www.bvrla.co.uk October/November 2011
The newsletter of the British Vehicle Rental and Leasing Association
Insurance Taskforce sets out message of self-help Self-drive hire insurance premiums are likely to fall from their current high levels – but it is hard to say when, or by how much. In the meantime, the rental sector needs to work on lowering its risk profile.
back on what they perceive as ‘high-risk’ business. If a rental company is located in an insurance fraud hotspot it is likely to encounter problems. It is believed that ‘cash for crash’ schemes cost the insurance industry around £350m a year.
That was the conclusion of the first Insurance Taskforce meeting held by the BVRLA, which was attended by the Association of British Insurers (ABI), and representatives of the insurance broker sector and vehicle rental industry. Attendees were told that underwriters of the fleet insurance market had not made a profit since 1994. Instead, fleet insurers had relied on investing premiums to generate income – a strategy that has become unsustainable given the turmoil that has hit global stock markets.
The ABI said that the rates charged for replacement vehicles and prolonged credit hire periods were also pushing up insurers’ costs and premiums.
“By getting a better understanding of the market, we hope to come up with some ways of improving the supply of self-drive hire insurance and lowering premiums,” said BVRLA chief executive John Lewis. “As an industry we can’t just sit by and watch rental companies closing down because they can’t find or afford insurance.”
At the same time, the association wants to develop guidance to help members lower their future risk profile and demonstrate this to potential insurers.
While some insurers have pulled out of the self-drive-hire market, others will only deal with existing customers or have cut
The BVRLA agreed to work with the insurance industry to help lobby for changes in the personal injury compensation system. It is also going to try and educate insurers about how the vehicle rental industry works and the steps already being taken to reduce risk – by using the association’s RISC online database, for example.
“We have to accept that the insurance environment has changed and premiums are unlikely to fall to former levels any time soon,” said Lewis. “But I believe there are measures we can take to make the rental industry a more attractive market for insurers.” n
The BIg Event: BVRLA Annual Dinner 2012 Business champion Lord Digby Jones and comedian Fred MacAulay will entertain guests at next year’s BVRLA Annual Dinner. Taking place on 8 March 2012 at the London Hilton on Park Lane, the dinner is set to be the social highlight of the year for anyone involved in vehicle rental or leasing. The BVRLA will also recognise the efforts of another set of Industry Heroes – read more inside. Further information and a booking form can be downloaded here
In this issue BVRLA calls for clearer, simpler car tax The company car tax regime needs an urgent update, the BVRLA will tell Treasury Minister Chloe Smith page 3 Licence checking service starts work The BVRLA has launched a new, easyto-access, low-cost, overnight driving licence checking service page 5 Hitachi Capital ideas Hitachi Capital Vehicle Solutions runs three electric vehicles and has supplied 16 more. Head of pricing Chris Shore shares his EV experiences page 6 Fleet profile: Citroën Citroën is hoping its stylish DS line will prove popular with userchoosers and get it back on fleet choice lists page 8 Fleets Backing BEN How is automotive industry charity BEN’s used car donation scheme doing 18 months on? page 9
— Promoting responsible road transport since 1967 —
Comment BVRLA calls for clearer, The used car market has been a very welcome oasis of stability during the ongoing economic turmoil. Fleet vehicle residual values remained strong throughout Summer and Autumn and are resisting the usual seasonal decline before Christmas. This is hardly surprising considering the continuing slump in retail sales of new vehicles, which has hit the supply of used stock and led to dealers buying more ex-fleet vehicles to sit on their forecourts. Things can change, but for now it is probably safe to ignore some of the messages coming from the remarketing sector trying to talk down used vehicle prices. This will be the last issue of BVRLA News this side of Christmas. See you in 2012!
Editor Toby Poston, email@example.com 01494 545700 Production Manager Steven Prizeman, firstname.lastname@example.org 01494 545710 Advertising Nora Leggett, email@example.com 01494 545713 © Copyright BVRLA 2011 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 firstname.lastname@example.org W 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 | October/November 2011
simpler car tax regime
Although it has proved to be very effective in reducing fleet emissions, the company car tax regime needs an urgent update, the BVRLA will tell Treasury Minister Chloe Smith in November.
