BVRLA News, January 2011

BVRLA News

www.bvrla.co.uk January 2011

The newsletter of the British Vehicle Rental and Leasing Association

On the road to recovery

by John Lewis As we enter 2011, there are signs that some funders are taking a much more positive view of the vehicle finance market, recognising the solid margins and low risks associated with it.

A number of banks are indicating an appetite to return, bringing much needed funding to help the industry meet growing demand for rental and contract hire. The BVRLA also sees some of its smaller leasing company members working together, using their combined strength and expertise to present a convincing funding case to potential lenders.

It is great that the industry is looking to reduce its reliance on a small group of key funders. This should lead to greater competition, with our members being charged a fairer price for their finance.

An improved funding outlook for the vehicle rental and leasing industry could not come at a better time.

Most people are expecting the slow recovery in the UK economy to continue at the same pace in 2011, but it will be a largely credit-less one, with smaller businesses in particular struggling to meet their borrowing requirements. BVRLA members will provide vital vehicle finance to ensure this economic growth can continue.

There will be a few bumps along the way. We’ve already encountered the first – this month’s VAT increase, which will hit consumer confidence. By April many of the tax measures and spending cuts announced in the Comprehensive Spending Review will have started to take effect.

These will hit consumer AND business confidence and could put major upward pressure on the unemployment figures.

Hovering in the background will be the threat of a financial crisis in the Eurozone, which could trigger a second mini-credit crunch across the Continent.

On a positive note, business conditions will continue to favour the vehicle rental and leasing sector this year. Economic uncertainty will encourage organisations to use contract hire, eliminating most of the financial risks associated with owning and operating a vehicle. Meanwhile, the economic growth that we will experience will result in more demand for rental vehicles, particularly vans.

Predictions for 2011

❱ Car sales will continue to hover around

the two million mark and may well fall short of last year’s level, with fleet sales taking an even greater share.

❱ The contract extensions that proved so

popular over the last couple of years will now drop away.

❱ Fleet management, either as part of a

vehicle funding agreement or on its own, will grow as more organisations decide that they haven’t got the expertise or inclination to manage their fleets in-house.

❱ Salary sacrifice will continue to grow

in popularity, attracting people who used to take the cash instead of a car rather than being a substitute for the traditional company car market.

❱ Our members will take on hundreds of

electric and plug-in hybrid vehicles this year, mainly for public sector clients.

❱ A combination of rising standards

and more stringent underwriting criteria from funders will see a smaller but more professional core of brokers emerging.

❱ Our commercial vehicle members will

enjoy a growth in demand for rental and leasing, particularly for vans. A more balanced market will emerge, where supply capacity is more closely matched to demand. n

bvrla.co.uk

In this issue Cecil Redfern: farewell to the first president The BVRLA mourns a major figure in the association’s foundation and development page 2 Continuous insurance: how it will work What will the new offence of being the registered keeper of a vehicle with no motor insurance mean? page 3 BVRLA Industry Conference 2010 If you weren’t there, catch up with events at our biggest event of the past six months page 4 Digital radio: no cause for interference With analogue radio signals set to be switched off, what are the implications for rental and leasing? page 6 ‘Clocked’ mileages reveal need for vehicle checking The BBC claims that more than 600,000 cars on Britain’s roads have been ‘clocked’ to increase their value page 7

— Promoting responsible road transport since 1967 —

Comment Obituary: Cecil Redfern, the first BVRLA president Welcome to this first issue of 2011.

The BVRLA team wishes all its members a very productive and prosperous New Year. We make no apologies for the optimistic tone of our cover story this month – we are confident that this year will be a good one for our industry!

If you haven’t done so already, don’t forget to book your tickets for the BVRLA Annual Dinner on 3 March.

With around 40 days to go and only 50 places remaining, now is the time to confirm your attendance at the vehicle rental and leasing industry’s ‘Big Event’.

Time is also running out for entries for our Industry Achievement Awards.

The deadline for you to nominate your company’s unsung heroes is 26 January. Just post or email us the details of the colleague who made a real difference in 2010.

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 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 info@bvrla.co.uk W bvrla.co.uk Honorary Life President Freddie Aldous Chairman Kevin McNally Vice Chairman Neil Cunningham Honorary Treasurer Brian Back Chief Executive John Lewis

The BVRLA is sorry to have to inform members of the death of its first president, Cecil Redfern, on 5 December, aged 93.

