Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Son 17 car loan from his boss WWYD?

26 replies

Mamamiaherewegoagainmymy · 18/08/2018 14:01

Son just passed his test. He's an apprentice on 5.50ph as not 18 til.nearky Xmas. His boss has offered to buy him.a car ( expecting him to use it on business too) and my son has asked me for a loan to pay the insurance. I've said no as it sounds like his boss is only buying the car so my son can use it for work. IMO his boss should pay for the car AND business insurance. AIBU??

OP posts:
pinkyredrose · 18/08/2018 14:03

If its a company car then the company pay all expenses.

Ginmakesitallok · 18/08/2018 14:03

It doesn't generally cost any more to get business use added on? If there are no strings attached sounds like a great deal, would car be in ds's name?

DisplayPurposesOnly · 18/08/2018 14:07

If your son is able to use the car outside of work including commuting to/from work, then it's a taxable benefit:

www.gov.uk/tax-company-benefits/tax-on-company-cars

ADastardlyThing · 18/08/2018 14:10

To be clear, the boss will buy your DS a car but the only catch is hell be expected to use it for business use too but you think the boss should be paying more?

Is that correct?

RedneckStumpy · 18/08/2018 14:11

Sounds like a good deal to me,

Bunnybigears · 18/08/2018 14:11

You would need to be involved in this arrangement because im pretty sure an under 18 cant sign a legal contract. Whose name would the car be in? If its in your sons name what happens if he quits his job? If its in the bosses name or company name what is to stop him taking it back at any moment?

Original poster
Mamamiaherewegoagainmymy · 18/08/2018 14:11

He's 17 so his insurance would probably cost more than the car

OP posts:
Original poster
Mamamiaherewegoagainmymy · 18/08/2018 14:13

Yes that's correct AD

OP posts:
ADastardlyThing · 18/08/2018 14:14

Which it would do anyway, whether boss buys it or not

There are other things to consider like whether the boss will want a percentage of the cost back if your DS leaves but aside from all that unthinkable it's extremely greedy to expect him to pay the insurance too.

em198 · 18/08/2018 14:14

Is he actually buying it or providing a car allowance or bonus to pay for it? If it’s the later then it’s classed as income and taxed as income and he would be expected to cover all costs so would possibly need a loan for the insurance from you at the start if he is getting a allowance every month. If it’s a company car then it should be covered by the company I believe x

ADastardlyThing · 18/08/2018 14:14

Unthinkable = I think

Original poster
Mamamiaherewegoagainmymy · 18/08/2018 14:15

AD he would be buying the car for my son in exchange for my son paying all the insurance, using it for business and paying him.bavk everyone for the car- so essentially a loan

OP posts:
RedneckStumpy · 18/08/2018 14:15

Basically he is being issued a company car, yes the company can take it back at any time, but then your son wouldn’t be responsible for the maintenance.

Paying the insurance probably covers personal use.

If he thinks he has a good future at the company I don’t see a problem

ADastardlyThing · 18/08/2018 14:20

So he'd get to keep it? I think that's a fair deal possibly but I imagine it wouldn't be a bit of a banger which most first cars are so there's that to think about.

I think I'd probably say no if it was me. The loan and ds paying the insurance seems fair but I just wouldn't want to get in debt for that sort of money to my boss at just 17.

ADastardlyThing · 18/08/2018 14:22

It can't be a company car, it would have to be insured by the company, registered to them or hired in the co name, and have them responsible for upkeep etc, ops DS would be a 'grey fleet' driver

Besides, I have never come across a company that can get co car insurance for u21's

BiggerandBetter · 18/08/2018 14:31

The boss is not buying the car then, as you first said in your post. He's just offering a loan to buy a car.

Seems utterly pointless to me. He's not being "offerred" anything really.

19lottie82 · 18/08/2018 14:37

If its a company car then the company pay
all expenses.

This.

C8H10N4O2 · 18/08/2018 14:53

So your son ends up paying for both the car and the insurance but is expected to use it for business?

How is that a good deal for DS?

Myimaginarycathasfleas · 18/08/2018 14:53

So your son would have two loans, one from his boss for the car, and one from you for the insurance. Which do you think he will default on first?

montenuit · 18/08/2018 14:55

his boss HASN'T offered to buy him a car. Be clear on that.

He's offered him a loan so he can buy a car with the agreement he uses the money to buy a car and that enables him to use the car as needed for work.

if he uses his personal car (which it will be) for work then he will be able to claim expenses.

The insurance is a completely separate matter - can you afford it? Have you got a quote for it?

The questions I would ask are:

  1. what interest rate is he asking on this loan
  2. how long does your son have to repay the loan
  3. answers to 1&2 will give the monthly amount your son would have to pay, is this affordable?

If it is interest free, affordable and you/he can afford the insurance then i would say go for it but otherwise not.

MoonFacesMum · 18/08/2018 15:24

Hmm. I paid for my own car at 18. My dad kindly paid the insurance. My boss asked me to occasionally run errands in it so my dad gladly added business use to my insurance - my boss was brilliant, gave me time off in the run up to and during uni exams, gave me extra work whenever I needed it and wrote off any fees when he did work for me in a professional capacity. My dad and I valued that so it would never have occurred to us ask for more. Now that I think about it, I never even contemplated asking for petrol money for the mileage incurred while carrying out the errands.

I would think carefully about damaging any existing or potential goodwill by asking for money for insurance.

gingergiraffe · 18/08/2018 15:32

Hmm. Your son is going to be paying an awful lot for the ‘luxury’ of having a car and insuring it, all on an apprenticeship wage. How much is his employer expecting him to pay back each month?

Twelve years ago my son bought his first car with money I had put away for him over the years that he had been given for Christmas, birthdays etc. It cost around £2000. The fully comp insurance was just over that and he paid us back monthly. He was also 17 and an apprentice. Sadly he had a minor accident 6 months later and the insurance wrote it off. The amount he was given from the insurance was way below what he paid for it so his second car was obviously a much cheaper one. Maintenance was more expensive and there came a time when we had to write off what he owed us for the insurance as otherwise he would have had no money to live off. Once he had finished his apprenticeship his financial position improved.

What I am trying to say is, a new driver is more prone to accidents and if your son is using the car for work purposes this increases his chances of an accident. If he does have one, his insurance will also increase. If he drives a work vehicle, as my son did, accidents will be covered on work insurance, though I hope he never has one. Would an accident in his own vehicle mean he would not be able to work until it was repaired?

It may seem like a good deal but in his shoes I would keep work and personal driving separate. As others have said, what happens if he wants to move jobs?

BarbaraofSevillle · 18/08/2018 16:28

Can a 17 YO legally take out a loan even if it from his employer?

If your DS is responsible for all the costs of buying and running the car, his employer should pay him 45 pence a mile for all work mileage, any less and his employer is being tight.

Original poster
Mamamiaherewegoagainmymy · 18/08/2018 19:44

His employer is tight ( pays some of his employees cash in hand apparently) and deals with as much as he can get away with paying cash. He's a one man band outfit. I've just had a message from my son saying he ( my son ) feels like he is ' treated like family' by the employer- I just feel like he's being naive and his employer is taking advantage of this

OP posts:
Original poster
Mamamiaherewegoagainmymy · 18/08/2018 19:47

NB DS lives with his dad. Incidentally, he hasn't replied to the message ( what does your dad think about all this.). He's 17, I remember I thought I knew everything at that age. I just don't want him being taken advantage of.

OP posts: