POLICY FOR THE LEASE CAR SCHEME

Transcription

1 POLICY FOR THE LEASE CAR SCHEME Reference number: Finance 004 Title: Policy for the Lease Car Scheme Version number: Version 1, Draft 1 Policy Approved by: Corporate Management Team Date of Approval: 22 nd March 2010 Date Issued: 24 th March 2010 Review Date: September 2011 Document Author: Pratish Parmar, Commissioning Accountant Director: Sue Bishop, Director of Finance

2 Version Control and Summary of Changes Version number Version 1, Draft 1 Version 1 Draft 1 Version 1 Draft 1 Date December 2009 January 2010 February 2010 Comments (description change and amendments) Policy produced by Leicestershire Partnership Trust on behalf of the Facilities Consortium. Comments received from NHS Leicester City s Quality Directorate to ensure this policy meets the requirements of the Policy for the Development, Review, Approval and Management of Polices, Procedures, Strategies and Guidelines (October 2008). Initial Equality Impact Assessment by Leicestershire Partnership NHS Trust on behalf of the Facilities Consortium. Full review of the policy, which was coordinated by Steve Sibley (Commercial Manager of the Leicester, Leicestershire and Rutland Facilities Consortium). Membership includes: NHS Leicester City (NHS LC) NHS Leicestershire County & Rutland (NHS LCR) Leicestershire Partnership Trust (LPT) Comments received during consultation from: All members of the Consortium and their Finance colleagues Total Contract Management (TCM) Internal Audit Colleagues from Leicester City Community Health Services (LCCHS) Finance & Human Resources departments. Policy presented to LCCHS s Joint Staff Consultative Committee on 19 th January Policy presented to NHS LC s Joint Staff Consultative Committee on 25 th February Version 1, Draft 1 March 2010 Policy presented to and approved by NHS Leicester City s Corporate Management Team on 22 nd March Policy updated to include full version control and summary of changes. Policy disseminated across NHS LC and LCCHS via the Intranet. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 2 of 34

3 Contents Page 1. Introduction 5 2. Eligibility 5 3. Definitions 5 4. Duration of the Scheme 6 5. Nature of the Scheme 6 6. Reimbursement of Fuel for Business Use 7 TERMS AND CONDITIONS: 7. Hire 8 8. Payment 8 9. Hirer s Obligation Exclusion of Liability Income Tax Position Fuel Benefit Tax Mileage Calculation and Reimbursement Business Mileage Journeys from Home Private Mileage Home to Base Mileage Excess Travel (Home to Base Mileage) Study Leave Mileage Record 13 COSTS BORNE BY THE EMPLOYEE: 21. Monthly Rental Variation to Charges Contract Terms Use of Car Accessories Maintenance and Repair Employee Responsibilities Insurance Requirements Accident Damage 23 Policy for the Lease Cars Scheme Version 1, Draft 1 Page 3 of 34

4 Page EARLY TERMINATION OF THE CONTRACT: 30. Costs Borne by the Trust Costs Borne by the Employee 24 AT THE END OF THE CONTRACT PERIOD: 32. Action to be taken (including Extension of Lease Car Contract) Purchase of a Hire Car Title to the Vehicle General Communications Your Right to Cancel Cancellation Form 32 Appendices: Appendix 1: Initial Equality Impact Assessment Tool - Leicestershire Partnership NHS Trust. 33 Policy for the Lease Cars Scheme Version 1, Draft 1 Page 4 of 34

5 1. INTRODUCTION The scheme shall be known as the NHS Leicester City Car Scheme hereafter referred to as the scheme. 2. ELIGIBILITY 2.1 The scheme supersedes all previous schemes, which were in place prior to 1 April All new cars provided after 1 April 2010 are subject to the terms and conditions contained herein? 2.2 The purpose of the scheme is to provide access to transport for employees who are required to be mobile and where it is in the interest of the Trust to do so. In this respect the opportunity to participate in the lease car scheme will be offered to all new and existing employees who are eligible and are required to travel on Trust business. 2.3 All other employees of the Trust are invited to apply to join the scheme. However, entry will be at the discretion of the Trust and all costs will be borne by the individual. 3. DEFINITIONS Scheme The Trust The Hirer Line Manager Budget Holder Scheme Manager shall mean the lease car scheme shall mean the Leicestershire Partnership NHS Trust shall mean an employee of the Trust entering into this agreement shall mean the employees direct supervisor who would sign mileage returns shall mean the senior manager accountable for financial expenditure shall mean the management team selected by tender. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 5 of 34