Cecil ‘Red’ Redfern was one of the founders of the BVRLA. Representing Godfrey Davis (Car Hire), he was present at its inaugural meeting in 1967 at London’s Waldorf Hotel, where he was elected as one of two vice chairmen. ‘Red’ had already had a long and interesting career by then, including serving with the RAF in Burma during the Second World War. Between 1968 and 1969 Redfern provided an office in Wembley as a base for the fledgling BVRLA. He went on to become the association’s first president, appointed with the unanimous approval of the Committee of Management when the post was created in 1975. He served in this role until 1980, and again between 1988 and 1992.

During his time in office, Redfern presided over one of the biggest events in the BVRLA’s history, its 21st anniversary – marked by a huge set of vehicle tests at Donington Park.

Nearly 800 people attended, including the principal guest, Prince Michael of Kent.

Cecil Redfern: in 1975, as president

Long after his presidency ended, Redfern remained closely associated with the BVRLA and was a familiar face at its annual dinners right up to 2010. One of his sons, Derek, followed closely in his footsteps, going on to become BVRLA chairman.

‘Red’ and his wife, Diane, were well known for their unstinting work on behalf of charities, particularly Saints and Sinners and South Buckinghamshire Riding for the Disabled. n

Association sets out lobbying aims The BVRLA has set out its lobbying priorities for 2011 following discussions with members.

“The BVRLA will be working to raise the profile of vehicle rental and leasing in 2011 and ensure that our members and their customers get the services and road infrastructure they deserve,” said Jay Parmar, the head of legal services.

The BVRLA’s plans include: ❱ persuading the government not to treat the business motorist as an easy target for tax increases or to make transport cuts that would stifle economic recovery.

❱ encouraging the Driver and Vehicle

Licensing Agency to improve its electronic communications. ❱ creating a Commercial Vehicle Quality Assurance inspection programme endorsed by the Vehicle and Operator Services Agency. ❱ ensuring that proposals for a lorry road user charge meet the needs of rental and leasing operators.

Other suggestions can be sent to legal services executive Amanda Brandon. n Contact Amanda Brandon, amanda@bvrla.co.uk 01494 545701 BVRLA News | January 2011

Continuous insurance: how it will work A new offence of being the registered keeper of a vehicle with no motor insurance is due to come into force this year. With this in mind, the BVRLA and its members met the Driver and Vehicle Licensing Agency (DVLA) and the Motor Insurers’ Bureau (MIB) last month to discuss its implementation.

The DVLA wants to make sure that the database is as accurate and up-to-date as possible before it starts enforcing the new regime in the spring. To this end, the agency is encouraging BVRLA members to send it names and fleet codes, which it will forward to the MIB for checking, along with the relevant entries from its database.

As the registered keepers of their vehicles, leasing and rental firms will be held liable for any fines issued against their vehicles for being listed as uninsured on the MIB’s Motor Insurance Database. They will not be able to transfer fines to their customers.

BVRLA members who wish to participate should contact legal services executive Amanda Brandon (amanda@bvrla.co.uk, 01494 545701).

Once the exercise ends, companies will have to approach the MIB directly, at a charge.

The new system will put the onus on rental and leasing companies to work with their customers to ensure that vehicles are added to the Motor Insurance Database in a timely manner when they are leased or rented. Managing registration could be treated as an ‘added value’ service. n The BVRLA is planning a seminar on this and other insurance-related matters. If you would like to receive further information, contact the head of member services, Nora Leggett.

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

Continuous insurance enforcement

The DVLA checks its own database against the MIB’s Motor Insurance Database to identify uninsured vehicles.

Where the vehicle is still shown as uninsured after several checks, an advisory letter will be issued to the registered keeper giving an opportunity to get the insurance in order or correct any errors on the databases.

Download a sample advisory letter here.

If the vehicle is still shown as uninsured after about a month from the advisory letter being issued, a fixed penalty notice of £100 will be issued to the registered keeper.

Once a fixed penalty notice has been issued, the vehicle will also be subject to wheelclamping or impounding by the DVLA if it is found on the road.

This may result in destruction or disposal of the vehicle if the fine and release fee are not paid.

If the fixed penalty fine is not paid, a summons will be issued to the registered keeper to appear at a magistrates’ court and face an additional fine of up to £1,000.

Cheap car rental deals prove too good to be true The BVRLA is advising car rental customers to take extra care when confronted with ridiculously cheap deals on the internet or in the press.

Police and Trading Standards officials are currently investigating a number of companies that have lured consumers with low prices and offer to deliver vehicles to their door. In many cases, customers have handed over hundreds of pounds in advance only to find that their car never arrives and the company does not really exist.

