BVRLA News, February/March 2012

BVRLA News

www.bvrla.co.uk February/March 2012

The newsletter of the British Vehicle Rental and Leasing Association

Why penalise leasing?

The BVRLA is calling for an urgent meeting with HM Treasury to find out why the leasing industry is set to lose its ability to claim 100% first-year allowances on the purchase of lowemission cars.

In the Budget it was announced that the 100% first-year allowance would be extended for two years to 2015, with the qualifying threshold reduced from 110g/km to 95g/km, but that leased business cars would no longer be eligible.

“We need to understand why the government has rescinded first-year allowances for our industry,” said BVRLA chief executive John Lewis. “This measure discriminates against leasing companies and could result in fewer low-emission cars being purchased for fleets.”

The association also wants to give the government feedback on its decision to introduce a non-retrospective cut in the carbon dioxide emissions threshold for capital allowances in April 2013, from 160g/km to 130g/km.

“The fleet industry coped with the introduction of the 160g/km capital allowance threshold when it was introduced in April 2009 – maybe too well,” said Lewis. “We saw fleets rapidly lowering their emissions and tax bills at the same time.

Now the government is trying to claw some

of that money back. This does seem a bit of a sudden knee-jerk reaction. In future we would like to get more than one year’s notice so that companies have a decent amount of time to review policies.”

BVRLA member fleets are already averaging towards 130g/km or less, and there is no shortage of cars available that undercut this new threshold.

However, the association is expecting a spike in demand for sub-130g/km and sub95g/km business cars from April 2013 and wants manufacturers to set their production cycles now to avoid any supply issues.

Elsewhere in the Budget, the government answered two of the BVRLA’s lobbying calls – abolishing the 3% diesel company car tax supplement from 2016 and introducing fiveyear signposting on future company car benefit-in-kind tax emissions bandings.

However, the BVRLA regards the decision to eliminate the company car tax exemption for electric cars from April 2015 as a huge mistake.

“This measure could kill the electric car market stone dead,” said Lewis.

“Manufacturers will have to introduce major price cuts if they don’t want to be left with forecourts full of electric white elephants.” n More Budget detail at www.bvrla.co.uk

The annual general meeting of the British Vehicle Rental and Leasing Association Ltd will be held at 9.30am on Thursday, 17 May, 2011 at the association’s offices at River Lodge, Badminton Court, Amersham, Bucks HP7 0DD for the following purposes:

Annual general meeting

❱ ❱ ❱ ❱ ❱ ❱

To receive the Chairman’s report.

To receive the report of the Committee of Management.

To receive the report of the auditors.

To elect the Committee of Management.

To elect auditors and arrange their remuneration.

To agree revisions to the association’s Articles of Association: to include a new membership category to cover rental brokers; to incorporate new standards for directors to declare related party relationships.

By order of the Committee of Management. John Lewis, Chief Executive

In this issue Updated fair wear and tear guide on sale A thoroughly revised BVRLA fair wear and tear standard for cars returned at the end of a lease is now available page 3 Don’t miss out on the used vehicle boom Franchised dealers are keen to find quality oneto-five-year-old stock – it’s a great opportunity page 5 What does it take to be Fleet No 1?

Volkswagen bosses Simon Thomas and Vince Kinner share the secrets of their success page 6 The Big Event: BVRLA Annual Dinner 2012 What do you mean you weren’t there?

See what you missed in our photo-report on the best evening of the industry’s year page 8 Stats show 50:50 split in dispute resolution Read about the top complaints and how to avoid them page 12

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Comment Updated fair wear and tear guide now on sale It had to happen sooner or later.

The government has woken up to the fact that business fleets have been a little bit too successful in lowering their emissions and their tax bill.

The BVRLA’s newly revised Industry Fair Wear and Tear Standard for Drivers of Leased and Financed Cars is now on sale.

Treasury tax revenues have been falling and now the penny has dropped. Some ambitious new emissions targets are set to challenge our industry from April 2013.

Published in February, the fair wear and tear guide incorporates the results of a major overhaul conducted last year by a specialist group of BVRLA members and independent market experts.

