Is Personal Insolvency a Headache for Fleet Managers?

Is Personal Insolvency a Headache for Fleet Managers?

Personal insolvency has consequences that can be far reaching in its impact on employers, leaving them facing difficult, unexpected issues.

One such issue involves cars used for business purposes and their recovery.

Here, Paul Daine of Premium Collections talks about how insolvency can have a knock-on effect for business fleets and fleet management.


Who’s Car Is It Anyway?

Who owns a company car? There are certain pros and cons to do with whether the business or the employee owns it.

“Where the business owns the car, it can deduct depreciation and general expenses incurred from business use of the vehicle. Essentially, the car is a business asset.”


“Because the car is a business asset, this can then cause problems when you throw insolvency into the mix, with employees hanging on to their cars, if they can, even if they are company vehicles”

Paul Daine, Premium Collections


In insolvency situations, car ownership can become a contentious issue. Motor vehicles can be the cause of possible liability, and it is important that the official receiver establishes who owns the vehicle.

“This, though, is the source of the problem when it comes to company cars. If you don’t own the vehicle, then it’s not an asset for you to lose, but you might be tempted to try and hang on to it.”

Similarly, if a business declares insolvency, it will need to account for its assets, including company vehicles, but what if staff who the business can no longer afford to employ, are reluctant to return them?

Why are these situations likely to occur?


Perceived Necessity

“If you’re insolvent, or find yourself suddenly out of a job due to someone else’s insolvency, you need all the help you can get to find employment, and function as normally as possible.”

Should you consider public transport options, even though the UK’s problems with its rail network are well-documented?

Furthermore, analysis by the BBC has revealed that bus networks in Britain have reached a 28-year low. There has been a loss of over 134 miles of bus coverage in the past decade.

Why does this matter for fleet managers?


“For those people hanging onto their company vehicles, they may feel this is their best option for finding new opportunities, or just for maintaining some sense of balance”

Paul Daine, Premium Collections


“It’s not the right thing to do, when insolvency strikes, but you can see why it happens. Many people perceive a car as a necessity.”

Fleet managers may then find that they have the additional burden of vehicle recovery as an unforeseen consequence of personal insolvency.

“Understandably, this is likely to be something outside their usual remit, requiring specialist insight, knowledge and practical recovery solutions.”


The Tools of the Trade

Company cars can become areas of complexity when it comes to insolvency.

An appeal court ruling recently called into question of whether someone declared insolvent holding a vehicle under a hire purchase agreement could classify it as a tool of the trade.

In the Mikki v Duncan case, the Court dismissed an appeal from a bankrupt against a decision not to let him purchase his car back form a hire purchase company as a tool of the trade.

“With insolvency and vehicles, the stakes can be high,” Paul concludes.  “This is why vehicle recovery is a vital part of commercial debt recovery, helping secure a company’s assets when they are threatened.”

To discover more about your vehicle recovery options, please call Premium Collections on 0161 962 4695 or visit