6 4. DURATION OF THE SCHEME 4.1 Entry to the scheme will be voluntary, however, an employee who decides to enter the scheme will sign an undertaking with the Trust to participate in the scheme for a period of three years, or any such other period that is agreed. Note The scheme will place a three-year, or any other such period, financial commitment on employees, and employees should study carefully all the conditions contained in this document before applying to join. Employees signing the lease car-leasing document (hereafter referred to as the Agreement ) will be deemed to have entered into a binding legal agreement. 4.2 The scheme is based on a binding contract between the NHS Leicester City (hereinafter referred to as the Trust ) and a specific named person (hereinafter referred to as the Employee ). 5. THE NATURE OF THE SCHEME 5.1 Under the scheme the Trust shall arrange through a contract hire company for the employee to be provided with a motor vehicle as specified which will be taxed and fully maintained by the contract hire company. In addition, full comprehensive insurance cover will be arranged on behalf of the employee. The employee has a free choice of car provided that it is suitable for the business requirement. Due to the diverse nature of the work activities of the Trust s employees it is not appropriate to specify a car type. However the Trust reserves the right to reject an applicant s selection if it is considered inappropriate for business usage. 5.2 The employee is required, as a condition of the cars being made available for their private use, to pay (an amount of money) for the private use of the car. The monthly payment will be determined by the Trust at the beginning of the agreement. On signing the agreement to enter the car hire scheme the employee will voluntarily and permanently forego entitlement to NHS Travel Allowances for the duration of the Policy for the Lease Cars Scheme Version 1, Draft 1 Page 6 of 34

7 agreement. 5.3 The calculation of the rental for the private use is based on an allowance that is determined by the business mileage undertaken by the employee designated by the Trust. The allowances are arranged in mileage bands and are based on averaging principles. 5.4 The Trust reserves the right to change the scheme at any time. In such circumstances, however, existing users lease contracts would be allowed to continue until their conclusion. 5.5 All eligible staff, as defined in paragraph above, will be designated a mileage band allowance, based on the estimated annual business mileage agreed by the employee s line manager. The mileage allowance will be subtracted from the total annual cost of the selected car and the resulting balance will be the charge to the employee for the private use of the car. VAT on private usage will be charged at the standard rate prevailing at the time. The private use rental charge will be adjusted for any variations between the estimated and actual mileages. 6. REIMBURSEMENT OF FUEL FOR BUSINESS USE 6.1 Staff will be required to refuel their lease cars and submit monthly returns showing business, private, excess mileage and home to base mileage, where appropriate on the mileage claim form available on Scheme manager web page. 6.2 Staff who travel on official Trust business will receive a fuel allowance for all business mileage based on the agreed lease car mileage rate. This will be reviewed annually with consultation using Inland Revenue guidance. The fuel allowance is intended to do no more than cover the costs necessarily incurred in the performance of official duties and does not cover fuel for private use. 6.3 The fuel allowance will be paid through salary and is based on the mileage quoted in the schedule. The employee will not receive any Policy for the Lease Cars Scheme Version 1, Draft 1 Page 7 of 34

8 other travel allowances. 6.4 Repeated failure to submit mileage returns may result in the fuel allowance being reduced or removed. This will have an effect on the employee s Income Tax and Value Added Tax. 6.5 Repeated failure to submit mileage claims could also increase the monthly rental costs as all non reported mileage is treated as private mileage and the costs of this are the responsibility of the driver. TERMS AND CONDITIONS 7. HIRE 7.1 The Trust has agreed to hire out and the Hirer shall take the vehicle described in the Schedule. The word Vehicle shall include all and any replacements of component parts and all additions and accessories in any way affixed to the Vehicle during the subsistence of this Agreement subject to the terms and conditions set out in this Agreement, including the Schedule, for the Period of Hire and at the Rental stated in the Schedule. The word Schedule refers to the Acceptance form of the vehicle. 7.2 The Hirer is an employee of the Trust and desires to hire a Vehicle for use in the performance of his/her duties and/or for Social, Domestic and Pleasure purposes. The Hirer acknowledges that he/she has selected the Vehicle and that the Trust has entered into a Lease Hire Agreement with the Leasing Company for the purposes of this Agreement at the request of the Hirer. A copy of the Leasing Company agreement will be made available on request. 8. PAYMENT 8.1 The Hirer authorises the Trust to deduct the Rental and any other amounts that may be due or become due under any part of this Agreement from their salary, any remuneration and/or superannuation benefits due to the Hirer from the Trust. These will include but not be Policy for the Lease Cars Scheme Version 1, Draft 1 Page 8 of 34