Its aim is to describe the acceptable condition for a car returned at the end of a lease.

But we have been here before and we have already proved that, with some clever fleet management and a supply of ever-more fuel-efficient vehicles, we can give the beancounters at the Treasury a run for their money.

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 Kevin McNally Honorary Treasurer Brian Back Chief Executive John Lewis

BVRLA News | February/March 2012

The guide also explains what customers should expect when they return a vehicle, addresses end-of-lease charges and sets out how, in the event of a dispute, the BVRLA’s conciliation process works.

What’s new in the 2012 version? ❱ More detail on vehicle handover, including safety aspects of the pickup driver returning to base, eg the vehicle’s management system must not display any warning lights.

❱ There should be sufficient fuel

– or battery charge, in the case of an electric vehicle – for the vehicle collection to take place.

❱ In the event of a dispute, customers of BVRLA members have the right to pay for an examination of the evidence. If the examining engineer

finds in favour of the customer, the BVRLA member will refund the cost of the examination to the customer.

❱ Scuffs totalling up to 50mm on

the total circumference of the wheel are now deemed acceptable (the previous limit was 25mm).

❱ Tyres should now

comply with manufacturer recommendations on ‘class’, reflecting that from November 2012 tyres will be classed according to fuel efficiency, wet grip and noise.

❱ A self-appraisal checklist to help customers assess their own vehicle before return.

The digital version of the BVRLA fair wear and tear guide licensed to members will be updated in the next few weeks. n To purchase printed copies of the guide, download an order form here.

For information about licensing a digital guide, contact member services sales administrator Fran Hampson.

Contact Fran Hampson, fran@bvrla.co.uk 01494 545703

Experts to answer low-carbon questions The BVRLA has assembled a group of experts and practitioners to discuss the real-life impact ultralow-carbon vehicles have on fleets.

The panel will hold a Question Timestyle debate to round-off the EV & Low CO2 Fleet Show at Silverstone on 18 April. It will enable visitors to pose any questions arising from the earlier seminars, test-drives and exhibition.

Chaired by BVRLA chief executive John Lewis, the panel will include

Rob Anderson, programme and communications manager, Cenex; Chas Ball, chief executive, Car Plus; Richard Bruce, managing director, Office for Low Emission Vehicles; and Justin Shaw, fleet director, Europcar.

“The experts I will be talking to are either running electric and hybrid vehicles or playing a major role in trying to increase their uptake by fleets,” said Lewis. n Details: http://evfleetshow.co.uk 3

In brief MOT test frequency won’t change The government has dropped its plans to change the frequency of MOT tests and will instead concentrate on improving testing standards and cracking down on clockers. It wants testing stations to take up industry codes of practice and will make it easier for motorists to double-check vehicle mileage provenance.

“The once-a-year-after-three-years model works perfectly well for cars and vans as long as test centres do their job properly,” said BVRLA chief executive John Lewis. “Our only disappointment is that the government didn’t listen to our calls for safety recall notices to be made an MOT criterion. It is ridiculous that a car can pass its MOT while having an outstanding safety recall notification that hasn’t been dealt with. We would also urge the government to go further in clamping down on clockers by introducing some sort of licensing system for mileage adjustment companies.”

Don’t miss out on this great used vehicle boom

by John Lewis It is not only vehicle manufacturers that are in love with the leasing and rental sector at the moment – franchised dealers are wooing BVRLA members and loitering around auction halls, desperately seeking some quality one-tofive-year-old stock to grace their forecourts.

The great used vehicle supply gap is finally upon us. Supply and demand is one of the oldest and simplest of all economic models, and also one of the most powerful. Between 300,000 and 450,000 fewer new cars have been registered each year since 2007, while the number of new vans has dropped by 70-150,000. The supply of young used cars and vans is beginning to feel the pinch.

Fleet Forward Planner launches The BVRLA has produced a new timeline of impending legislation and events that will affect members.

Among the issues arising in 2012 are age discrimination and the Equality Act, CO2 reporting and tyre labelling.

BVRLA members can access the Fleet Forward Planner here.

