BVRLA News
www.bvrla.co.uk October 2010
The newsletter of the British Vehicle Rental and Leasing Association
Electric car experiment still has pieces missing by John Lewis There has been a lot of coverage of electric vehicles in the press in recent weeks. We have heard that the new Nissan Leaf and Peugeot iOn will be available to lease from early 2011. At the same time residual data specialists CAP gave a healthy forecast for the Leaf, the government announced the criteria for its £5,000 ‘Plug-In Car Grant’ and consortiums around the country started bidding for the next wave of charging infrastructure subsidies. These are all key steps in enabling the massmarket uptake of ultra-low-carbon vehicles, and the UK is clearly making great progress.
But calculating these risks requires information, and this is still in short supply. That is why the Nissan Leaf and Peugeot iOn ‘launches’ due in 2011 will be more like test projects than traditional new model roll-outs. We are talking about a few hundred cars at most. 2011 will see leasing and rental firms, their customers and vehicle manufacturers trialling these few vehicles to see if their undeniable environmental and commercial potential can really cut it in the modern business world. Vital lessons will be learnt about how fleet profiles can be adapted to embrace these new vehicles and what sort of fleet management support is required. In the meantime, the government needs to be clearer about exactly how its Plug-In Car Grant will work. How will it be treated for VAT and corporation tax purposes? The shambolic introduction of the car scrappage scheme should provide a good example of what to avoid.
Nissan Leaf: billed as “the world’s first affordable massproduced zero emission vehicle”, pre-orders are already available
Our industry is going to play a major role, with rental and leasing rapidly emerging as the favoured ways of encouraging nervous and reluctant corporate fleets and consumers into trialling new electric technology. BVRLA members are experts at calculating the residual value and maintenance risks associated with different vehicles and they will assume this burden.
Manufacturers have to play their part, by being clearer about their product road map and pricing, their warranties and what maintenance support will be available. They need to ensure that there is a free market for their vehicles by providing a range of purchasing and funding options.
The dearth of information for prospective electric vehicle buyers must also be addressed. Is it better to charge batteries little and often or give them a full charge every few days? How does fast charging affect battery life? It is going to be an interesting year, and the BVRLA will do its very best to keep members up-to-date with this big electric experiment. n
bvrla.co.uk
In this issue VOSA could endorse BVRLA’s CV standards The Vehicle and Operator Services Agency might accredit the association’s quality assurance scheme for commercial vehicles page 2 Conference draws heavyweight speakers Transport Minister Mike Penning and VOSA chief executive Alastair Peoples will headline the BVRLA’s key industry event page 3 HMRC asks for help with VAT mileage data After admitting flaws in its method of calculating the VAT leasing customers can recover, the HMRC wants to work with the BVRLA to improve it page 3 Car rental: setting out the key facts A handy new one-page guide explains everything customers need to know – and it’s free to members page 4 Golf Day: results revealed Never mind the Ryder Cup, who took home the trophies from last month’s BVRLA Golf Day? page 5
— Promoting responsible road transport since 1967 —
VOSA considers endorsing Comment the BVRLA’s CV standards Our industry has been banging its head against the wall of the Department for Transport for many years. Government policy has centred on cutting emissions and getting vehicles off the road, with little recognition of the enormous reliance that businesses and individuals still have on their cars, vans and trucks. It’s early days, but the new administration seems a bit more willing to engage. In fact, they are even prepared to come to us! Transport Minister Mike Penning will speak at our Industry Conference on 2 December, along with some senior civil servants from VOSA, the DVLA and Transport for London. If you want to get something off your chest or hear what they have to say, here’s your chance. 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 2010 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 Vehicle and Operator Services Agency (VOSA) is considering whether to endorse the BVRLA’s Commercial Vehicle Quality Assurance (CVQA) inspection programme. The CVQA ensures that BVRLA members are compliant with both the association’s code of conduct and VOSA’s standards. The proposal was made at a recent meeting of VOSA’s Industry Liaison Group (ILG), which includes representatives from the BVRLA, the Freight Transport Association, the Road Haulage Association, the Society of Motor Manufacturers and Traders and the Retail Motor Industry Federation. With VOSA accreditation the CVQA programme would help customers meet their O-licence obligation to use audited third-party vehicle maintainers, including rental and leasing companies. Customers could also benefit from being less likely to score badly on the agency’s Operator Compliance Risk Score system, while BVRLA members who are operator licence holders would no longer be subject to VOSA assessments. “VOSA has recognised that the BVRLA’s Vehicle Quality Assurance programme plays a vital role in enforcement and compliance,” said Jay Parmar, the association’s head of legal services.
