Automotive: rescue and insolvency advice
Financial pressures in automotive
Motor traders and garages can have valuable vehicles on site while having very little cash available. Stock finance, workshop costs and customer deposits need to be separated before judging what the business can afford.
- Vehicle stock may be financed or held on sale-or-return terms
- Workshop equipment, diagnostic subscriptions and premises costs
- Deposits, unfinished repairs and warranty enquiries
What to review before deciding
Build a vehicle-by-vehicle schedule showing ownership, funding balances and sales status. Keep customer vehicles clearly identified and record parts ordered for unfinished jobs. Compare workshop contribution with vehicle sales rather than treating all turnover as equally profitable.
Rescue, repayment and closure options
The first question is whether the underlying business can meet its ongoing costs after realistic changes. A business rescue review can examine margins, creditor discussions and the resources needed to keep delivering work. Where tax arrears are part of the problem, HMRC Time to Pay depends on an acceptable, affordable proposal; approval is not guaranteed.
For a suitable limited company, a Company Voluntary Arrangement or administration may warrant consideration. If recovery is not viable, read about Creditors’ Voluntary Liquidation. Formal appointments require a licensed insolvency practitioner. The right route depends on the legal structure, jurisdiction and facts, not the sector label alone.
Prepare for a confidential discussion
Bring recent accounts, a current bank balance and a list of overdue payments. For automotive, also prepare records covering vehicle stock may be financed or held on sale-or-return terms; workshop equipment, diagnostic subscriptions and premises costs; deposits, unfinished repairs and warranty enquiries. Identify any payment demand, hearing or other deadline at the start of the conversation.
Ask for the proposed scope of work, likely fees and any assumptions in writing before agreeing to a paid service. An initial enquiry does not commit you to a procedure. Complete the enquiry form or call 01246 912052 to explain the position.
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Related guidance
Automotive: common questions
Check the funding agreement and obtain the necessary consent before any sale or use of sale proceeds. A vehicle on the forecourt is not necessarily an unrestricted company asset. Give your adviser the stock list and finance statements.
Identify each owner, the work completed and any outstanding invoice. Customer property must be distinguished from company assets. Agree a documented approach to collection or completion rather than treating those cars as stock.
Possibly, but it needs its own forecast covering technicians, parts, rent and equipment. Review shared costs and contractual restrictions before assuming one part of the business can continue independently.
Further reading: Closing a limited company. Guidance reviewed 1 November 2026. Regulatory requirements and procedures vary across the UK; obtain advice for your location and business structure.