The BVRLA is taking the opportunity to remind people to always rent from BVRLA News | January 2011

its members because they are quality assured and operate under a code of conduct. It has produced the following advice for consumers, which members may wish to pass on:

❱ Only use a BVRLA member. Seeing

our logo on the front desk or website is a sign that you are dealing with a reputable company that has been vetted and operates to a professional code of conduct. You will also be able to use our conciliation service in the event of a dispute. ❱ Never hand over cash. Most rental companies will only want to accept credit/debit card payment.

❱ Make sure the company is operating

from bona fide commercial premises, not a PO Box or virtual office. ❱ Make sure the company actually has the cars it is offering – BVRLA members operate their own fleets. ❱ If the price or service seems too good to be true, it probably is!

BVRLA members who suspect companies of operating fraudulently are welcome to pass their concerns to the association’s legal services team. n Contact Jay Parmar, jay@bvrla.co.uk 01494 545706

BVRLA Industry Conference 2010

An exceptionally snowy December presented the BVRLA Industry Conference – and its speakers and delegates – with some very practical difficulties to overcome. Against the odds, the event proved to be a great success. Here we share some of the highlights.

The BVRLA assembled 20 expert speakers across a range of disciplines – automotive, transport, government policy, finance and economics. In six hours of intensive and informative presentation, discussion and debate, delegates were given a thorough assessment of the key challenges facing the rental and leasing sector in the months ahead.

range provided by its petrol engine generator will make the Ampera the first electric model to meet mainstream company car requirements.

For our industry, vehicle disposal is at least as important as acquisition, perhaps more so. Tony Gannon from BCA used his presentation to suggest some new ways of managing fleet disposals through multiple channels, using the latest technology and market intelligence.

The scene was set by David Smith, economics editor of The Sunday Times, who pointed to a sustained recovery in the UK economy, but one that would be tainted by a lack of bank credit (see page 5). He also warned that the recovery was at risk from a number of outside factors, particularly government spending cuts, which would hit some regions of the UK much harder than others.

Between acquisition and disposal, BVRLA members spend billions of pounds each year ensuring that their vehicles are properly maintained, serviced and repaired. Andrew Marsh from Thatcham, the Motor Insurance Repair Research Centre, warned delegates that the increasing complexity of materials and methods used in vehicle construction could put pressure on repair times and the availability of parts.

Next, the focus was placed upon the vehicle fleets that BVRLA members finance, own, manage and operate.

Vauxhall’s Ian Allen briefed delegates on the Ampera, the extended-range electric vehicle which is set to launch in the UK in early 2012. Many fleet observers believe that the greater

A second line-up of speakers focused on the road transport environment faced by our members and their customers. Stephen Glaister, director of the RAC Foundation, called for the government to develop a realistic roads strategy. He suggested that the UK’s core road infrastructure could be

managed independently, like the other regulated utilities. Given a core duty of meeting the needs of road users, they could be allowed to generate their own income stream through road user charging and held accountable by an independent regulator.

This national perspective was followed by an insight into the road transport strategy adopted in the UK’s largest urban area, from Sam Kennedy, head of strategy and stakeholder partnerships at Transport for London.

She described how an increasing population and greater focus on bus and cycle lanes would create a further reduction in available road space. She also gave details of Source London, a new consortium including TfL, Hertz, Europcar and Nissan, which will launch this spring. For £100 a year, it will provide electric vehicle users with access to a range of smartcard-enabled charging points.

Vehicle testing and enforcement is another key day-to-day issue for fleet owners and operators, and Alastair Peoples, chief executive of the Vehicle and Operator Services Agency (VOSA) provided an update on how government cutbacks would affect his organisation. Delegates welcomed the news that VOSA was working to simplify the current commercial vehicle test and was looking at ways to officially endorse the accreditation and training offered by the BVRLA. n BVRLA News | January 2011

Sustainable transport in an age of austerity

CAP expert insists on batteries for EV valuation In a pointed reference to Renault’s current electric vehicle (EV) strategy, Martin Ward, manufacturer relationships manager at CAP, began his presentation by emphasising CAP’s refusal to value any vehicle that cannot be purchased with the battery included.

He then outlined some of the new engine technologies that would impact the fleet market in 2011, forecasting an increase in the number of 1.2 litre, three-cylinder cars within the traditional C sector compact-car class (eg Golf,

Focus, Astra). Ward also highlighted the arrival of Peugeot’s Hybrid 4, the first diesel hybrid platform, which will make its debut in the 3008 this year before being extended to the 508, RCZ and other models.

Ward (pictured above right) said that fleet drivers are looking for more practical and flexible cars. The debate in the D sector class between whether to opt for an estate, saloon or hatchback is becoming redundant with the availability of ‘crossover’ cars like the Skoda Yeti and Nissan Qashqai.

