Can you insure a Company leased car personally
Discussion
Can't seem to get a definitive answer in googleland?!
We used to lease a number of cars with a fleet policy. The cost increases in this are ridiculous (40% up last year) and we have been winding them down and not renewing the leases as it's becoming too costly.
We are now down to just 2 company cars, a mini and a mazda. These are only every driven by one person and have about 18 months left on their lease periods. Question is can these individuals just insure these cars in the normal way, like any other lease car rather than us getting caned on more price rises?
We used to lease a number of cars with a fleet policy. The cost increases in this are ridiculous (40% up last year) and we have been winding them down and not renewing the leases as it's becoming too costly.
We are now down to just 2 company cars, a mini and a mazda. These are only every driven by one person and have about 18 months left on their lease periods. Question is can these individuals just insure these cars in the normal way, like any other lease car rather than us getting caned on more price rises?
Why would you - apart from cost? The company own the asset, and yet you expect the operator of the asset to insure it?
What happens if she leaves, leaving the company's asset uninsured?
Who carries the liability for maintaining insurance on the company's asset, or for ensuring the adequacy of it?
How will you refund the employee for procuring the insurance on the company's behalf? Is there a risk of creating a BIK tax issue?
Who pays the excess if there is a claim on the insurance? Who pays for losses not recovered through insurance incurred on company business? Who pays if a 3rd party brings a claim against the company?
What is carried in the cars, do tools & samples & computers need declaring to the new insurer?
Why is the insurance bought privately cheaper, are you comparing the costs of the right classes of business use on private insurance?
I would look at moving from a fleet policy, which IME is any driver with any record (including drunks and insurance offences) with a car driven at any time kept in any location, to the specifics of a named driver only which would be based on the driver's specific record and should be far cheaper.
What happens if she leaves, leaving the company's asset uninsured?
Who carries the liability for maintaining insurance on the company's asset, or for ensuring the adequacy of it?
How will you refund the employee for procuring the insurance on the company's behalf? Is there a risk of creating a BIK tax issue?
Who pays the excess if there is a claim on the insurance? Who pays for losses not recovered through insurance incurred on company business? Who pays if a 3rd party brings a claim against the company?
What is carried in the cars, do tools & samples & computers need declaring to the new insurer?
Why is the insurance bought privately cheaper, are you comparing the costs of the right classes of business use on private insurance?
I would look at moving from a fleet policy, which IME is any driver with any record (including drunks and insurance offences) with a car driven at any time kept in any location, to the specifics of a named driver only which would be based on the driver's specific record and should be far cheaper.
Thanks for the reply. The cars aren't owned by the business, the business leases them and would pay for the insurance. There's no tools or even much business use, they are status cars with the job which will be replaced with cash.
Just not sure we want to be paying nearly £2k for two fifty year olds to be driving 4000 miles a year in them! Must be a cheaper alternative than a fleet policy that we might not qualify for as we just have two cars left now?
Just not sure we want to be paying nearly £2k for two fifty year olds to be driving 4000 miles a year in them! Must be a cheaper alternative than a fleet policy that we might not qualify for as we just have two cars left now?
Thanks both.
I don't see why there should be any issues? As I said, I think we'll struggle to get anything competitive on a fleet basis with two cars.
Both cars are driven by directors of the company and only by them and given they are company cars I can't see how it creates any additional BIK taxation?
I don't see a massive difference between this and you insuring a personal lease to be honest? That said, any further input by anyone who knows more about this than me is definitely useful!
I don't see why there should be any issues? As I said, I think we'll struggle to get anything competitive on a fleet basis with two cars.
Both cars are driven by directors of the company and only by them and given they are company cars I can't see how it creates any additional BIK taxation?
I don't see a massive difference between this and you insuring a personal lease to be honest? That said, any further input by anyone who knows more about this than me is definitely useful!
Eric Mc said:
Why would an individual want to take on the financial responsibility of their employer?