Meet the BVRLA

BCA’s auction site at Belle Vue, Manchester, will be the venue for a ‘Meet the BVRLA’ session on the evening of Wednesday 23 May. BVRLA chief executive John Lewis and chairman Neil Cunningham will be explaining the work of the association.

It is an opportunity for BVRLA members to meet their representatives in the association and to network.

The event will commence at 6.30pm and close with a buffet at around 8pm.

If you would like to come, contact head of member services Nora Leggett.

Contact Nora Leggett, nora@bvrla.co.uk 01494 545713 4

John Lewis

they achieve when disposing of their vehicles. There is a real opportunity to streamline the whole disposal process by selling direct to dealers or consumers and investing more in the online sales channel. It can be more expensive to sell vehicles online, but early reports from the auction industry suggest that you can also achieve higher prices from internet buyers.

It is also worth focusing even further back in the remarketing process and improving the vehicle returns process to make it more transparent for customers. The growing number of end-of-contract complaints referred to the BVRLA conciliation service suggests that by improving their customer care members could remove much of the cost and time associated with getting vehicles ready for the used market.

There is a real opportunity to streamline the whole disposal process by selling direct to dealers or consumers.

You don’t have to be a Harvard Business School graduate to work out what this means. Used vehicle car and van prices will, at the very least, remain pretty solid this year. If we can avoid a Eurozone meltdown, oil crisis or any other economic catastrophe then prices should rise. In fact, high oil prices and a general squeeze on consumer budgets will benefit our sector because they will focus usedcar buyers’ minds on finding cars that are cheap to run. Fuel is the main criterion here and our industry produces the most fuel-efficient used cars.

The BVRLA will be doing its utmost to help members take advantage of 2012’s used car and van market opportunity. Our Residual Value and Remarketing Forum will continue to offer members the latest market analysis and expertise.

This year is not just an opportunity for BVRLA members to improve the prices

John Lewis is chief executive of the BVRLA.

We will encourage more dealers to spot the fuel-efficient opportunity our members’ vehicles present. And we will work with the auction houses to ensure that their plans to introduce a universal grading system work in the interests of used vehicle sellers as well as buyers. n

BVRLA News | February/March 2012

Study shows electric vans are still too costly A month after announcing the first electric vans to qualify for its Plugin Van Grant, the government has published a report suggesting it doesn’t make economic sense for businesses to run them.

The Ultra Low Emission Vans study, commissioned by the Department for Transport, examines the market potential for ultra-low emission van technologies, including pure electric vehicles (EVs), plug-in hybrids and hydrogen fuel-cells.

However, the report’s authors warn the government that such incentives will need to be sustained over the long term and supplemented with extra ones including exclusive access to certain loading bays, extended delivery hours and use of bus lanes.

They also suggest that van manufacturers should provide guaranteed buy-backs and fixed-price servicing to help de-risk the investment required to run the vehicles.

“The government has put its money where its mouth is by delivering the Plug-in Van Grant and other tax incentives, but they need to give operators confidence that these will be more than just short-term measures,” said BVRLA chief executive John Lewis. “And van makers must join the party. Rather than relying on government grants to discount their vehicles, they need to produce some serious price cuts. Their current business model doesn’t work.” n

The report’s authors, Element Energy, concluded that:

❱ The current cost of ownership for

large pure electric vans is more than 50% higher than for their dieselengine equivalents.

❱ 10% is the maximum cost of

ownership premium that van operators are willing to accept – with most unwilling to pay any.

❱ Using government oil price

projections, pure electric vans will still have a 10% cost of ownership premium over diesel in 2030.

The report was carried out prior to the introduction of the Plug-in Grant for vans. Nor do its cost of ownership calculations take account of incentives such as the London Congestion Charge exemption.

BVRLA welcomes ‘overdue’ lorry road user charging The BVRLA has welcomed plans to make foreign hauliers pay for their use of UK roads.

However, the association is concerned that the government’s proposals for a lorry road user charging scheme will still result in extra costs for some UK operators.

UK and foreign hauliers will face a charge of around £10 per day for lorries of 12 tonnes or over, with the government planning to compensate domestic operators with a reduction in BVRLA News | February/March 2012

their Vehicle Excise Duty. Due to the minimum VED rates set out in EU law, a small minority of UK hauliers will still end up out of pocket.