9 restricted to the following:- a) Monthly Hire Payment b) Any excess mileage charge and any charges resulting from excess wear and tear at the end of the contract or on termination if sooner. c) Any payment for fixed penalty fines or any other costs for motoring offences charged to the Trust. d) Any other charges imposed by the supplier that may be attributed to the employee. e) Any insurance excess charges imposed that may be attributed to the employee. f) Any increase in the annual cost of Road Fund Licence. g) Any reclaim as a result of over payment of fuel allowances. 9. HIRER S OBLIGATION 9.1 The Hirer shall pay the Rentals and Excess Mileage Charge (if any) specified in the Schedule and all other monies falling due under the terms of this Agreement punctually at the times specified in the Schedule or elsewhere in this Agreement or at such other times as the Trust may notify to the hirer. Any such payment must include the appropriate amount of VAT on it. The rentals shall be paid without demand and payments shall be made in accordance with the provisions of Clause Throughout the period of Hire, the Hirer agrees that they will not use or cause the Vehicle to be used in any way, which may result in the breach of any of the covenants, restrictions and any stipulations contained in this Agreement. 10. EXCLUSION OF LIABILITY 10.1 Except in respect of death or personal injury arising as a result of the negligence of the Trust or its employees (other than the Hirer) the Trust shall not be liable for any damage, loss, and charges of expenses arising out of or in consequence of the use of or any accident involving Policy for the Lease Cars Scheme Version 1, Draft 1 Page 9 of 34

10 the Vehicle The Hirer hereby undertakes to indemnify and keep indemnified the Trust and the Leasing Company from any liability arising from death or personal injury or damage to or theft or loss of property caused by or to the Vehicle, unless such death, injury or damage is caused by the negligence of the Trust or the Leasing Company (as appropriate) or his/her respective employees (except the Hirer) or agents. 11. INCOME TAX POSITION 11.1 Employees who are allowed the private use of a lease car are deemed to be receiving a benefit in kind. Income tax will be charged at the applicable rate based on regulations in use at the time. The Scheme manager will inform the driver of changes. 12. FUEL BENEFIT TAX 12.1 Payment made to employees for fuel, for business use only, is at a rate that reflects only the costs of fuel for business mileage. No benefit by way of fuel or payment of it will accrue to employees in respect of his/her private motoring. In consequence fuel benefit tax will not apply. 13. MILEAGE CALCULATION AND REIMBURSEMENT 13.1 The total contract mileage will be the estimates for the full contract period and will comprise of:- a) Business mileage b) Private mileage c) Home to Base mileage d) Excess mileage (due to relocation). Policy for the Lease Cars Scheme Version 1, Draft 1 Page 10 of 34

11 14. BUSINESS MILEAGE 14.1 Business mileage will be calculated by the employee s Line Manager and agreed by a Budget Holder authorised to sign the application form. The level of business mileage will remain the responsibility of the Line Manager. The employee will not be liable for any increased lease costs or excess mileage charges resulting from any changes to the business mileage unless the changes are attributable to the employee s actions not endorsed by the line manager. The Trust may also recover costs from employees who wilfully or through negligence, significantly exceed his/her original estimated business mileage and fails to notify the Trust in a reasonable time to enable a recalculation of contributions to be made. 15. JOURNEYS FROM HOME 15.1 If an employee drives direct from home to perform duties somewhere other than the normal place of work (for example, at a third party location) the HM Customs and Excise states that the business mileage from this journey will be deemed as the shorter of either:- a) The distance actually travelled. b) The distance between the third party location and the normal place of work. 16. PRIVATE MILEAGE 16.1 Employees will be required to provide an estimate of his/her annual private mileage at the start of the contract. It is very important that employees provide an accurate assessment initially and also notify the Scheme Manager of any significant changes that may affect the lease contract Employees will be charged for all private mileage that exceeds the original contracted private mileage at the rate advised on the schedule. Contract hire companies do not provide refunds where estimated Policy for the Lease Cars Scheme Version 1, Draft 1 Page 11 of 34

12 mileages are not reached, therefore refunds cannot be paid if the private mileage total is less than that agreed in the contract. Where a driver notifies the Scheme Manager of changes to the private use of the vehicle the cost of the increase may be spread over the balance of the term at the discretion of the Trust. 17. HOME TO BASE MILEAGE 17.1 For the purpose of calculating the HM Customs and Excise income tax benefit charge, home to base mileage is classified as private mileage. Home to base mileage is the actual mileage recorded on the employee s current travel claim form. Employees must notify the Scheme Manager of any changes of home address Employees who are asked to take his/her vehicle home for official purposes e.g. to respond to emergency call-out etc. will class the first home to base journey as private mileage. If the employee is called out and has to return to work or any other location on duty, the return journey and all subsequent call outs during the on call session will be recorded as business mileage. Employees who use his/her vehicle for business use only and are requested to take their vehicle home for duty on call purposes will be liable to pay car benefit in kind tax Business mileage fuel reimbursement will not be paid for home to base mileage unless the employee is at that time on official business e.g. Emergency call out or when excess mileage has been agreed following relocation. 18. EXCESS TRAVEL (HOME TO BASE MILEAGE) 18.1 Where an employee has been relocated and an additional allowance has been agreed, the excess mileage calculation will be based on the following formula: - a) Agree the return distance between the employee s home and old base Policy for the Lease Cars Scheme Version 1, Draft 1 Page 12 of 34

