In addition to providing employees a salary, some companies offer perks like gym membership, tuition reimbursement, and even free lunch.
One U.K.-based company, Your Housing Group, goes a step further: It’s introduced to its 1,500 employees a new salary sacrifice scheme from fleet management and funding company Lex Autolease. The program offers staffers a maintained and managed company car — to all permanent employees, not just at the executive level — for a monthly rental fee that is “sacrificed” from their pretax salary. The fee includes the basics of car ownership, from insurance and breakdown coverage to maintenance.
Vehicles available in the program range from Ford Fiestas and Volkswagen Golfs to BMW 3 series, and up to two additional drivers can be added to the agreement, which adds a further convenience for employees with families.
While we’re sure such an arrangement couldn’t be made with pretax dollars stateside, imagine the opportunities that could open up if auto lenders instilled a similar program with U.S. employers. It could certainly make the car-buying process — and vehicle ownership — less of a hassle, play a viable role in employee retention … and open up a whole new playing field for auto originations.
No notice of any kind is required if …
-You offer credit on the same terms to every approved applicant (i.e., you
do not offer varying terms depending on applicant’s credit report)
-You don’t use credit reports in any way to make the credit decision
-The transaction is not for a consumer purpose. The requirement only
applies to consumer purpose transactions (personal, family, or household
purpose) – not commercial
-The transaction is a consumer lease. (see 75 FR 2727)
-The terms offered to applicant are your most favorable rates and charges.
The notice is for those receiving less than the best terms (more detail to
follow).
-A guarantor, co-signer, surety, or endorser for another consumer who
applies and is approved for credit is not a consumer whom it “grants,
extends, or otherwise provides credit” so they are not required to receive
the risk-based pricing notice. (see 75 FR 2731)
That is interesting. Many companies have credit union agreements with buying services for employees and members. The employers already allow payroll deduction for savings and loan repayment at the CU. Not a stretch to add this.
There are major tax implications!