The provision of a three-year rolling cycle on company car tax bandings has benefited individuals and businesses, but with more vehicles being leased on four-year terms, the BVRLA will urge HM Treasury to publish rolling company car tax bands for at least five years so that fleets can make informed choices. As well as providing more tax certainty for fleets, the association will also call on the Treasury to complete the job of making the company car tax system technology neutral. It has removed many of the complicated penalties and discounts for using specific fuels, but the BVRLA believes that it should go further and eliminate the 3% surcharge on diesel cars.
“Apart from protecting the Exchequer, we can see no other justification for retaining this outdated penalty,” said Jay Parmar, BVRLA legal and policy director. “Diesel cars are more fuel-efficient and, in many cases, as clean as their petrol equivalents. The government’s justification for retaining this will be further weakened by the introduction of hybrid-diesel cars.” The tax treatment for electric vehicles used for business is complex and the BVRLA believes the legislation here also needs updating. For example, electricity used in EVs is not classed as fuel for company car fuel tax and there is still an unanswered question of what P11D value will be used for an EV where the battery is leased and not sold with the vehicle. Finally, the BVRLA will also be adding its weight to calls for the Treasury to abandon its planned increase in fuel duty and to introduce a fuel price stabiliser as a matter of urgency. n
LEZ rules create rental opportunity The BVRLA is helping its rental members to take advantage of new London Low Emission Zone (LEZ) standards being introduced from next year. It is issuing a marketing pack that will help rental companies to rent vans, minibuses and trucks to operators whose current vehicles will not meet the LEZ standards and will therefore face stiff financial penalties if taken into Greater London. Transport for London (TfL) estimates that the operators of 75,000 HGVs, buses and coaches, and 72,000 light commercial vehicles (LCVs) and minibuses could be caught out by the new standards which come into effect in January 2012. LCVs and minibuses will be brought into the scope of the zone for the first time, with owners having to meet the
Euro 3 standard for particulate matter in order to avoid a daily charge of £100. Failure to pay the charge will incur a £500 penalty. From January 2012, trucks will have to meet the Euro IV standard in order to avoid a £200 charge. The penalty will be £1,000. Vans and minibuses registered as new on or after 1 January 2002 and trucks registered as new on or after 1 October 2006 will already meet the new LEZ standards. “It is companies that make very infrequent trips to the capital that are more at risk of being caught out,” said BVRLA chief executive, John Lewis. “It might not make economic sense for them to buy a new vehicle or fit a filter but they could hire a modern, compliant van or truck for a fraction of the cost of paying the LEZ fee.” n 3
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Driving licence checking service goes live The BVRLA has launched a new, easy-to-access, low-cost, overnight driving licence checking service for members. Driver qualification checks are part of an employer’s ‘duty of care’ responsibilities. The main demand for the BVRLA’s licence checking service is likely to come from members of the association who offer fleet management services that include managing risk for drivers driving on business. Members will be able to integrate the basic driving licence data obtained via the BVRLA system into their own
enhanced services. Some of them may even be able to collaborate with their current service provider for those enhanced services while using the BVRLA’s direct link with the Driver and Vehicle Licensing Agency (DVLA).
“The DVLA is planning to abolish the paper counterpart and to remove the address from the current photocardstyle driver licence,” said Nora Leggett, BVRLA head of member services. “Both these changes will have a major impact on the daily rental industry. Our new service should be viewed as a precursor to real-time access to the DVLA database, once their systems are enabled.” n
Costing just £2.10 per licence check, after an annual £250 fee, the BVRLA hopes the new system will be affordable enough to give many members the opportunity to offer driving licence checking services for the first time.
Members wanting further information should contact Nora Leggett.
But the association believes it is not just leasing and contract hire companies that will benefit.