“This is a major step forward for VOSA and shows that in the current economic climate innovative solutions can be developed to help spread VOSA’s resources further.’” The ILG meets twice a year to develop strategic solutions for industry-wide problems that could be appropriate to input into the VOSA business plan. The trade associations present urged VOSA to consider greater targeting of the noncompliant drivers and operators. VOSA agreed that trade association members were more likely to be compliant than non-members. Other areas discussed included driver error – a contributory factor in 53% of heavy goods vehicle accidents in 2008 according to Department for Transport statistics. Vehicle defects, by comparison, were identified as a factor in only 2% of accidents. The trade associations present therefore suggested that VOSA reinstate its vehicle inspection training for commercial vehicle and minibus drivers. The ILG also agreed with the BVRLA’s calls for more data on the first-time, class seven MOT failure rates of vans with a gross vehicle weight of between 3 and 3.5 tonnes – a category that appears to have an unusually high failure rate. n
British businesses favour compact and economy vehicles, says Avis Avis has reported that threequarters of its UK business customers have chosen to rent compact and economy vehicles during the first half of 2010. According to its Business Travel Index, 59% of corporate customers rented on a daily basis, with 8% opting for a longterm rental. More than half of all business rentals (51%) were from non-airport locations.
With domestic rentals up 3% yearon-year, Avis says that the findings indicate that businesses are still spending cautiously when it comes to travel, focusing on home markets and recognising the value of face-to-face meetings with customers. It also said that a third of corporate customers prefer to book their rental via a call centre, saying that they wanted reassurance that their requests, often last minute, were dealt with personally. n BVRLA News | October 2010
Airports group investigates barriers to rental Manchester Airport is helping the BVRLA study the factors influencing airline passengers’ decisions about using car rental. The aim is to identify any barriers to the use of car rental and find ways of improving customers’ experiences. The work is being driven by the BVRLA’s airports working group, which is also in discussion with airports operator BAA about how car rental can be better promoted on its website and at airports.
Tasked with representing the interests of BVRLA members who operate in and around the UK’s airports, the group is continuing to lobby for some basic improvements at all sites. It would like to see enhanced signage as well as better scheduling of shuttle buses travelling between rental branches and terminal buildings.
to understand their forecasting for passengers numbers, and help the car rental sector plan accordingly,” said Jay Parmar, the BVRLA’s head of legal services.
“With less than two years to the London 2012 Olympic Games, the BVRLA will be working with airport operators
Contact Jay Parmar, jay@bvrla.co.uk 01494 545706
For further information on the work of the airports working group, contact Jay Parmar. n
Conference draws transport heavyweights Just a few weeks after the government presents its comprehensive spending review, Transport Minister Mike Penning will update BVRLA members on how the predicted expenditure cuts will hit road users. Penning is just one of the major transport industry figures who will be addressing delegates at the association’s Industry Conference on 2 December. He will be joined by Alastair Peoples, chief executive of the Vehicle Operator and Services Agency (VOSA), who will tell delegates about the department’s plans to modernise vehicle testing and ensure more targeted enforcement. David Smith, economics editor of The Sunday Times, will get proceedings under way by delivering an expert
Serious speakers: (from left) Transport Minister Mike Penning, VOSA chief executive Alastair Peoples and Sunday Times economics editor David Smith will address the conference
analysis of the state of the UK economy and the prospects for 2011. Later on, Stephen Glaister, director of the RAC Foundation, will give an assessment of our road transport infrastructure,
outlining some of the key issues facing motorists, now and in the future. n More details of this must-attend event can be downloaded here.
HMRC asks for help to reform flawed VAT mileage data HM Revenue & Customs (HMRC) is to work with the BVRLA on a new way of capturing mileage data and using it to find the level of VAT leasing customers can recover. The agreement came after the association challenged the previous figures that HMRC had been relying on.
of their lease rental payments. Although HMRC has confirmed that it wants to retain the current recovery rate at its existing 50% level, it has admitted that the data sample it used to support this decision may not be representative. HMRC has still to gain Commission approval, but must do so by the end of the year.
Every three years HMRC is required to obtain the European Commission’s approval for the rate at which businesses can recover VAT on the finance element
HMRC has been relying on an unrepresentative survey of 418 householders, whereas the BVRLA was able to support its case with mileage
BVRLA News | October 2010
data from more than 120,000 drivers. This evidence demonstrated that business usage (excluding commuting) is responsible for around 70% of distance travelled – confirming that the existing recovery rate was too low. For further information on VAT mileage data, contact BVRLA head of legal services Jay Parmar. n Contact Jay Parmar, jay@bvrla.co.uk 01494 545706
One-page guide to car rental key facts Rental companies are being urged to issue customers with a new, easy-to-read ‘key facts’ document setting out the main terms and conditions associated with hiring a car.
Key facts about your rental
it will help you understand what’s included in your This is a summary of the key facts of your rental agreement. While in full in order to be sure of your obligations and ours. agreement and what isn’t, you should read your rental agreement
Produced by the BVRLA in conjunction with its members, the guide tells customers where they stand on issues including fuel, mileage, insurance, damage, late returns and traffic fines. It also explains what they should expect from the rental company.
What’s not included
What’s included
✓ ✓ ✓ ✓
Motor insurance
You are insured to drive the vehicle you hire – as are any other drivers named on the rental agreement.
Repair costs
If the vehicle is damaged while it is on hire to you, then you’ll only be liable for costs up to a fixed sum chosen by you.
