BVRLA News

www.bvrla.co.uk August/September 2012

The newsletter of the British Vehicle Rental and Leasing Association

Safety recall: sign up now! The BVRLA and technology company Ebbon-Dacs are urging more manufacturers to sign up for ReCare, the new online vehicle safety recall system developed for the fleet industry. Now running with a number of BVRLA rental and leasing members, ReCare is a free service that matches vehicle manufacturer VIN-based safety recall data to fleet vehicles. Ford, Fiat, Mazda, Chevrolet and Volvo have already backed the project, which has also had input from the Vehicle and Operator Services Agency (VOSA) and vehicle provenance check providers. Ebbon-Dacs has been working with the BVRLA for almost a year to develop a web-based vehicle recall system that will provide a single point for all manufacturers to list their safety recall notifications. BVRLA members or their appointed agents can retrieve the information by inputting their own fleet data for comparison purposes. The ReCare system shows all vehicles that are subject to a new safety recall notification and highlights fleet vehicles with outstanding recalls to their fleet operator. It also has the potential to cover non-safety recalls.

September sees final reviews being carried out, including final validation of reports with fleet operators and manufacturers before the system is officially ready to go live, in line with a pre-agreed schedule. “This system has the potential to support massive duty of care and road safety benefits to the fleet sector,” said BVRLA chief executive John Lewis. “It will also reduce the cost and administrative burden faced by manufacturers trying to notify recalls to thousands of different fleet owners.” According to VOSA, there were 219 safety recalls in 2011, affecting 1.3 million vehicles. Steve Molyneux, head of commercial of the Leaselink International division of Ebbon-Dacs, said: “There has been a generally wide recognition of the benefits the project can bring and a strong desire to contribute to it from all parties we have worked with. “Our primary objective in introducing this new ‘standard’ on behalf of the BVRLA has always been to simplify the process and reduce the administrative burden fleet operators face in handling vehicle recalls.” n

Lewis: end of an era draws near BVRLA chief executive John Lewis has announced that he will be stepping down from his post in the Spring/ Summer of 2013. Representatives from the BVRLA’s Committee of

Management are currently finalising a recruitment and handover plan, and John will continue to work part-time at the association for a further year to ensure a smooth transition. “In the meantime, I will continue to focus on the many challenges our industry faces and I look forward to meeting members at some of our forthcoming events,” he said.

In this issue Rental must adapt to age discrimination law The BVRLA launches its guide to the new laws on age discrimination page 3 Workshop will explain DVLA services The Driver and Vehicle Licensing Agency and the BVRLA will host a workshop on planned changes to DVLA services page 4 LCV whole vehicle type approval will cost Whole vehicle type approval for light commercial vehicles could result in longer and more costly build times for modifications page 5 Golf Day: full report The annual BVRLA Golf Day took place on 6 September – who took home the trophies? page 6 Used cars: what are the market trends? BCA’s Used Car Market Report pulls together data on car ownership and new and used vehicle sales – read our summary of the key trends for coming years. page 7

— Promoting responsible road transport since 1967 —

Download your booking form here

Thursday 29 November

Heritage Motor Centre, Gaydon, Warwickshire

The BVRLA’s flagship conference is the vehicle rental and leasing industry’s favourite opportunity to network, discuss key issues and prepare for the challenges ahead. Now in its fourth year, the event will provide delegates with the very latest market information and update them on important legislative and tax developments. The BVRLA has assembled a cast of industry experts who will share their business insight and experience and provide guidance on a range of subjects.

❱ How will the 2012 Budget ‘tax attack’ impact

the vehicle rental and leasing sector?

❱ What is the industry doing to fight back? ❱ Is the UK economy stuck in the slow lane? ❱ What is the BVRLA focusing on for the

year ahead?

technology should we be watching out for?

❱ Key legislation – and how to stay compliant. ❱ The latest trends in residual value

❱ Residual values and remarketing ❱ Car ownership and the future of vehicle rental ❱ Enforcement and compliance

Who should attend?

