Company car drivers working for MG Rover have been told they are now personally liable for the funding of their vehicles, even if they are made redundant. It is thought that a total of 12,000 cars are on contract to staff.

Management pay 1.1% of list price per month, which includes insurance, on nine month/12,000 mile contracts, for the vehicles through Car Ownership Finance Limited. The money is automatically deducted from salaries in this lease arrangement.

At the end of the term the car is normally returned to Rover and replaced by a new car, and a new loan, with the company settling any outstanding finance on the old car.

The scheme will continue to be administered by MG Rover, but if workers sell their car, the company will not settle the outstanding loan.

If there is a shortfall between the sales price and the amount due staff may be asked by the finance providers for finance, workers have been told.

A source at MG Rover said: ‘All manager grades are entitled to two cars at this rate; some of the more senior staff could have three. It would appear we are personally liable for each vehicle and therefore will be expected to each pay £200 a month, even if the company fails to exist.

The 1.1% charge included fully comprehensive insurance. Since the appointment of PricewaterhouseCoopers as administrators this has been withdrawn, with all vehicles now on third party cover only.