Contact Nora Leggett, firstname.lastname@example.org 01494 545713
It’s time to nominate your Industry Heroes of 2011 The BVRLA wants to recognise the rental and leasing industry’s most deserving staff at next year’s Annual Dinner, but we need your help! Three Industry Hero Awards will be presented at the BVRLA Annual Dinner on 8 March and the association would like members to nominate employees for their outstanding contributions during 2011. Entries are open to all BVRLA corporate members. Your candidate could be a customer service executive who has gone the extra mile, a sales person who has turned round the performance of their department or a technician who has introduced some money-saving ideas.
The winners will be selected by the BVRLA Chairman’s Committee and will be invited to the dinner as guests of the association, to receive their accolades. n To nominate an Industry Hero, just tell us in no more than 500 words why your candidate deserves recognition. Heroes: last year’s Industry Heroes, and other award winners, with Seb Coe
Our entry criteria are deliberately broad to encourage nominations for as wide a range of employees as possible. Our only stipulation is that candidates should not be senior managers.
Entries should be emailed to BVRLA News editor Toby Poston by 31 December 2011. All submissions must be approved by a senior manager at your company. Contact Toby Poston, email@example.com 01494 545700
Leading car makers sign up for BVRLA recall system As reported in the August/ September edition of BVRLA News, the association is partnering with technology company EbbonDacs to launch a free-for-members online vehicle safety recall management system in 2012. Six vehicle manufacturers have now agreed to use the system. They include Ford, Fiat Motor Group, Mazda and Chevrolet. Collectively, their fleet car BVRLA News | October/November 2011
sales in the first nine months of this year represented a share of about 18.41% of the overall market, with 285,963 cars being sold.
Fleet owners and manufacturers will test the service during its pilot stage in May 2012, and it is expected that it will be widely available from August 2012. n
Two commercial vehicle manufacturers, DAF and Scania, have also signed up to the system.
Members wanting further information should contact Jay Parmar, BVRLA legal and policy director.
In the first nine months of this year they sold a total of 9,659 trucks, a combined market share of 37.71%.
Contact Jay Parmar, firstname.lastname@example.org 01494 545706 5
Hitachi Capital ideas BVRLA members are leading the adoption of electric vehicles (EVs). Hitachi Capital Vehicle Solutions runs three EVs (two Nissan Leafs and a Citroën C-Zero) and has supplied 16 more to its customers. Its head of pricing, Chris Shore, shares the company’s experiences.
How are you using them? On a daily basis. We want to understand how these vehicles work and how to get the best out of them and have undertaken driver training to help achieve this. By understanding how to drive the cars efficiently we can pass this knowledge onto our customers. EV demonstrators are scarce so we invite our customers to try our cars when they visit our offices. We also allow them to use the charging points at our Newbury and Trowbridge offices. Running three electric vehicles also enables us to reduce our corporate carbon footprint. EVs also eliminate other tailpipe emissions, including NOx and particulates, so we are helping to improve local air quality. We encourage our staff to use the EVs when they are attending meetings, within range. Where are you seeing demand? Mostly for companies using them as pool transport. EVs are still a little too expensive for them to be embraced as company cars and range anxiety is still a problem. When they arrive, rangeextended EVs will help overcome some concerns. Vans will be the most popular choice for EVs, in my opinion. Companies 6
wanting to reduce their carbon footprint and use a van locally – for example, local councils or postal deliveries – will be able to use the vans for short journeys during the day and can charge them at the depot overnight. What sort of questions do customers have? Most of them are around running cost comparisons between an EV and an internal combustion engine vehicle. Customers want to know what the key benefits of driving an EV are and they also have questions around the tax treatment of EVs and electricity as fuel. We are still waiting for some definitive answers from HM Revenue & Customs. Charging is another area of uncertainty. Hitachi is now working with British Gas in a partnership where our customers can include home charging infrastructure with their vehicle rental. This provides the safest, fastest method of charging at home and has been well received by our customers. Do you have any unanswered questions? We need clarification from HMRC on some tax issues. How should business mileage/fuel be accounted