The Department for Transport estimates that 6% of the current UK fleet of heavy goods vehicles will pay up to a maximum of £79 more per year, resulting in extra costs of around £500,000 for the whole industry.

“This scheme is long overdue and will help improve the competitiveness of UK logistics companies,” said BVRLA

chief executive John Lewis. “But we want to see some evidence that the Vehicle and Operator Services Agency will be given adequate powers and resources to enforce this charge.

“We also need some assurances that the government will not let the extra costs faced by UK hauliers rise in future years. Half a million pounds is already too much.” n Further information can be found in the ‘Lobbying and Campaigns’ section of the BVRLA website.

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BVRLA News | February/March 2012

BVRLA News | February/March 2012

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The rental and leasing industry came out in force again in March as the London Hilton on Park Lane played host to the BVRLA Annual Dinner. Around 900 members and their guests were present to help the association celebrate its 45th anniversary with the usual mix of great food, fine wine and a barnstorming array of entertainment.

As usual, there was something for everyone, whether it was the witty, observational comedy of former accountant Fred MacAulay, the stupendous prestidigitation of Magic Singh and his colleague Daniel Reed, or the heart-warming sight of over ÂŁ11,000 being raised for automotive charity BEN. 8

The ‘Big Event’ also made no apologies for being a business event.

After a rousing introduction from BVRLA chairman Neil Cunningham, the association paid tribute to some of the industry’s unsung heroes.

This was capped-off by an inspiring call to arms from business champion Lord Digby Jones. As usual, the event also presented an unparalleled opportunity for networking, which duly continued into the early hours…

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BVRLA News | February/March 2012

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The BVRLA’s conciliation service is busier than ever: learn how to avoid it!

Increasing awareness of the BVRLA conciliation service among members and their customers contributed to a big surge in cases handled during 2011.

There was a 34% increase in complaints compared to 2010, which the association believes is largely due to the conciliation service becoming more widely publicised, both on the internet and in the media. There was also an increase in the number of complaints referred to the BVRLA by members who were unable to resolve them internally.

In 2011 48% of complaints against rental companies were upheld – a very similar percentage to 2010.

Initially, complaints against leasing companies appear comparable, with 41% being upheld. But there has actually been a steep upward trend in the percentage of compaints upheld, rising from 12% in 2010.

Each year a small percentage of complaints are either withdrawn or resolved amicably before the conciliation service makes a ruling.

Around 60% of all customers who responded to a feedback survey thought the conciliation service was either very good or good. n Further information about the BVRLA’s conciliation service can be found here.

Contact Sallie Catchpole, sallie@bvrla.co.uk 01494 545715

Complaints

- and how to avoid them!

In 2011 the BVRLA received 425 complaints concerning rental or leasing in the UK.

End-of-rental damage

Customers dispute responsibility for end-of-rental damage.

The top five were:

By encouraging customers to fully inspect the vehicle on collection there should be fewer disputes about preexisting damage. When returning a vehicle, customers could be advised to wait until the post-rental inspection has taken place to ensure agreement on new damage.

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Customers dispute what they believe is fair wear and tear at the end of their lease period.

Customers complain that the process for collecting and inspecting their vehicle was not explained to them, and they were not made aware of the potential charges when they signed the collection report.

End-of-lease charges for damage

Complaints could be avoided if customers were made fully aware of the return standard shortly before the vehicle was collected. Providing photographs of the acceptable standard would avoid confusion.

2

Charges for additional rental products

Customers believe they were not made aware that they were agreeing to purchase additional products such as a Super Collision Damage Waiver.

If the rental agent takes the time to explain to customers all the additional charges on the rental agreement and, if possible, provides a rental agreement in the customer’s own language, customers should know exactly what they are paying for.

Summary of complaints 2011 A total of 425 complaints were investigated by the BVRLA (34% up on 2010)

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3

End-of-lease collection process

Details of the collection process could be sent to the customer before the collection date, along with the return standard.

