interest forthwith. The Officers final salary will not be released until all monies due

    in respect of any car loan has been repaid.

4.3 In the event of death of the Officer, any balance of loan with accrued interest shall be repayable to the

    Council by the legal representatives of the Officer and any salary, gratuity or allowance due by the

    Council to the legal representatives of the Officer may be retained by the Council and applied towards

    the repayment of the loan and accrued interest.

    4.4. The Officer shall be entitled to make supplementary cash contributions towards the discharge of the


    4.5 Upon repayment in full of the loan granted the Officers liability under the scheme shall be deemed to

    have terminated.

5. Conditions

    5.1 A loan granted under these provisions shall be subject to the deduction from the purchase price of the

    car of -

     (a) any allowance for the value of a car offered in part exchange for the car to be acquired;


     (b) the selling price of any car which the Officer has disposed of, otherwise than by part

     exchange, during the preceding twelve months; or

     (c) any amount received under a motor insurance policy for a car owned by the Officer,

     which is totally written off during the preceding twelve months; or

     (d) value of any vehicle owned and being retained by the Officer

    5.2 The Council reserve the right to request that any application for a loan in respect of a used car shall be

    accompanied by a certificate by a qualified automobile engineer as to -

     (a) the reasonableness of the price,

     (b) the road-worthiness, and

     (c) the estimated future life of the vehicle

     and also by a certificate by the Director of the Service concerned that the vehicle is suitable for the

    purposes of The Highland Council.

    5.3. The Officer shall be required to enter into a form of agreement with, and grant a Personal Bond in

    favour of the authority for the due repayment of the loan and to declare that he has not entered into a

    hire purchase agreement in respect of the car and will not do so.

5.4 Within 28 days of receipt of the sum advanced the Officer, being granted a loan, MUST produce to the

    Director of Finance (Travel Section) the following documents:

     (a) Receipt of purchase

     (b) Evidence of any relevant trade-in allowance

     (c) Registration document

     (d) Current insurance certificate of vehicle

     Failure to comply with the above requirement will result in disciplinary action against the employee


5.5 During the period of repayment of the loan the Officer shall undertake to maintain a comprehensive

    insurance policy in respect of the car with a Company acceptable to the Council and in which the

    Council’s interest is endorsed. A copy of each years renewal certificate must be forwarded to the

    Director of Finance (Travel Section) within one month of the renewal date.

5.6 During the currency of the loan, the car will be maintained in road worthy conditions to the satisfaction

    of the Council. The Officer will be required to meet the whole cost of maintenance, running expenses,

    insurance and road fund licence and to exhibit to the Director of Finance any Ministry of Transport

    Test Certificate issued in respect of the car within seven days of the date of issue of such certificate. If

    at any time during the period of the loan the car is damaged or destroyed the Officer will take all

    reasonable steps to have the car immediately repaired or replaced - the type of car to be purchased as a

    replacement having first been approved by the Council.

5.7 During the currency of the loan any change of name and/or address must be notified immediately to the

    Director of Finance (Travel Section) to whom any queries regarding this scheme should be addressed.

5.8 The Officer shall not dispose of the car without prior consent of the Chief Executive and Director of

    Finance acting on behalf of the Council and in the event of the car being damaged or destroyed they

    shall, if called upon to do so, assign the claim against the insurers under the comprehensive motor

    policy, to the Council for the purpose of repayment of the amount of the loan outstanding.

5.9 In the event of the Officer failing to observe the conditions of the scheme, the Council shall have the

    full right to dispose of the car and to pay to the Officer the proceeds of the sale after deduction of the

    amount of the loan outstanding and any expenses incurred by the Council in selling the car. In the

    event of the proceeds of the sale of the car being insufficient to meet the amount of the loan outstanding

    and expenses incurred by the Council of selling the car, the Officer will pay forthwith to the Council the

    amount by which the proceeds of the sale falls short of the amount of the loan outstanding and the

    amount of expenses referred to.

5.10 In the event of any dispute arising as to the interpretation of this scheme or any part thereof during the

    currency of the loan such dispute shall be referred for decision to an arbiter to be mutually agreed by

    the Officer and the Council and failing agreement to be appointed by the Sheriff of Grampian,

    Highlands and Islands at Inverness, and whose decision shall be final.


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