13 b) Agree the return distance between the employee s home and new base c) Multiply the difference between a) and b) above by the working days per week, less the number of days out of the office for business journeys starting from home. d) Multiply the number of journeys per week by the contracted weeks per year less any annual leave and Bank holidays due. 19. STUDY LEAVE 19.1 Where an employee undertakes official study leave all journeys will be recorded as business mileage subject to the normal rules for home to base mileage above. Fuel reimbursement will be paid at the prevailing rate. The business mileage undertaken on study leave will be included in the assessment of annual business mileage for the purpose of allocating an allowance for the calculation of private use rental. 20. MILEAGE RECORD 20.1 Employees will continue to record accurately their total daily mileage on the mileage record provided. The record is for control purposes only and not for payment It is a condition of this contract that an employee continues to submit his/her mileage record and odometer reading each month, to his/her relevant Line manager, for certification and approval before onward transmission to Scheme manager The Director of Finance, the Chief Internal Auditor or their nominated representative may, at any time, request to see the milometer reading to check recordings. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 13 of 34

14 COSTS BORNE BY THE EMPLOYEE 21. MONTHLY RENTAL 21.1 The employee will pay the contributions agreed at the commencement of the contract and shown on the Quotation Form and the Second Schedule (acceptance form) provided by the Scheme Manager The Trust will pay the leasing cost of the car. As a condition of the car being available to the employee for private use, the Trust will require the employee to pay a contribution for the private use according to the calculation set out on the quotation form Value Added Tax will be applied to the monthly rental. 22. VARIATION TO CHARGES 22.1 The rental may be varied by the Trust to take into account any increases or decreases resulting from changes to Insurance Rates, Road Fund Licence fees, VAT Rate and Contract Hire variations due to changes in private mileage Additional costs attributable to the employee will be those arising from employee s actions or from misuse, negligence or breach of the contract conditions contained herein or contained within the manufacturer s handbooks and other publications issued from time to time. Failure to ensure that the vehicle is serviced at the recommended intervals or failure to maintain correct air and fluid levels will constitute negligence or breach of contract and may result in additional costs being levied on the employee The rental will be based on the latest price issued by the supplier applicable at the time of delivery of the vehicle. The price may vary from the quotation provided at the time of application. The Trust will make every reasonable effort to notify employees of changes but it will not accept liability for additional costs. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 14 of 34

15 22.4 Should any modifications be required to the vehicle due to statute, the cost will be shared between the employee and the Trust in the same proportion that the original hire cost as split between the Trust and the employee The employee will pay for all fuel and the provision of all the vehicles top up fluids The employee will pay any fines for unlawful parking of the hired car and any other fines which arise through driving of that vehicle. The employee will also pay for any reasonable related legal, administrative or maintenance costs which arise from an illegal act The employee will pay excess charges imposed by the Insurance Company for claims for accidental damage, fire or theft, including excess charges for windscreens, window glass, mirrors and headlight replacement unless they are on official business then the Trust will pay The employee will pay the costs of repair and replacements to the car made necessary as a result of deliberate abuse or wilful neglect. The employee on receipt of an account must reimburse any such costs that the Contractor and the Director of Finance considers to have been caused by such deliberate abuse or wilful neglect, to the Trust for the amount due. 23. CONTRACT TERMS 23.1 Save as expressly provided for in this Agreement the Trust does not supply the vehicle with or subject to any warranty express or implied by Statute or otherwise as to capacity, age, quality, state, condition or fitness for any purpose whatsoever The employee must not sell, assign, re-hire, charge or part with possession of the hired vehicle or attempt to do so except as authorised under the conditions of the lease The act of omission of any person authorised by the employee to use Policy for the Lease Cars Scheme Version 1, Draft 1 Page 15 of 34

