Finance Personal Guarantee

[RogEletre]

Hi All,  Just been going through the Finance process and reading the Ts and Cs and apparent Personal Guarantee.  The terms seem horrific.  Basically even a Ltd company you are then as the Guarantor personally liable for not just the car but costs, VAT, legal fees etc etc which could result in basically unlimited personal liability with no cover.  Perhaps I read it in correctly?

Without wishing to get any personal circumstances/specifics is this how other people read it and sort of stuffs the concept of a Limited Company and limited liability.

2. GUARANTEE
2.1 In consideration of the Company agreeing to make financial
facilities available to the Customer, the Guarantor irrevocably and
unconditionally undertakes the obligations and liabilities set out in
Clause 2.2 and Clause 2.3.
2.2 The Guarantor hereby undertakes with the Company that it will
on demand in writing made to it pay or discharge to the Company
all monies and liabilities which shall at any time be due owing, or
incurred to the Company by the Customer whether actually or
contingently and whether solely or jointly with any other person
and whether as principal or surety including interest, discount,
commission and all legal and other costs, charges and expenses
reasonably and properly chargeable with value added tax (if any)
thereon.
2.3 The Guarantor as principal obligor and as a separate and
independent obligation and liability from its obligations and
liabilities under Clause 2.2, irrevocably and unconditionally agrees
to indemnify the Company in full on demand against any losses,
costs and expenses suffered or incurred by the Company arising
from or in connection with –
(a) the company’s making available any facilities to the Customer
(b) any of the provisions of any of the documents relating to those
facilities being or becoming void, voidable, invalid or
unenforceable; or
(c) the failure of the Customer gully and promptly to perform and
discharge any of its obligations and liabilities to the Company.
2.4 The Guarantor hereby agrees to indemnify and keep indemnified
the Company (to the extent not otherwise indemnified under the
Guarantee) on demand by the Company against all losses, actions,
claims, costs, charges, expenses and liabilities suffered or incurred
by the company in relation to this Guarantee (including the costs,
charges and expenses reasonably and properly incurred in the
enforcement of any of the provisions of this Guarantee or
occasioned by any breach by the Guarantor

AND

3.1 This Guarantee shall not be considered as satisfied by an
intermediate payment or satisfaction of the whole or any part of
any sum or sums of money due, owing or incurred as aforesaid
but shall be a continuing security and shall extend to cover any
sum or sums of money which shall at any time constitute the
balance due from the Customer to the Company.

Cheers in advance.

Edited January 25 by RogEletre

[Bibs]

I guess this is needed to stop people setting up a ltd company online for £15 and dissolving it shortly after having taken delivery of a new car! I'd have though most car manufacturers would be similar when dealing with ltd companies for lease/finance. I know at my old firm the bank always insisted on director personal guarantees on any monies borrowed.

[RogEletre]

Agree fully and perfectly reasonable if that's the case.  Without divulging again significant cash at bank/trading history etc of 8 years + is slightly different one suspects.  Plus a £20K cash deposit!

Suffice to say I won't be signing that!  Polestar 4 beckons which is terribly disappointing 😞

Rant over, apologies but super deflated.

[C8RKH]

Personally, I would not sign that and would enter into a traditional business lease with an established business lease company.

@Bibs I understand your point, but companies leasing vehicles is a game almost as old as prostitution so I don't see why Lotus needs this, if many others don't.

I hate to say it, again, but Lotus 2.0 may be for the "driver", but it is not, for the "customer".

[Kevin Wheeler]

i would have said that is perfectly normal for a personal guarantee.

I always advise to avoid personal guarantees where you can. However, If you are sure that the company will pay, then, no bother.

[RogEletre]

1 minute ago, C8RKH said:

I wouldn't sign that and would enter into a traditional business lease with an established business lease company.

@Bibs I understand your point, but companies leasing vehicles is a game almost as old as prostitution so I don't see why Lotus needs this, if many others don't.

It's a PCP arrangement but through company (fairly standard) if they remove Guarantor Personally that's fine) I also have in writing (which is why I am so annoyed) that the box tick on the form was just to credit check me personally - which is more than reasonable.

Oddly on the Guarantor form they haven't even put my address in so all a bit slap dash. I have been on mail to them and they all seem very nice again but possibly panicking more than a little as had I signed it it's proper mis selling.

[Kevin Wheeler]

2 minutes ago, C8RKH said:

but Lotus 2.0 may be for the "driver", but it is not, for the "customer"

Judging by some of the threads these days, I think it is "for the gamer"

[RogEletre]

Just now, Kevin Wheeler said:

i would have said that is perfectly normal for a personal guarantee.

I always advise to avoid personal guarantees where you can. However, If you are sure that the company will pay, then, no bother.

Company is just me - Consulting Personal Services and you are quite correct and I have no worries obviously BUT it's principle and the fact they actively misled (I have all this in writing from them and just sent it to them to assess).

Also who knows what happens in two to three years time.

[C8RKH]

2 minutes ago, RogEletre said:

it's proper mis selling.

I'm not surprised. The stories on here are just frightening in terms of how Lotus has cobbled all this stuff together and how one arm doesn't seem to know what the other is doing.

[RogEletre]

‘Beneficial owner’ is just for whoever will be driving the vehicle, as for the Guarantor the underwriters have requested to carry out a credit search on the Director, therefore the ‘act as guarantor’ field would need to be amended to a yes.

Thoughts?  This was response to my query during Finance process.

[Kevin Wheeler]

If you answer yes to "act as guarantor", I would assume that means that you are agreeing to more than a credit check. You are right to be wary.

As an alternative: would your bank advance the balance without a PG? 

[RogEletre]

3 minutes ago, Kevin Wheeler said:

If you answer yes to "act as guarantor", I would assume that means that you are agreeing to more than a credit check. You are right to be wary.

As an alternative: would your bank advance the balance without a PG? 

Agreed and it did flag but I assumed it was the box (since I wasn't informed otherwise and explicitly, as per that note, given incorrect direction) was to allow them to credit check me - hence reading the small print before autographing.

Yep I have other possibilities but just a pain in the backside.  Going to chat with Accountant now to see if I can hire personally (then it's just the normal cash liability not the liquidated damages etc on top) and claim the expenses through the company and still get reliefs).

Can also talk to my bank about Business PCP it's just the time and hassle factor when buying a car they have made it painful and stressful process when others are super, super easy.

Pity the car is so cool right 😉  Thanks for being therapists today haha.  It's appreciated.  Better to find now than after signature.

[RogEletre]

Good news.  All is well in the world again.

Apparently I don't need to personally guarantee.  Big shout to Beth at Lotus Financial team - superb.  Credit where credit is due (no pun intended).

Certainly (as been stated before) some training issues.