for? And if the driver has charging infrastructure added to their quote, how should tax be treated [eg who pays the VAT on the point]? We also need manufacturers to clarify where they stand on fast charging. Some say it has no effect on battery capacity and life whilst others say it does. How do you see the prospects for the EV market? Everyone I have met who has tried an EV loves them and would have no problem in driving one every day. If manufacturers can lower EV prices, improve range and reduce charge times many consumer concerns will disappear. At the moment the majority of uptake will be from companies wanting to use cars for their pool fleet or to benefit their corporate profile. There will also be a few private consumers, for example residents in London, who will see the benefit of EVs. I have seen many predictions from manufacturers on expected volumes and market share for EVs, but I believe these are a little optimistic. In the long term, the sight of an EV on our roads will be commonplace, but petrol and diesel vehicles will remain the biggest player in the fleet market. n BVRLA News | October/November 2011
LinkedIn The BVRLA’s LinkedIn discussion group has been busy recently, with lots of comment centred around the low take-up of the government’s Plug-in Car Grant. Here’s a snapshot of the debate… Roger Arterton Uniloads They are too expensive but they are also impractical in most situations. Their range and recharge times make them unsuitable as company vehicles and there are huge questions over battery life and replacement costs. I think it far more likely that hydrogen fuel cell vehicles will provide a realistic alternative to the petrol engine once the infrastructure is put in place. Rob Chisholm Applewood Vehicle Finance The size of the grant is less important than the net cost to the customer. So if the manufacturers are really serious about EVs they should accept that their margins have to increase over a longer period of time. I believe that small electric vans would be a more appropriate area of the market, where uptake would be more positive. Many of these vehicles stay local and may not actually travel many miles, so a single charge might last more than a couple of days. They can also be recharged whilst on site. Denis Keenan KeeResources We must adopt a “horses for courses” deployment of these emerging technologies, which will surely flourish as it is a way for the manufacturers to reduce tailpipe CO2.
CASE STUDY: Europcar Europcar has introduced the Peugeot iOn EV at five locations and is encouraging motorists to ‘try before you buy’ and hire one for the day. The iOns are available at Europcar’s Heathrow, Gatwick and Luton airport locations, as well as at King’s Cross and Marble Arch in London. They can be hired for one day only and have to be returned to one of the EV locations. “They are ideal for short city journeys and are already immensely popular with many of our business customers who are making the most of the cost savings they offer,” said Ken McCall, managing director of Europcar Group UK. “And they’re great for car buyers who want to ‘test-drive’ this latest motoring innovation.”
BVRLA News | October/November 2011
We have bought a Leaf, and in proper context it is truly a great vehicle, but it simply isn’t appropriate to compare it to a normal internal combustion engine (ICE) car in any way and to do so is missing the point. Michael Potter Fleetdrive Management I am a big fan and have seen quite a few applications where this will work – but using current EVs requires a change in mindset that I think has been underestimated. In my opinion the best way to educate now is to get cars out there so people can see them being used. Manufacturers are going to have to work very hard if they want to sell at such premiums over ICE cars in the early stages. If you want to join the debate on LinkedIn, look for the ‘Rental and Leasing Industry Issues’ group. 7
Fleet profile: Citroën Most car manufacturers have been forced to focus attention on their fleet credentials this year as retail sales continue to slump post-scrappage scheme. Citroën is no different, and it has high expectations from its stylish and refined DS line, which it believes will prove popular with userchoosers and help get it back onto more fleet choice lists. So far so good – the company has seen a 24% growth in the volumes it sells through contract hire firms in 2011. Citroën expects to sell over 35,000 cars and 18,200 vans into the fleet market this year. But fleet director Andrew Wady says his company’s recent success in the fleet sector is down to longer-term planning. In particular, he points to the major investment Citroën has made in its network of 90 business centres, each with a dedicated business development manager. Set up two years ago, these centres focus on the SME-market. They have seen van sales rise 23% and car sales rise 75% this year. “We always had a good pedigree of selling vans to small businesses,” says Wady. “This has been about following that up and selling cars into these same customers”. Leasing companies As with most manufacturers, the Motability scheme accounts for a
significant proportion of Citroën’s fleet business, but around 10,000 cars this year will be sold to leasing companies or leased directly to customers via its Citroën Contract Motoring arm.
fleet customers. The company is also going to enhance its current fleet menu pricing offer and will set prices for oil, parts and labour rates.