16 the vehicle shall for the purposes of the Agreement be deemed to be the act of omission of the employee The employee shall permit representatives of the Trust or the Scheme manager to inspect the state and condition of the car at any reasonable time Subject to the employee continuing to be eligible under these terms and conditions he/she will normally have the option at the end of the contract period to either: - a) Enter into a new hire agreement; or b) Use his/her own car on official Trust Business. 24. USE OF CAR 24.1 The car will generally be used only by the employee and immediate family and by anyone authorised by the Trust, provided that they are properly qualified drivers holding a full current driving licence and are included on the insurance policy. Business use is restricted to when the employee is using the car on Trust business The hirer will submit a copy of a driving licence for each driver named by the hirer to drive the vehicle and will be responsible for notifying the Trust of any changes including driving offences or penalties awarded against the nominated driver(s). The hirer will also notify the Trust of any illness or disability suffered by any approved driver that may affect the Trust s vehicle insurance The car may only be used for Trust business and normal social, domestic and pleasure purposes. The car shall be available for official use at all reasonable times except when the car is being repaired or serviced The employee must not use, or permit to be used, the vehicle in breach of any sub-clauses neither of this clause nor for hire, reward, competition, trials or pace making. The vehicle may only be used for Policy for the Lease Cars Scheme Version 1, Draft 1 Page 16 of 34

17 driving tuition with the written agreement of the Trust Use abroad is permitted subject to prior written application to the Scheme Manager. Maintenance costs are not covered when the car is abroad. It is the employee s responsibility to make special arrangements to cover this period. The minimum acceptable cover is that provided under AA 5 star cover. Employees will be advised on the maintenance requirement when written permission is given If during the period of hire the vehicle becomes unroadworthy the employee s obligations to make the hire payments to the Trust under this agreement will remain the same All Trust business mileage shall be undertaken in the hired car unless it is not available due to repair or servicing. When a pool car is not available and where a private vehicle is used in lieu of the hired car then business mileage reimbursement will be calculated at the current lease car fuel rate Employees will also be required to travel by hired car, or with an officer claiming NHS reimbursement whenever possible, rather than use public transport The employee is permitted to tow a caravan, boat or trailer provided prior approval in writing is obtained from the Contractor through the Scheme Manager. Approval will not be forthcoming if the employee s choice of vehicle is not considered suitable for the proposed towing. Any caravan, boat or trailer shall be towed only in conformity with all legal requirements and the manufacturer s specification Should the contract hire company choose to charge an increased rental to the Trust to cover the lower residual value and higher maintenance costs which result from towing this charge will be paid in full by the employee. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 17 of 34

18 25. ACCESSORIES 25.1 The employee may request either at the time the vehicle is ordered or at any subsequent time, subject to written approval, the addition of any accessories approved by the leasing company. An approved dealer will then add these to the vehicle at the employee s expense. The employee will not be entitled to remove from the vehicle either before or after the expiration of the contract period, any such accessories so fitted save with the written approval of the Leasing Company. No accessories may be fitted to the vehicle except as permitted above. Income tax is chargeable on all accessories fitted to the lease car. Therefore, it is the responsibility of the employee to notify the Scheme Manager of the item and the full list price excluding VAT of the item and the price paid. 26. MAINTENANCE AND REPAIR 26.1 The scheme incorporates full maintenance which includes the cost of all servicing in accordance with the manufacturer s recommendations, mechanical or electrical repairs, replacement tyres, batteries, exhaust except: - a) Where the need for repair or replacement arises by virtue of any breach of the terms of this Agreement by the employee (when the employee will be responsible) or b) Where in the opinion of the Contract Hire Company it would not be economic to repair the vehicle AA/RAC membership or similar recovery or assistance services (including Relay and Homestart) is included in the scheme. Membership of the recovery service is based on fleet arrangement and does not provide corporate membership facilities In certain cases repairs to tyres (i.e. punctures) will be the financial responsibility of the employee although faults in tyres due to a problem in manufacture will be the financial responsibility of the servicing agent. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 18 of 34

19 Damage caused by accidents or running over debris etc. will be classed as accident damage and subject to insurance excesses. Where a tyre is replaced the value of the remaining tread depth will be taken into account An appropriate dealer who is acceptable to the Contractor, the Trust and the Employee will carry out service maintenance and repair. A franchised dealer must undertake all warranty work. Unauthorised maintenance/repair work could result in the withdrawal of the hired vehicle from the employee A driver s handbook will be given to the employee when the car is delivered. This handbook should be kept in the car for ease of reference. The employee must familiarise him/herself with the instructions contained therein for dealing with repairs to the vehicle whether arising by virtue of an accident or otherwise and comply with the same The employee must not commit the Trust or Contract Hire Company to expenditure for repairs estimated by the repairer to cost more than the base figure provided by the insurance company or its representative, unless in an extreme emergency occurring outside working hours, without the express consent of the Leasing Company Employees will be expected to organise their working day so that car service/repair arrangements have the minimum effect on their workload. 27. EMPLOYEE RESPONSIBILITIES 27.1 The employee has specific responsibility for the following: - a) Keeping the car in a clean condition. b) At regular intervals checking the oil, water, lights, battery, brake and any other fluid levels, tyre pressures and the condition of tyres and taking necessary corrective action. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 19 of 34