❱ What has happened to funding? ❱ Which new cars, vans, trucks and

You will also be able to join our essential breakout sessions, which delve into operational issues:

and remarketing.

❱ What is the future of car ownership? sponsor supported by

❱ Senior rental and leasing industry executives ❱ Industry suppliers and consultants ❱ Finance providers ❱ Motor manufacturers and dealer groups ❱ Vehicle remarketers ❱ Independent service/repair companies

Rental firms must adapt Comment to age discrimination law ’Twas ever thus. Just as we get used to one set of Transport ministers, they are off.

It is far too early to pass judgement on new boys Patrick McLoughlin, Simon Burns and Stephen Hammond, but it is good to see that at least two of them have previous form in the department, either in government or on a shadow basis. The fact that Norman Baker is still in situ should ensure some continuity in his area of local transport planning and sustainable travel. As you would expect, the BVRLA has already contacted the new team to bring them up to speed on our key concerns and we will keep you posted on any developments.

Toby Poston Editor Toby Poston, toby@bvrla.co.uk 01494 545700 Production Manager Steven Prizeman, steven@bvrla.co.uk 01494 545710 Advertising Nora Leggett, nora@bvrla.co.uk 01494 545713 © Copyright BVRLA 2012 BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.

BVRLA River Lodge, Badminton Court Amersham Buckinghamshire HP7 0DD T 01494 434747 F 01494 434499 E info@bvrla.co.uk W www.bvrla.co.uk Honorary Life President Freddie Aldous Chairman Neil Cunningham Vice Chairman Peter Cakebread Honorary Treasurer Brian Back Chief Executive John Lewis

BVRLA News | August/September 2012

The BVRLA has prepared guidance for rental companies following the Home Office’s refusal to exempt car rental from the government’s age discrimination legislation, due to come into effect from 1 October.

A Home Office spokesman said that despite the age discrimination ban “rental companies would still be able to limit their rentals as now, but unlike now they would have to be able… if challenged, to justify a refusal”.

Included in the Equality Act, the legislation BVRLA means that rental Guide to Age Discrimination companies will no longer be able to restrict rental services because of a customer’s age.

The BVRLA advises rental members to take the following steps to help ensure their compliance with the legislation:

The guidance, which is now available to download from the BVRLA website, provides members with statistical evidence to help them justify a decision to limit who they rent to based on age. It includes a set of frequently asked questions covering the likely scenarios members will face. “Despite making a very strong case that this new regulation would add costs and safety risks for our sector, the government has refused our request for an exemption,” said Jay Parmar, BVRLA legal and policy director.

❱ Review the BVRLA Guide to Age

Discrimination (downloadable here). ❱ Ensure that your policies can be defended using your own data or the data from the BVRLA guide. ❱ Talk to your insurance provider about any age restrictions that may exist on your policy. ❱ Train your staff so they understand what your policies are and what they should be saying to customers. n BVRLA members with questions on age discrimination may contact Jay Parmar. Contact Jay Parmar, jay@bvrla.co.uk 01494 545706

Consumer body endorses impartiality of European Car Rental Conciliation Service The European Car Rental Conciliation Service (ECRCS), which is managed by the BVRLA, has passed a test of its fairness in resolving cross-border rental transactions.

January and June 2012. Having selected five of these to examine in detail, it concluded that all the decisions by the ECRCS were fair and that each case met all the pre-agreed conditions of the audit.

In July, the UK European Consumer Centre, an advisory body co-funded by the UK government and the European Commission, was invited to audit the objectivity and independence of the ECRCS.