And, if they did, would they expect some financial compensation - such as a salary increase?
The company would pay the premiums, sorry for not making that clear. The two directors are keen to do this so that they can build up some NCB after having had company cars insured on fleet policies for the last five years for when these last two lease cars go back and they have to sort themselves out. Being directors they are not worried about this as no cars increases profit and therefore their dividendAnd, if they did, would they expect some financial compensation - such as a salary increase?
They don't need to do what you're suggesting to build up NCB, they just need a letter from the company to confirm they have x years history free of claims and their first private car insurer will turn that into NCB.
When I said "the company owns" I really meant "the company acquired", rather than the individual driver as a private citizen acquired the car.
I would have said £1k premium per car for a director spec car with 4,000 miles pa business miles driven by company directors is quite a good premium. Whatever you decide to do I'd get a broker involved.
When I said "the company owns" I really meant "the company acquired", rather than the individual driver as a private citizen acquired the car.
I would have said £1k premium per car for a director spec car with 4,000 miles pa business miles driven by company directors is quite a good premium. Whatever you decide to do I'd get a broker involved.
Collectingbrass said:
They don't need to do what you're suggesting to build up NCB, they just need a letter from the company to confirm they have x years history free of claims and their first private car insurer will turn that into NCB.
When I said "the company owns" I really meant "the company acquired", rather than the individual driver as a private citizen acquired the car.
I would have said £1k premium per car for a director spec car with 4,000 miles pa business miles driven by company directors is quite a good premium. Whatever you decide to do I'd get a broker involved.
Direct line quoted £282 fully comp for 10000 miles with no NCB and business use included. I think the broker idea is a good one, we'll look at thatWhen I said "the company owns" I really meant "the company acquired", rather than the individual driver as a private citizen acquired the car.
I would have said £1k premium per car for a director spec car with 4,000 miles pa business miles driven by company directors is quite a good premium. Whatever you decide to do I'd get a broker involved.
Davey Blueeyes said:
The company would pay the premiums, sorry for not making that clear. The two directors are keen to do this so that they can build up some NCB after having had company cars insured on fleet policies for the last five years for when these last two lease cars go back and they have to sort themselves out. Being directors they are not worried about this as no cars increases profit and therefore their dividend
So, you are asking, should the company continue to pay insurance for two leased company cars?That would be normal.
And I presume the individuals are taxed in the normal way under the Benefit in Kind rules for use of the company cars.
The thing you need to watch out for is "insurable interest"
scenario A - If a person leases a car and insures it in their own name, there is a definite insurable interest as they have an interest in the lease agreement.
scenario B - If a person insures a car leased in their employers company name, then they generally only have an insurable interest if they are a director of the company.
Scenario B is subject to the rules of the insurer, the views of the insurer, and what general mood the underwriter is in that day.
To make sure its right find a good independent insurance broker that specialises in single vehicle motor insurance.....not us BTW, we only are only competitive at high net worth single vehicle and commercial motor fleets
be very clear who's name the lease is in. What their role within the company is. then check the paperwork very carefully to ensure it matches, in particular the statement of fact.
In certain circumstances is could also change the required class of business use too.
i.e if you just say I need business use, insurers automatically give personal business use, where as it might need to be class 2 use "commercial travelling on behalf of employer"
scenario A - If a person leases a car and insures it in their own name, there is a definite insurable interest as they have an interest in the lease agreement.
scenario B - If a person insures a car leased in their employers company name, then they generally only have an insurable interest if they are a director of the company.
Scenario B is subject to the rules of the insurer, the views of the insurer, and what general mood the underwriter is in that day.
To make sure its right find a good independent insurance broker that specialises in single vehicle motor insurance.....not us BTW, we only are only competitive at high net worth single vehicle and commercial motor fleets
be very clear who's name the lease is in. What their role within the company is. then check the paperwork very carefully to ensure it matches, in particular the statement of fact.
In certain circumstances is could also change the required class of business use too.
i.e if you just say I need business use, insurers automatically give personal business use, where as it might need to be class 2 use "commercial travelling on behalf of employer"
surveyor said:
I'm doing this with LV at present. They seem quite comfortable with it.
That said, I'm not and at renewal it's being sorted.
Of all insurance companies, LV is the one I’d ask, and trust to get it right.That said, I'm not and at renewal it's being sorted.
That said, this question has come up before and I’m sure the OP in that thread was unable to find anyone who would do it as the lease was in a company name.
Sheepshanks said:
surveyor said:
I'm doing this with LV at present. They seem quite comfortable with it.
That said, I'm not and at renewal it's being sorted.
Of all insurance companies, LV is the one I’d ask, and trust to get it right.That said, I'm not and at renewal it's being sorted.
That said, this question has come up before and I’m sure the OP in that thread was unable to find anyone who would do it as the lease was in a company name.
Rang LV who again confirmed their records and that they were perefectly ok with if.
Hard work trying to get quotes from others. Some wanted the company to insure, the director to ring them, and we would be starting with 0 NCB.
LV by far the best option. Company will pay the premium. It’s a company van so I’m taxed anyway.
Thanks all, I really appreciate your input. For reference, the drivers of the cars pay company car BIK which includes everything except personal fuel. As I stated, the company will be paying the premium.
Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
Davey Blueeyes said:
Thanks all, I really appreciate your input. For reference, the drivers of the cars pay company car BIK which includes everything except personal fuel. As I stated, the company will be paying the premium.
Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
So the insurance is taxed under BIK?Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
Eric Mc said:
Davey Blueeyes said:
Thanks all, I really appreciate your input. For reference, the drivers of the cars pay company car BIK which includes everything except personal fuel. As I stated, the company will be paying the premium.
Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
So the insurance is taxed under BIK?Receiving any NCB is not that much of an issue, because it's already a huge discount over the fleet policy.
I think i'll be calling LV!
The only person benefiting from this arrangement directly is the company who is getting a cheaper rate. Can there be reverse benefit in-kind. Of course you could argue that the individual is building up no-claims history, but that's hard to value as its also at risk when the person is driving..
Again company car driver pays company car tax (or whatever it's called nowadays). To provide that benefit the company would have to insure the car, so to argue that this payment should be subject to additional benefit in kind would be double counting.
surveyor said:
Strange comment. If company provides car, company pays insurance. Insured under the individuals name the company benefits from personal rates rather than inflated business rates. Insurance company is aware so legally that is ticked off.
The only person benefiting from this arrangement directly is the company who is getting a cheaper rate. Can there be reverse benefit in-kind. Of course you could argue that the individual is building up no-claims history, but that's hard to value as its also at risk when the person is driving..
Again company car driver pays company car tax (or whatever it's called nowadays). To provide that benefit the company would have to insure the car, so to argue that this payment should be subject to additional benefit in kind would be double counting.
Yep. As far as I know the constituent parts (car lease cost, maintenance, insurance etc) of having a company car aren't separately subject to BIK taxation.The only person benefiting from this arrangement directly is the company who is getting a cheaper rate. Can there be reverse benefit in-kind. Of course you could argue that the individual is building up no-claims history, but that's hard to value as its also at risk when the person is driving..
Again company car driver pays company car tax (or whatever it's called nowadays). To provide that benefit the company would have to insure the car, so to argue that this payment should be subject to additional benefit in kind would be double counting.
Davey Blueeyes said:
Yep. As far as I know the constituent parts (car lease cost, maintenance, insurance etc) of having a company car aren't separately subject to BIK taxation.
For quite a lot of company car drivers the insurance is a significant free benefit which they overlook. When we first started offering opt-out of company the younger staff in the SE were getting insurance quotes in the £K's on pretty boggo 3 Series level cars.Gassing Station | Business | Top of Page | What's New | My Stuff