20 N.B. Undue wearing of or damage to tyres must be reported to the repairer immediately and the car must not be used unless the tyres conform to all relevant legal requirements. The employee will not change the car s tyres or battery without consent of the Scheme Manager. c) Taking all reasonable precautions against frost damage and ensuring that there is an anti-freeze content within the engine coolant system. d) Observe any recommended running in speeds and complying with any other recommendations concerning the running of the car during a running-in period. e) Reporting defects promptly to the appropriate dealer and the Scheme Manager. f) Ensuring that the appropriate repairer carries out servicing and maintenance at the intervals recommended in the car manufacturer s handbook. g) Ensuring that the road fund licence is displayed in the car by the due date. The Scheme Manager will forward new/replacement road fund licences. h) Ensuring that an MOT test is carried out in sufficient time for the contractor to receive the certificate and obtain a valid road fund licence. The driver should ensure that the service agent submits the MOT certificate directly to the contractor with their repair invoice. i) Ensuring the reasonable security of the car at all times, any cost of garaging to be borne by the employee and any change of address to be given in writing to the Scheme Manager. j) Conforming to all instructions and recommendations in the manufacturer s handbook and all other instructions and advice given by the contractor or the Trust. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 20 of 34

21 k) Not altering, modifying or removing any parts from the vehicle, nor changing any of the identification marks or numbers, without prior consent in writing of the Leasing Company. l) Not overloading, overworking or otherwise subjecting the vehicle to stresses for which it is not designed, nor using the same to carry goods for which it is not suited. m) Notifying the Scheme Manager as soon as reasonably practical of any defect or failure of the odometer or milometer attached to the vehicle. In which event the Trust may in its absolute discretion estimate unrecorded mileage based upon the average distance covered during the last complete year before such failure or defect was discovered and such other relevant information as it chooses to consider. 28. INSURANCE REQUIREMENTS 28.1 The vehicle shall be at risk of the Trust, which will keep in force, with the insurer, comprehensive insurance cover including private use against: - a) Damage to the vehicle by fire, theft, accident and any other cause against which insurance is normally obtainable and b) Third party liability arising in connection with the use of the vehicle as required by law The insurance, as arranged by the Trust, covers the full replacement value of the vehicle. The policy shows the interest of the Trust and the Leasing Company. In the event of a write off all monies will be paid direct to the Leasing Company Employees must make themselves familiar with the contents of the policy and will be required to complete a proposal form at the start of the contract, providing details of all drivers of the vehicle. Employees must submit a copy of each driver s licence annually and notify the Scheme Manager of any changes. Details of the policy and insurance schedule will be made available, on request, from the Scheme Policy for the Lease Cars Scheme Version 1, Draft 1 Page 21 of 34

22 Manager The Trust will arrange and automatically renew the cover annually. Employees will ensure that they keep in force and do not by any act or omission invalidate the insurance cover The Insurance Schedule incorporates standard excess in the event of any claim. Additional excesses apply in the event that the vehicle is being driven by, or is in the charge of any person under 25 years of age or any person who holds a driving licence for less than 12 months immediately preceding the claim, or drivers with convictions for drink drive, drug offences etc The Trust will be responsible for any excess insurance charges incurred during business use of the vehicle. In all other cases where accidents happen the employee will pay the excess. If, subsequently, any third party claim is successful, refunds will be made accordingly In the event of a claim for a windscreen or glass only replacement the excess if applicable will be paid by the Trust and recovered from the employee by cheque or salary deduction The standard policy provides limited cover for the loss or damage to personal effects in or on the insured vehicle if they are lost or damaged. Please note that we strongly advise that personal effects should not be left in the car at anytime. If you do leave items in the car they should be securely locked in the boot and kept out of sight The Trust will not accept any liability for the loss or damage to personal effects. Employees are advised to ensure that insurance cover is adequate for his/her needs; additional cover should be taken out if necessary. Personal effects are normally covered under domestic household contents policies The insurance premium quoted does not include an indemnity against financial loss consequent upon the early termination of the lease vehicle contract. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 22 of 34

23 28.11 To attend or participate in any training that the Trust and /or insurance company request (which is supported by the Trust). 29. ACCIDENT DAMAGE 29.1 In the event of an accident the employee must follow the procedure set out in the leaflet Road Traffic Accidents Procedural Guidance contained within the drivers handbook Employees are responsible for informing the Scheme Manager of the accident by telephone and by completion and submission of the insurance claim form as soon as possible. Employees should also enact all repairs necessary to restore the vehicle to its former condition prior to the accident as soon as possible after authority has been given Where damage is light, the employee may choose to pay for the cost of repairs, subject to notification to the Scheme Manager In the event of total loss through write off action, the insurance company will make payment direct to the Leasing Company This Agreement will be terminated immediately following a total loss. EARLY TERMINATION OF THE CONTRACT 30. COSTS BORNE BY THE TRUST 30.1 In the event of the employees death in service or on early termination of the employee s contract on the grounds of ill health or redundancy there shall be no financial penalty to the employee or their Estate on account of the early termination of contract for private use of the Car In the event that the employee is absent from work for an extended period on maternity leave, or on approved training, the employee who has contracted for private use of the car, may choose to continue the private use at the contracted charge or to return the vehicle to the Trust. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 23 of 34

24 In the latter case there shall be no financial penalty to the employee on account of early termination of the contract. 31. COSTS BORNE BY THE EMPLOYEE 31.1 In the event of early surrender of the car for any reason not covered by 30.1 and 30.2, the employee could be liable to pay the early termination charge imposed by the leasing company. This is usually the multiple of the monthly rental charge depending upon how long the contract has to run. The calculation of the charge varies between leasing companies but typically it could be as much as eight twelfths (if the contract is in the first year) of the annual lease rental paid by the Trust to the leasing company. On request the scheme manager will provide quotations. Note it is very important that at least one month s notice is given of early termination of the contract. (Failure to provide adequate notice could result in a delay in the final payment of salary due, in order to resolve any problems) In the event of early termination detailed above, the employee will be liable to pay: - a) Any early termination charge imposed by the leasing company. b) Any outstanding insurance premium. c) The current administration fee contained in the cost data summary d) Any costs arising from the condition of the car or excess mileage on handover Employees are advised to seek advice before terminating the contract. AT THE END OF THE CONTRACT PERIOD 32. ACTION TO BE TAKEN (Including Extension of Lease Car Contract) 32.1 At the end of the contract hire period the employee must immediately deliver up the vehicle to the Trust in good repair and condition (fair wear Policy for the Lease Cars Scheme Version 1, Draft 1 Page 24 of 34

25 and tear only accepted, this is in the opinion of the lease company ) and free from any defects other than those already notified by the employee to the Trust The car will be appraised for condition by the leasers representative in the presence of the employee who will be invoiced by the lease company for the cost of any repairs that the Contractor considers are needed to bring the car into good condition taking fair wear and tear into account In default of delivery of the vehicle upon termination, the Trust will be entitled without notice to retake possession of the vehicle and all costs and expenses incidental to the recovery of the vehicle incurred by the Trust must be repaid to the Trust by the employee The employee will provide the Scheme Manager with the final mileage readings. This along with the monthly return will be used to calculate the final charges for this lease The tables below provide examples of various scenarios regarding responsibility for end-of-contract costs. The scenarios should only be taken as a guide to procedures and actual costs will depend on individual circumstances. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 25 of 34

26 End of Contract Scenarios Key: * Where excess business miles has not been agreed with the senior manager at the trust, there will be no adjustment to fuel Some lease car providers have a buffer on excess mileage (usually upto 2000 miles) so there would not be a payment to be made to the Scheme Manager. # Some lease car providers do not provide a refund for credit mileage, and there would be no corresponding payment made by the Scheme Manager. A. The overall mileage is the same as contracted mileage: Scenario 1 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay (Receive)/Pay Excess Mileage adjustment ( 70.00) Fuel Allowance adjustment ( ) ( ) Scenario 2 Business Miles Personal Miles Total Contracted *Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay (Receive)/Pay Excess Mileage adjustment ( 35.00) 0.00 *Fuel Allowance adjustment ( ) ( ) 0.00 Policy for the Lease Cars Scheme Version 1, Draft 1 Page 26 of 34

27 B. Overall mileage is more than contracted miles: Scenario 3 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay Mileage adjustment ( 35.00) ( 35.00) Fuel Allowance adjustment ( ) ( ) ( 35.00) Scenario 4 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay Mileage adjustment ( 35.00) ( 35.00) Fuel Allowance adjustment * ( ) ( ) ( 35.00) Scenario 5 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay Mileage adjustment ( 70.00) *Fuel Allowance adjustment ( ) ( 95.00) ( 70.00) Policy for the Lease Cars Scheme Version 1, Draft 1 Page 27 of 34

28 C. Overall mileage is less than contracted miles: Scenario 6 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay (Receive)/Pay #Excess Mileage adjustment ( 35.00) ( 35.00) Fuel Allowance adjustment ( ) ( ) Scenario 7 Business Miles Personal Miles Total Contracted Actual Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay (Receive)/Pay #Excess Mileage adjustment ( 70.00) Fuel Allowance adjustment ( ) ( ) Scenario 8 Business Miles Personal Miles Total Excess Mileage adjustment Fuel Allowance adjustment Trust Driver Scheme Mgr (Receive)/Pay (Receive)/Pay (Receive)/Pay #Excess Mileage adjustment ( 70.00) *Fuel Allowance adjustment ( ) ( ) Policy for the Lease Cars Scheme Version 1, Draft 1 Page 28 of 34

29 EXTENSION OF LEASE CONTRACT 32.6 The Scheme Manager will be able to extend the contract without permission from Trust whilst awaiting delivery of new vehicle If an employee wishes to request an extension of the Lease they will require authorisation from their manager and their Trust stating the reasons as to why an extension is required. The Trust has the right to refuse this request. 33. PURCHASE OF A HIRED CAR 33.1 At the end of the contract hire period, or on early termination of the contract, the employee will be given the opportunity to purchase the vehicle at a rate agreed with the contract hire company. 34. TITLE TO THE VEHICLE 34.1 Nothing in this Agreement is to be construed as implying that title to the Vehicle can or shall at any time pass to the hirer. However, it is agreed and understood that between the date of the Agreement and the time when the vehicle is actually returned to the Trust, the hirer (being the person by whom the vehicle is kept) is the owner of the vehicle for the purposes of section 1 2 of the Road Traffic Act 1974 (and any statutory re-enactment thereof). If, notwithstanding the above, any notices are served upon, or proceedings instigated against the Trust or the Leasing Company in respect of any offence allegedly committed, or excess charge allegedly incurred, in respect of the vehicle during the aforesaid period, the Trust and the Leasing Company shall be at liberty to take such action in relation thereof as the Trust or the Leasing Company in their reasonable discretion deem fit (including paying any fines, penalties, or excess charges whether legally demandable or not, or defending such proceedings) and the Hirer shall indemnify the Trust to the Leasing Company in respect of fines, penalties, excess charges costs or legal expenses and shall further indemnify the Trust against the administration costs involved. The hirer should notify the Line Manager Policy for the Lease Cars Scheme Version 1, Draft 1 Page 29 of 34

30 of any such fees, penalties or excess charges incurred during the course of the hirer carrying out their duties. 35. GENERAL 35.1 The rights and remedies of the Trust hereunder shall not be affected by any giving of time or any other concession or indulgence granted by or neglect of the Trust to the hirer The hirer shall not assign transfer charge the benefit of or in any way make over this Agreement nor pledge or purport to pledge the Trusts credit All amendments to this Agreement shall be made in writing The employee must immediately report any changes to their personal circumstances to the scheme manager this includes changes to where the car is being kept. 36. COMMUNICATIONS 36.1 Any communication required or permitted under the terms of this Agreement shall (unless otherwise provided) be in writing and shall be delivered in person or sent by registered mail as appropriate, properly posted and fully pre-paid in an envelope properly addressed to, in the case of the hirer, the address set out in the Schedule or as otherwise notified in writing to the Trust and in the case of the Trust to Total Contract Management, Dominion Way, Rustington, West Sussex, BN16 3HQ. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 30 of 34

31 37. YOUR RIGHT TO CANCEL The Consumer Credit Act 1974 covers this Agreement and lays down certain requirements for your protection which must be satisfied when the Agreement is made. If they are not, the owner cannot enforce the Agreement against you without a court order. If you would like to know more about the protection and remedies provided under the Act, you should contact either your local Trading Standards Department or your nearest Citizen s Advice Bureau. You have a right to cancel this agreement. You can do this by sending or taking a written NOTICE of cancellation to the Trust to the address shown below. You have FIVE DAYS starting with the day after you received this copy. You can use the form provided. If you cancel this agreement, any money you have paid, goods given in partexchange (or their value) and property given, as security must be returned to you. You will not have to make any further payment. If you already have goods under the agreement, you should not use them and should keep them safe. (Legal action may be taken against you if you do not take proper care of them). You can wait for them to be collected from you and you need not hand them over unless you receive a written request. If you wish, however, you may return the goods yourself. Policy for the Lease Cars Scheme Version 1, Draft 1 Page 31 of 34

32 38. CANCELLATION FORM Only complete and return this form, if you wish to cancel the agreement. To: Total Contract Management (TCM) Dominion Way Rustington West Sussex BN16 3HQ I / We hereby give notice that I / we wish to cancel the Agreement for Lease car. Signed: Date: Name: Address:... Policy for the Lease Cars Scheme Version 1, Draft 1 Page 32 of 34

33 APPENDIX 1 Equality Impact Assessment Summary Policy for the Lease Cars Scheme Version 1, Draft 1 Page 33 of 34

34 Policy for the Lease Cars Scheme Version 1, Draft 1 Page 34 of 34