Reply to: Personal Contract Hire, Car Insurance for business use?

[WTFH]

We have 2 cars - my wife's is bought and paid for (no loans/finance etc), mine is financed.
That way if we run out of war chest/cash, my car can go, but we still have one.
It's also because I tend to change cars every 4 years (a big waste of money, I know).

[LondonManc]

Just a thought for the OP: I changed my car in October. I was considering leasing and initially it appealed. Then I thought about it a bit more and realised that while a new car every 2 or 3 years sounds great, I'm never any nearer to not having a monthly payment. While owning a depreciating asset isn't great, it's a thicker end of the wedge than always paying a monthly payment, renewal deposits and never having an asset to call your own.

[northernladuk]

Yes, I run a limited company.

The general consensus seems to be that for a 'regular 9-5, 5 days a week, same client site' set-up like mine, I need 'Business class 1' insurance aka 'personal business use'. And, I don't need employer's business use? Is my understanding correct?

In any case, the initial link shared on this thread seems to give completely wrong info then:

Nope. The experts advice is correct. You've only copied part of it. If you are based PERMANENTLY then you can't claim mileage so you are not on a business trip. You are commuting. If your clients site is temporary and your home is your permanent place, which are the conditions under which you can claim the mileage, then you are company business so can claim (and need the extra insurance). The article does go on to explain that.

[manjack]

Yes, I run a limited company.

The general consensus seems to be that for a 'regular 9-5, 5 days a week, same client site' set-up like mine, I need 'Business class 1' insurance aka 'personal business use'. And, I don't need employer's business use? Is my understanding correct?

In any case, the initial link shared on this thread seems to give completely wrong info then:

Expert’s Answer: The answer to your query is ‘yes’ it is sufficient to just have SDP + Commuting, but only if you are permanently based at your client’s site.

[WTFH]

Fair point. I may well be wrong (I just ask the insurers for Class 1)

[northernladuk]

Are you a Ltd? If so, your contracts are between your company (I.e. Your employer) and your client. They are not between you and the client. As such, you need to be covered for "employer's business use"

Are you sure about this? You are not employed by your LTD. You are an office holder that is being re-numerated for services to your LTD. That is why NMW does not apply.

The wording isn't great but Business Class 1 states

Business Use Class 1

This is the level you need if you do some driving as part of your job, for example, travelling between sites away from your normal place of work.

If you’re using your car for hire, motor trade or the carriage of goods, like deliveries or door-to-door sales, then you’ll need a higher class of cover – Class 1 is very much just for travelling for work reasons.

That broadly equates to 'personal business'. The other option is for all employees and for carrying commercial goods. This could be argued to be the second option.

As this all relates to insurance I wouldn't be assuming anything. Just ring the insurance company and ask them. It will take a good 15 minutes of your time up but you will be safe.

[northernladuk]

I can see why the OP holds PC in such high regard

[WTFH]

Are you a Ltd? If so, your contracts are between your company (I.e. Your employer) and your client. They are not between you and the client. As such, you need to be covered for "employer's business use"

[manjack]

For the car I own at the moment, the policy schedule reads "Social domestic and pleasure + commuting + personal business use".

Does this mean Business class 1?

When I leased vehicle arrives, I am planning to keep the same policy and same level of cover and just swap the vehicle on the policy. Do you think "Social domestic and pleasure + commuting + personal business use" will be sufficient to satisfy Business class 1 cover requirements.

I logged in online on my insurance company's portal and can only see these options:

How do you use this vehicle?


Social domestic and pleasure only (SD&P)
All of the above, plus commuting
All of the above, plus personal business use
All of the above, plus employer's business use


Social, domestic and pleasure only: All cover levels include social, domestic and pleasure use. This excludes any travel to and from work or other business use.

All of the above, plus commuting: This cover includes social, domestic and pleasure use, plus any travel to and from work by any driver named on the policy.

All of the above, plus personal business use: This cover includes social, domestic and pleasure use, commuting and personal business use of the policyholder and their domestic partner only.

All of the above, plus employer's business use: This cover includes social, domestic and pleasure use, commuting, personal business use and use for the business of the policyholder's employer or business partner.

[psychocandy]

I thought you were still the registered keeper however it's financed so you need to take out insurance just the same whichever method.

What does the contract say?

I also thought it was Business class 1 you needed whichbyou have to ask for as its not standard but in many cases it doesn't make a difference to the price.

Yep will agree. These days it generally costs no extra for class 1 use. I guess its so common that people need it these days.

My Mrs does business travel but the people she works with are stupid. They refuse to get business use because employer wont pay for it. They just dont get the 45p a mile idea....

Wouldnt like to have an accident in the middle of the day, away from your normal place of employment without class 1 insurance. All it takes is for insurer to find out you were driving on business and thats possibly £10K or more down the swanny for a written-off motor.

[FrontEnder]

The 'personal' in PCH/PCP relates to who the finance is with, not how you use it. If people weren't allowed to use leased cars for business use, there wouldn't be much of a market for it.

If you're really not sure, you should probably check with the company you're leasing from. If for some reason you can't use it for business use, then the deal isn't for you.

[WTFH]

I am going for PCH, not PCP.

Whatever acronym you use, it's a personal finance agreement. My answer still stands.

...but as NLUK says, make sure you get class 1 if you are a contractor - "commuting" and "permanent place of work" are phrases that don't apply to contractors, and insurers are good at avoiding paying out.

[northernladuk]

I am going for PCH, not PCP.

I thought you were still the registered keeper however it's financed so you need to take out insurance just the same whichever method.

What does the contract say?

I also thought it was Business class 1 you needed whichbyou have to ask for as its not standard but in many cases it doesn't make a difference to the price.

[manjack]

I am going for PCH, not PCP.

[WTFH]

Yes, you can have business use on a PCP.