Ward also told delegates to expect to see a greater entry into the fleet market from Korean manufacturers, who are introducing a range of new models that are closing the gap on their European and Japanese rivals in terms of build quality and specification.

Finally, he produced some interesting data highlighting the disappointing miles per gallon performance of some of today’s ‘eco’-models, compared to their standard counterparts. n

Sunday Times’ Smith warns of uneven Truck registrations regional impact of tough government cuts are set to recover The UK vehicle finance industry will remain a vital source of funding for fleets over the next few years, if the forecasts of David Smith, economics editor of The Sunday Times, are accurate.

Smith (pictured right) told delegates that the UK economy was set for a sustained but largely creditless recovery over the next couple of years, with small businesses in particular struggling to access finance. Smith said the UK was being hit particularly badly by this fall in lending because its big banks have had to borrow so much and lots of foreign lenders withdrew from the market.

BVRLA News | January 2011

The main risks to the recovery were a further reduction in bank lending; sovereign debt problems in the eurozone; increased protectionism in world trade and over-zealous cuts in public spending and tax rises.

On the subject of public spending, Smith warned that the government was planning an unprecedented round of cuts. They would have relatively little impact in London and the South-East, but demand for goods and services in some regions would be massively hit. n

The amount of freight transported on the UK’s roads has grown fivefold in the past 60 years, but there are no more trucks on the road, Tony Pain, marketing director at DAF Trucks, told the conference.

Instead, trucks were getting bigger, carrying larger payloads and doing more mileage than ever before.

Annual new truck registrations in the UK are set to recover from their current slump to an average of about 43-45,000 in future, below the previous level of 50,000. Pain forecast a temporary surge in 2013 as fleet operators buy cheaper Euro 5 trucks before the more expensive Euro 6 technology becomes mandatory in 2014. n

Don’t let the switch to digital radio cause you interference With analogue radio signals set to be switched over to a digital alternative, people are wondering what the implications are for in-car systems and traffic news.

The BVRLA’s head of legal services, Jay Parmar, answers the key questions.

What is happening?

The previous government’s Digital Britain report said “vehicles sold with a radio should be digitally enabled by the end of 2013” to prepare for the switchover of the analogue signal to digital intended for 2015. But there is a great deal of speculation about this date because the analogue signal will only be switched over when:

❱ 50% of the population is listening on digital platforms.

❱ national digital radio coverage is comparable to FM.

What are carmakers doing?

The objective of motor manufacturers with regard to the switchover is to ensure that all new cars sold in the UK are fitted with digital radio by the

end of 2013. The existing vehicle parc will either be converted by in-vehicle adaptors or by fitting digital audio broadcasting (DAB) radios, if viable, before 2015.

What should leasing firms do?

In the run-up to the analogue signal being switched over, and afterwards, members disposing of vehicles that do not have a digital radio could see a reduction in their residual value. To avoid this, they might want to encourage customers to order vehicles with digital radios by promoting the benefits, which include:

❱ Scrolling text is available with many

DAB stations, which provides the opportunity for enhanced traffic and safety information to be broadcast. ❱ Listening to your favourite stations hiss and crackle free in digital quality. ❱ No need to remember station frequencies – DAB lists all available stations, which you can then select by name.

Motor manufacturers could also be encouraged to fit digital radios as standard, rather than as an optional extra. Some manufacturers have already started doing this.

Can analogue radios be adapted?

Adaptors can be purchased to enable analogue radios to receive digital signals. There are a wide range of adaptors available, at varying costs, to cater for drivers’ needs. Some adaptors plug into the cigarette lighter, which could be problematic for customers wanting to charge phones or use portable sat-navs, so it will be important to check what the power supply is for any adaptors purchased.

Are analogue radio signals being switched over across Europe?

Although a number of European countries have committed to digital radio, there isn’t a common date. This is unfortunate, because if there were, motor manufacturers would be more willing to fit digital radios as standard.

Where do I get more information?

Digital Radio UK, which is promoting the digital radio switchover, runs a website providing a wide range of information on where to buy adaptors and on the stations that are available.

It can be found here: www.getdigitalradio.com n Contact Jay Parmar, jay@bvrla.co.uk 01494 545706

SMR Forum: new name to reflect broad interests The BVRLA’s Service, Maintenance and Repair (SMR) Forum has a new name for 2011: the Technical and Operational Management Forum.

“The committee felt the forums were addressing much wider operational issues than just service and repair issues,” said Tim Bowden, chairman of the committee and operations director of Hitachi Capital Vehicle Solutions.

“For example, in the last year we have looked at digital radios, vehicle relicensing and road traffic offences, to name just a few. We therefore

wanted the name of the forum to accurately reflect the subject matter being discussed.”

The forum will continue this broad operational responsibility in 2011, with its next event taking place on Tuesday 22 March as part of the Fleet World/ BVRLA Electric Vehicle Showcase at the National Motorcycle Museum in Solihull.

The showcase will include presentations from a range of experts on some of the key financial and

operational challenges involved with electric cars and vans. There will also be an opportunity to drive some of the vehicles hitting the market later this year. n To join the Technical and Operational Management Forum for 2011, download and complete this membership form or contact member services executive Steph Czaplinska.

Contact Steph Czaplinska, steph@bvrla.co.uk 01494 545702 BVRLA News | January 2011

‘Clocked’ mileages reveal need for vehicle checking The BVRLA believes that urgent action needs to be taken to reduce the number of cars that are being ‘clocked’ – having their odometers wound back to show lower mileages, thereby increasing their value.

It is calling on the government to regulate companies providing mileage correction and insist that such services are only provided with the authorisation of the registered keeper.

This would help protect leasing companies from clocking, which can result in them being swindled out of excess mileage fees or providing a false provenance for their vehicles.

Last month, the BBC radio programme 5 live Investigates claimed that more than 600,000 cars on Britain’s roads have been ‘clocked’. Taking MOT data for vans and motorcycles into account, the official mileage of 716,291 vehicles is lower than a year earlier.

The figures were revealed to the BBC following a freedom of information request to the Vehicle and Operator Services Agency. They show that in the year to March 2010 the recorded mileage on MOT certificates for 669,127 cars had dropped compared

with that recorded on the previous certificates issued 12 months earlier.

Although there could be valid reasons why a reading might be lower, such as data-inputting errors or a fault with the odometer, BVRLA head of member services Nora Leggett, is sceptical.

“These figures suggest that ‘clocking’ is still rife,” she said. “They highlight the value of carrying out a full provenance enquiry, including a mileage check.

Altering the mileage on a vehicle is not illegal, but selling it on without telling the subsequent buyer is fraud.”

BVRLA members sell many thousands of used vehicles each year, many of them before the first MOT is due.

The vast majority of these have their mileages entered into a database to be shared with vehicle history information providers.This information gives used car buyers extra security when checking the provenance of a prospective purchase. n These BVRLA associate members provide vehicle history information: CDL

Experian

mycarcheck.com

e-series motor

mytextcheck

AutoCheck

AA HPI RAC

Training programme 2011 Residual Value and Remarketing (RVR) Forum Technical and Operational Management Forum at the Electric Vehicle Showcase, in association with Fleet World

Stratford-upon-Avon 22 February

Solihull

22 March

In-house training – dates available upon request For further information about all BVRLA courses, contact Fran Hampson: frances@bvrla.co.uk, 01494 545703

New members

CDL Vehicle Information Services Ltd Dash Drive Fleet Logistics UK Ltd FVTH Self Drive Hire Insight Vehicle Management Ltd MSL Vehicle Ltd Mylchreests Motor Ltd Prestige Rental Cars Ltd Spaceships Campervans Rental

BVRLA News | January 2011

Stockport Redruth Birmingham Farnborough Nantwich Cheadle Isle of Man Denham Hayes, Middlesex

Associate Rental Leasing CV Rental Leasing Broker Rental Rental Rental Rental

Training Certificate in Fleet Consultancy Module One: 13-14 April 2011 Module Two: 31 May - 1 June 2011 Amersham Devised in association with the Institute of Car Fleet Management (ICFM) and accredited by the Institute of Leadership and Management (ILM), this course is aimed at sales executives and account managers.

It covers key principles of fleet and asset management, policy purpose and delivering fleet solutions, including finance and acquisition needs.

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

ATA Technical Customer Service Advisor Assessors can be booked at dates to suit candidates Intended for staff in technical service departments, this Automotive Technician Accreditation (ATA) aims to boost individual careers and professional development while improving an employer’s reputation for professional excellence. Regulated by the Institute of the Motor Industry (IMI) the accreditation lasts five years. Skills are assessed through an online test and practical assignments based on real-life situations. The assessment, which only takes half a day, can be carried out at the candidate’s own business premises.

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

BVRLA Fair Wear and Tear Standards Training Course 15 February, 13 April Dunton Park, Warwickshire

The BVRLA Fair Wear and Tear course is run by BVRLA-accredited training provider Manheim Inspection Services.

The one-day course is delivered through a mixture of classroom and ‘hands-on’ practical workshop sessions and is ideal for staff who regularly discuss vehicle condition and those in business development roles.

Contact Fran Hampson, fran@bvrla.co.uk 01494 545703 7