The ECRCS has seen a sharp rise in complaints referred for conciliation this year – only 38 were investigated in the same period in 2011. This is due to increased consumer awareness of the service, and the launch of its dedicated website earlier this year. n

The UK ECC was provided with a full list of the 139 complaints investigated by the ECRCS between

The ECRCS website can be found at: www.ecrcs.eu 3

Workshop will explain DVLA services The Driver and Vehicle Licensing Agency and the BVRLA will be jointly hosting a workshop on 2 October to discuss the planned changes to DVLA services from next year. The workshop provides an opportunity for members to see how the proposals would affect their day-to-day business operations. The key changes are:

❱ V5C suppression

This service will allow fleets registering a new vehicle to receive an electronic file of vehicle data instead of the vehicle registration document (V5C). If a paper V5C is required, fleets will be able to request one from the DVLA. ❱ Bulk electronic relicensing Fleets will be able to relicense vehicles on a bulk basis, regardless of their age, type or tax class. ❱ Other services Bulk notification that a vehicle is off the road (SORN) or disposed of; changes in processes for vehicles registered in Northern Ireland; and a new process for the transfer of cherished numberplates between vehicles. The BVRLA believes that it is vitally important that these proposals work for all rental and leasing firms and the vehicles they operate.

The DVLA is also considering issuing the first tax disc directly to the registered keeper rather than the motor dealer. This provides considerable cost savings for the DVLA and motor dealers, but the BVRLA is concerned with the impact it would have on leasing and rental firms. The BVRLA is in discussion with the DVLA on a solution which would see the tax disc being sent directly to the dealer. “Our advice to members is to start planning now for these changes and make sure you have a DVLA fleet code, as this will allow you to access the new services being offered from the DVLA,” said BVRLA legal and policy director Jay Parmar. “The changes are designed to reduce the burden the DVLA’s administrative processes have placed on our members and it is vital that we ensure this objective is achieved by working with the DVLA to ensure the estimated £10m cost savings for members are delivered.” n Members interested in attending the workshop should inform legal and policy executive Amanda Brandon. Contact Amanda Brandon, amanda@bvrla.co.uk 01494 545701

Fleet codes

Firms operating a fleet of more than 50 vehicles* from one address are eligible to join the fleet scheme. Those joining are allocated a six-digit fleet code number that will enable them to benefit from the new services the DVLA will introduce next year. This code is also required in order to be alerted to vehicles in a scheme member’s fleet that are not on the motor insurance database. (See Continuous Insurance Enforcement – BVRLA Fact Sheet 585.) Other advantages of the scheme are:

❱ Vehicle licence renewal reminders

will be sent in bulk at least four weeks before the licence renewal date. ❱ New registration documents will be sent in bulk. ❱ Telephone access to a dedicated fleet team to answer queries. ❱ Address changes on vehicle registration documents can be handled in bulk. Further information can be found on the BVRLA website: www.bvrla.co.uk * (the number of vehicles required is under review)

Redefinition of finance leases would mean VAT hike The BVRLA is in discussions with HM Revenue & Customs over a recent European Court of Justice ruling that could affect the way finance leases are treated for VAT purposes. The association understands that HMRC has taken legal advice and developed an initial view that the ruling might require it to change its current policy on finance leases, which would see them being treated as supplies of goods rather than services. This would have a significant impact on members offering finance leases. Most significantly, lessors would be required to account for VAT on the 4

entire value of a finance lease deal at the inception of the lease contract. Currently, VAT is accounted for in relation to each instalment or as individual invoices are raised. Under the new interpretation, VAT recovery would be blocked in full and, as a result, the customer would not pay VAT on a monthly rental. Due to the fundamental differences in the way finance leases are packaged in the UK and mainland Europe, there is still a lot of uncertainty over whether HMRC’s initial view is correct; the BVRLA is working with tax experts and its members to ensure the UK leasing industry is fairly represented.

“It is too early to say whether anything will change,” said BVRLA chief executive John Lewis. “However, if this new treatment is introduced, we will lobby to ensure that it is only applied to new leases and not retrospectively. This ruling does not affect operating leases, which could become more attractive to some companies should HMRC change its VAT rules on finance leases.” n For further information, or to comment on this issue, contact BVRLA legal and policy director Jay Parmar. Contact Jay Parmar, jay@bvrla.co.uk 01494 545706 BVRLA News | August/September 2012

Whole vehicle type approval: cost and delay The BVRLA is urging members to talk to their vehicle supply chain and customers in the run up to the introduction in April 2013 of whole vehicle type approval for light commercial vehicles weighing up to 3.5 tonnes. It is concerned that this could result in longer and more costly build times for modified vehicles, with operators facing penalties if the process is not handled properly, and delays for their customers. European Community Whole Vehicle Type Approval (ECWVTA) is a legal requirement for all EU countries to have a common process for approving

new goods and passenger vehicles and trailers. Once an initial ‘type’ of vehicle is examined and the production arrangements are assessed as meeting Conformity of Production requirements, more vehicles of this type can be manufactured and sold without the need for further inspections or testing. There are different forms of approval depending on the volume of vehicles being made. Rental and leasing firms may be impacted where customers require a van or truck to be modified with a tail lift, crane or larger step, for example. This type of modification will require a vehicle to be approved at each stage of the build process.

“Short-term rental customers in particular will need to factor in the time and cost implications of this new regime if they are looking for very specific types of vehicle modifications,” said BVRLA chief executive John Lewis. “Rental and leasing companies must also make sure that they are kept informed of any modifications their customers make to their vehicles. They should probably put a new clause in their rental and leasing contracts.” n Further information can be found in Whole Vehicle Type Approval (BVRLA Fact Sheet 577), downloadable here.

VOSA test data by email: just for BVRLA members Do you own and manage minibuses or goods vehicles over 3.5 tonnes gross vehicle mass, or trailers? Would you like to be able to obtain annual test results for these vehicles electronically, direct from the Vehicle and Operator Services Agency (VOSA)? If so, you should sign up for the Test History Report Service, exclusively for BVRLA members. For the first time, this will allow you to get an accurate

picture of ALL your commercial vehicles, no matter where they are tested, who prepared the vehicle, or how the test is paid for. To register for the service, simply email mytestreport@vosa.gsi.gov.uk with your contact details. VOSA will then send you a registration form and details of how the service will operate. You will need to have secure file transfer software to submit your vehicle details to VOSA, which will provide guidance

on the format of files for submission. You will then be able to submit details of your vehicles to VOSA once a month (or less frequently, if preferred). A report of their test results will follow by email. n For further information about the service, contact legal and policy executive Amanda Brandon. Contact Amanda Brandon, amanda@bvrla.co.uk 01494 545701

Operators urged to buy Euro V trucks while they can Operators planning to buy Euro V trucks before the introduction of trucks meeting the Euro VI emission standards are being urged to act now. Previously, the introduction of new vehicle legislation has resulted in a surge in truck sales as operators bring purchases forward to avoid paying a premium for newer technology. Sales rose 10% in the years before the Euro III and Euro IV standards came in, but manufacturers are warning that there may be less stock available next year in the run up to the 2014 deadline for the introduction of Euro VI trucks. Mercedes, DAF and Iveco have all BVRLA News | August/September 2012

warned that vehicle lead times will rise in 2013 and that operators will need to order Euro V vehicles by Spring to be sure of getting them. “We plan to make Euro V models for as long as possible in 2013 and availability should be good,” said Geoff Tyler, sales manager at DAF Trucks. “However, it is a very good idea to start planning fleet replacement programmes now as lead times could go out towards the second half of 2013 and operators need to secure build slots.” BVRLA members are also advised to start warning customers about the potential impact of Euro VI vehicle technology when it does arrive.

Manufacturers are having to make substantial changes to engines and exhaust systems in order to meet Euro VI standards and, as a result, the new trucks are likely to be around 10-12% more expensive than their Euro V predecessors. Fuel efficiency is not expected to be any worse, but maintenance costs may increase and payloads could be slightly reduced. The UK has a Reduced Pollution Certificate scheme for Euro VIcompliant vehicles, which offers a saving of up to £500 a year for a maximum-weight vehicle. However, this scheme will end in December 2016, limiting the total saving obtainable by operators. n 5

Golf Day: the hole story

6

BVRLA News | August/September 2012

Used cars: what are the market trends? BCA’s Used Car Market Report 2012, edited by Professor Peter Cooke of Buckingham University, pulls together data on car ownership and new and used vehicle sales to give a valuable snapshot into the prospects of this market. Here are some highlights.