As well as improving the transparency of its aftermarket support, Citroën’s Wady: ‘We can “The benefit of having Citroën is also trying to control our own destiny’ our own leasing speed up the process. company is that we can Wady highlights a recent control our own destiny, set residual initiative where the company worked values and focus aggressively on the with epyx to slash the response time SME market,” says Wady. “We don’t on its 1link service, maintenance and want to compete with the large leasing repair authorisation requests. The companies directly.” effort appears to be paying off: fleet aftersales work going through its dealerships is up 8% this year. Despite the major inroads made into leasing company fleets this year, Wady Daily rental says that the company still has a subPunishing foreign exchange rates mean 2% share of the contract hire market. that Citroën is unlikely to contribute much volume to the daily rental sector Citroën will be relying on the recently in the foreseeable future. It has around introduced DS4 and DS5 to help it 1,200 units in rental, half in cars, and make inroads on fleet lists dominated half in vans, mostly DS3s and DS4s. by VWs, Audis and BMWs. Aftermarket Citroën’s network of business centres also has a key part to play in offering an aftersales service on a national scale. This is vitally important to meet the requirements of some of its biggest fleet customers, which include Kone, Virgin Atlantic, Cadburys and G4S. More than 130 dealer staff have been sent on a training course to help them better understand the needs of their
Earlier this year Avis added 300 DS3s to its Select Series fleet. These are available at key airports and a number of railway stations and shopping centres in London. “We are planning to put around 2,000 cars into the rental market next year, all on guaranteed buy-back,” says Wady. “If you do it in correct volumes, there are no issues.” n
Citroën: key fleet models
Due to hit the UK market in Spring 2012, the new DS5 will be the first Citroën to feature ‘HYbrid4’ diesel hybrid technology. The four-wheel drive car will deliver 200bhp, emission-free electric motoring in the city and total emissions of just 99g CO2/km.
The second model to be unveiled under Citroën’s new premium DS sub-brand, the distinctive DS4 is aimed at fleets, particularly user-choosers. With emissions as low as 114g CO2/km, it also has attractively low business-in-kind rates and has received good marks from reviewers.
One of the UK’s best-selling small vans, the versatile Berlingo range is available in a range of different specifications and has emissions as low as 123g CO2/km.
BVRLA News | October/November 2011
£1 + 18 months = £250k+ for BEN a hassle-free way to support the vital network of care and advice services provided by BEN.” It’s now 18 months since BEN, the automotive industry charity, launched its initiative for used car vendors to donate £1 from the proceeds of each vehicle sold. ‘Fleets Backing BEN’ has gained a huge amount of interest and is now on track to contribute nearly £250,000 this financial year.
The money raised has been invaluable for BEN, not least because it’s a regular flow of income – which is extremely important for any business or charity. It is used in a variety of ways, from purchasing much-needed equipment, such as a specialist wheelchair, to providing overnight accommodation for a family visiting their father in hospital.
Nigel Williams, BEN’s commercial development manager attributes the success to the scheme’s simplicity: “The BVRLA community has always been very supportive of BEN, but these days time is a precious commodity. An initiative that runs in the background, contributing to the industry’s charity, is an ideal solution for organisations who want
Backing BEN isn’t the only way to support BEN – BVRLA members are active across a range of activities, including providing volunteering staff at one of BEN’s four care centres or helping with fundraising at an industry event. Enterprise Rent-A-Car recently entered the annual Bangers4BEN rally and VW Finance donated a signed Manchester United shirt for
the auction at this year’s BEN Scotland Ball. This is in addition to BVRLA companies providing BEN with staff cars and annual donations. Staff can also participate in supporting BEN through payroll donations, something that a large number of fleet and rental companies already operate. “We enjoy an excellent relationship with the BVRLA and its members,” says Williams. “But, across the whole industry, awareness about what BEN does is an issue for us and is something we are currently addressing with a series of monthly emails that can be distributed to all staff in a member’s organisation.” n www.ben.org.uk To find out more about BEN, contact Nigel Williams. Contact Nigel Williams, email@example.com 07850 485836
Golf showdown for BVRLA and MTGS It was one of those fortunate things that sometimes happens – the date of the contest between the BVRLA and the Motor Trades Golfing Society was brought forward at the last minute. Instead of a chilly, rainy autumn day, the competition took place in glorious sunshine.