5

Transparency of excess liability on rental

Customers feel that the excess amount was not made clear when they reserved their vehicle.

Complaints could be avoided if the excess was shown prominently on the website or quoted during telephone bookings. This would give the customer the opportunity to consider purchasing optional excess reduction at the rental desk.

2010 Statistics 318 total complaints

208 rental member complaints (54% increase on 2010)

135 rental complaints

207 leasing member complaints (18% increase on 2010)

176 leasing complaints

10 leasing broker complaints (43% increase on 2010)

7 leasing broker complaints BVRLA News | February/March 2012

High-risk renter database sets record for users and incidents 2011 was a record year for the BVRLA’s RISC Online rental risk database, with both the number of subscribers and user activity reaching new heights.

The number of positive matches identifying high-risk renters rose by 70% in 2011, and the number of reported incidents rose by 135%.

With incidents covering everything from vehicles returned in poor condition to unrecovered debts and stolen vehicles, the implications of dealing with a previously unknown renter can be costly.

Following a concerted effort to grow the RISC community in 2011, the BVRLA saw the number of subscribing daily rental member companies

double over the year to more than 40. A RISC User Group was formed as part of that effort, meeting for the first time in October 2011. The group is scheduled to meet three times a year to consider ways to improve the service and is open to all subscribers of RISC. As the user community continues to grow, the BVRLA expects to see RISC Online play an even more significant part in the industry in 2012. n For further information about RISC Online and details of RISC User Group meetings, contact member services administrator Rob Burford.

Contact Rob Burford, robert@bvrla.co.uk 01494 545702

BVRLA Events EV & Low CO2 Fleet Show

Silverstone, Northants

18 April

Asset Management & Risk Control Seminar

Blake Lapthorn, Oxford 24 April

LowCVP Conference: Low Carbon Road Transport

ExCel, London

Technical & Operational Management Forum

Venue to be confirmed

5 July

Residual Value & Remarketing Forum

Venue to be confirmed

12 July

BVRLA Golf Day

Frilford Heath Golf Club

6 Sept

BVRLA Industry Conference

Heritage Motor Centre

29 Nov

10 May

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 Golf Day and Annual Dinner, and to book places: contact membership administrator June Dyer: june@bvrla.co.uk, 01494 545714 Full details of all BVRLA events can be found on the association’s website: www.bvrla.co.uk

New members Rental Co-op Motors Corrigans Just Go Winner Vehicle Rentals

(Kettering) (Dungannon) (Flamstead) (Worthing)

Leasing Premier Vehicle Rental Ltd (Liverpool)

BVRLA News | February/March 2012

Training Certificate in Fleet Consultancy

12-13 September & 7-8 November Amersham Our four-day course, delivered in two two-day modules, is aimed at sales executives and account managers who want to strengthen their business relationships with clients.

The programme allows delegates to gain insights into the decision making processes within businesses. Our objective is to increase understanding of the issues those organisations face, covering procurement, human resources, finance, tax, corporate responsibility and road-related health and safety. We focus on understanding the marketplace and take considered views of the legal and legislative influences on the industry. Delegates come away with a professional qualification, too, as the programme is accredited with the Institute of Leadership & Management.

Revamped at the end of 2011, the course now includes an overview of the new vehicle marketplace, trends in private, business and fleet registrations, and light commercial vehicles. We also cover the market share of the different methods of acquisition, and the organisations and initiatives that drive development of the marketplace. Most importantly, we allow plenty of time to cover the various fleet funding options.

Further information can be found on the BVRLA website To book places, contact: Fran Hampson, fran@bvrla.co.uk 01494 545703

Associate

IT Fleet Automotive

Established for over 10 years in Raydon, Essex, employing over 50 body shop staff and more than 150 trade plate drivers – and with a second office in Longbridge, Birmingham – IT Fleet Automotive manages the used car programmes of several major fleets. Its activities cover transport, vehicle refurbishment, fleet management and auction sales. These are complemented by its ‘Fleet Plus’ web-based systems which create bespoke electronic appraisals and help inventory management by making details of completed collections available online, including calculations for fuel use and repair costs. www.itfleet.co.uk

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