It concludes that the shortage of company car disposals has combined with a wider shortage of younger used cars: the overall car parc of vehicles aged under five years is around 2.5 million less than it was in prerecessionary times. BVRLA Comment With cost-conscious car buyers increasingly targeting younger used cars instead of new ones, the wellmaintained, high-quality ex-fleet vehicles supplied by our sector should maintain strong residual values for years to come. It will become even more important for dealers and other used car outlets to obtain a good supply of these vehicles. Light Commercial Vehicles LCV sales have fallen sharply since 2007, despite a rebound of sorts in 2010 and 2011 that the report attributes to major rental and utility fleets replacing over-age vehicles. Sales look like falling back again in 2012 and Professor Cooke predicts that this will create a shortfall of BVRLA News | August/September 2012

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Car ownership trends

Although car ownership remained steady, with seven out of ten families owning a vehicle, the report found a reduction in multiple car ownership. The number of multiple car households fell from 29% in 2011 to 27% in 2012 (the figure was 31% in 2008). Households with three or more cars fell to 5% from 8% last year.

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Since the start of this year, however, company car disposals in the three to five-year group have reflected recent much lower fleet and business new car volumes. In 2009 these fell by some 350,000 units to 980,000 and have recovered little since. The report says this will see company car disposals in this key age sector drop substantially in the next two to three years. They will remain some 100,000 units lower than the peak of 520,000 reached in 2008 until the fleet and business new car market stages a recovery.

5 49

Thousands of units

Cars The report says that the full impact of the sharp and prolonged fall in new car volumes has yet to fully hit the used car market. The number of company car disposals is said to have held up well until the end of 2011, fuelled by record fleet and business registrations, which averaged 1.34 million units in the five years leading up to 2007.

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UK new LCV registrations; 2000-2013 375,000 younger used vans between 2008 and 2013. He says that this will hit hard in 2013 and 2014, especially if the economy begins to recover.

wider economy and we would expect this shortfall in the supply of ex-fleet vans to be exacerbated as we move out of recession. n

BVRLA Comment Used van prices remained strong despite the rebound in the new van registrations in 2010 and 2011. The van market is a great indicator for the

The Used Car Market – A Report by BCA, edited by Professor Peter Cooke of Buckingham University’s Centre for Automotive Management, can be downloaded here. 7

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❱ Effective call management ❱ Setting customer service objectives If, like billions of people, you saw the opening ceremony of the London 2012 Olympics, then you may have glimpsed the BVRLA’s own Fran Hampson. Our member services sales administrator took a break from VE103s and training events to perform as one of the dancers in Danny Boyle’s ‘Isles of Wonder’ extravaganza, following months of dedicated training. We are hoping she will repeat her routine at the next Annual Dinner!

BVRLA Events Insurance Conference

Stratford-upon-Avon

Meet the BVRLA

Leeds/Bradford

Technical & Operational Management Forum Dordon, Warwickshire

18 Sept 3 Oct 1 Nov

Residual Value and Remarketing Forum

Heritage Motor Centre

22 Nov

BVRLA Industry Conference

Heritage Motor Centre

29 Nov

BVRLA Annual Dinner 2013

London Hilton on Park Lane 7 March

For enquiries about BVRLA forums, seminars and conferences, and to book places: contact member services sales administrator Fran Hampson: fran@bvrla.co.uk, 01494 545703 For enquiries about the BVRLA Annual Dinner, and to book places: contact membership administrator June Dyer: june@bvrla.co.uk, 01494 545714

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BVRLA News | August/September 2012

City & Guilds Rental Operator Skills Certificate

8 November This nationally recognised qualification is awarded for knowledge of vehicle operations and best practice. The BVRLA administers the accreditation in conjunction with the City & Guilds awarding body, with written examinations held annually at test centres across the UK. Aimed at rental agents and managers in daily rental and light commercial vehicle rental. Download an application form here.

Full details of all BVRLA events can be found on the association’s website: www.bvrla.co.uk

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