The event was played at the 350 acre Stoke Park in Buckinghamshire. This
historic 27-hole championship course is undoubtedly one of the finest in the country. Created in 1908, it has seen many impressive rounds in its prestigious history, including the first PGA Matchplay tournament in 1910 and James Bond’s epic golfing duel in Goldfinger. After another titanic battle, the BVRLA’s team managed to hang on for a draw. As holders of the trophy since 2009, the association got to keep it – and it remains proudly on display in our conference room in Amersham. n
Photos: David Hanson
The format for the 3 October golf fixture, a regular event in the BVRLA calendar,’ was a ‘four ball, better ball’ competition. The association’s team was highly motivated to retain the Stoke Poges Trophy, over which
the BVRLA and the MTGS have contended since 1995, being under the watchful eye of honorary life president Freddie Aldous. The team, full of low handicap players, featured some regulars in the shape of Simon Kerr (Eurohire Vehicle Rentals), Anne Gallagher (Gallagher Car & Van Rentals) and Jonathan Wool (Towergate Insurance), and some new blood keen to impress, such as Manoj Sharma (MS Automotive) and Graham Prince (Neva Consultants).
BVRLA News | October/November 2011
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Seminar addresses risk issues The BVRLA recently held an Asset Management and Risk Control seminar which attracted more than 50 member representatives involved in consumer contracts, credit control and recovering vehicles and other losses. Hosted by associate member Blake Lapthorn at its offices in Oxfordshire, the seminar included speakers from Burlington Credit, the Recovery of Goods Centre and AVCIS (Association of Chief Police Officers’ Vehicle Crime Intelligence Service). In addition to dealing with imminent changes to obligations under the Consumer Credit Act, the seminar covered changes in corporate contract legislation, repossession methods and recovery of goods, stolen vehicle
reporting and tips on investigation strategies and tactics when recovering vehicle assets and debts. Given the range and scope of issues covered during the seminar, the BVRLA would like to schedule a Risk, Credit & Asset Management Forum on a regular basis in 2012 and beyond. n Presentations from the Asset Management and Risk Control seminar are available to download from the BVRLA website: www.bvrla.co.uk. Suggestions for topics for seminars can be sent to member services sales administrator Fran Hampson. Contact Fran Hampson, email@example.com 01494 545703
BVRLA Events BVRLA Industry Conference 2011
BVRLA Annual Dinner 2012
Forum: Residual Value and Remarketing
Forum: Technical & Operational Management Venue TBC
1 December 8 March 2012 23 Feb 2012 March 2012
For enquiries about BVRLA forums, seminars and conferences, and to book places: contact member services administrator Fran Hampson: firstname.lastname@example.org, 01494 545703 For enquiries about the BVRLA Annual Dinner, and to book places: contact membership administrator June Dyer: email@example.com, 01494 545714 Full details of all BVRLA events can be found on the association’s website: www.bvrla.co.uk
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This course, accredited by the Institute of Leadership and Management (ILM), looks at typical customer and fleet issues and discusses delivering fleet solutions. Our four-day course is delivered in modules, each lasting two days, to minimise time spent out of the office. We have recently remodelled the course to include the light commercial vehicle and new car marketplace, and now include trends and initiatives that drive customer choice in the private, business and fleet operations sectors. Funding options and their relative merits are covered in detail.
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BVRLA News | October/November 2011
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