Fuel
The vehicle comes with fuel. You’ll be expected to return the vehicle with the same quantity of fuel at the end of your hire, or reimburse us for refuelling the vehicle.
Mileage
There is normally no limit on the distance you can drive in the vehicle you hire.
✘ ✘ ✘
Please remember that…
condition of …before you drive the rental vehicle you should take time to check the an opportunity the vehicle you want to hire with a member of our staff. This gives you on the to identify and record any existing damage to the vehicle – such as scratches bodywork – this will help to ensure there are no disputes later. then please …if you return the vehicle, with our approval, outside our office hours – the vehicle park it legally in a safe, well-lit area. Take time to check the condition of – if possible, take photos of it. of your …you should check what is covered in our agreement, and the extent not covered, financial liability for the cost of repairs. Some types of damage are often wrong type of such as punctures, chipped windscreens, damage caused by using the fuel, and damage to the roof.
Traffic fines
You must pay any fines or penalty charges relating to our vehicle, such as parking fines, that arise while it is on hire to you. We may ask you to pay our costs for dealing with these fines.
Late returns
You must return the vehicle you hire on the date and time, and to the location, specified in your rental agreement. Unless you have gained our permission to extend the hire you may incur extra charges.
Unattended returns
By arrangement, we may allow you to return the vehicle you hire outside our normal opening hours, but, if you do so, you will remain responsible for the vehicle, and any damage it sustains, until it has been inspected by us.
We abide by the code of conduct of the British Vehicle Rental and Leasing in Association (BVRLA), an organisation that represents vehicle rental firms the UK and maintains standards amongst them by regulating its members and providing a conciliation service for dissatisfied customers. BVRLA, River Lodge, Badminton Court, Amersham, Bucks HP7
Tel 01494 434747
Fax 01494 434499
www.bvrla.co.uk
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“Car rental is good value and can be booked in a matter of minutes over the internet or over the phone,” said BVRLA chief executive John Lewis. “However, customers need to bear in mind that they are renting an expensive and often powerful piece of equipment and that there are terms and conditions involved.
“If we, as an industry, can make these clear at a prebooking stage or before taking possession of the vehicle, we should be able to reduce the number of misunderstandings or disputes that occur further down the line.” n
The handy one-page guide was produced in response to a ‘consumer summit’ held earlier this year by the European Commission. Following the summit, the Commission called on the car rental industry to provide consumers with more user-friendly information summarising key contractual terms.
The BVRLA is now encouraging its members to use the document as part of their pre-rental process to help inform consumers about the key requirements and obligations associated with renting a car.
Emission zone: Euro 3 by 2012
Euro Parliament cuts van CO2 goals as ACEA unveils emissions calculator
Transport for London (TfL) has confirmed that from 3 January 2012 larger vans and minibuses will have to meet a Euro 3 standard for particulate matter to drive in the London Low Emission Zone (LEZ) without charge.
The European Parliament’s Environmental Committee has agreed on a reduced emissions target for van manufacturers. They will now have to achieve an average CO2 figure of 140g/km across their entire product range by 2020 – a less testing target than the 135g/ km originally proposed by the European Commission.
These vehicles were originally due to be included within the scope of the LEZ from 4 October this year, before the mayor of London, Boris Johnson, agreed to defer the implementation due to the economic downturn. This change in the standard could offer BVRLA members an opportunity to rent vehicles to operators with older vans and minibuses who make infrequent journeys within the LEZ. BVRLA members should also note that the LEZ’s requirement for goods vehicles over 3.5 tonnes will tighten to Euro IV for particulate matter on 3 January 2012, as planned. n Further information on the LEZ can be found on the BVRLA’s website.
Key Facts About Your Rental can be downloaded here.
sort of average tailpipe output figure that is assigned to cars. The calculation methodology promoted by the ACEA, a Brussels-based trade body representing 16 major car, van, truck and bus producers, is based on real-life tests. The vehicles involved range from city buses and refuse trucks to delivery vehicles and long-haul transport.
A target of 175g/km will be phased in from 2014 to 2016. All the van emissions proposals will be subject to a final vote this November. The proposed legislation would cover all vans and car-derived vans used to carry goods, up to 3.5 tonnes gross vehicle weight.
Emissions are calculated in grams of CO2 per tonne-kilometre, cubic metrekilometre of goods or passengerkilometre to reflect the purpose and usage of the vehicle concerned.
Meanwhile, the European Automobile Manufacturers’ Association (ACEA) has agreed to develop a tool to help buyers calculate CO2 emissions and identify fuel-efficient trucks and buses.
Although the BVRLA has welcomed this development it wants to know how the calculations would be applied consistently across all manufacturers and what manufacturers will do to help their existing customers calculate the CO2 emissions of the trucks they operate today. n
CO2 emissions for goods vehicles vary according to factors such as their size, the load carried, distance travelled and speed, making it difficult to produce the
Further information on the proposed CO2 calculator can be found on the website of the ACEA. BVRLA News | October 2010
Manheim, Rival, Autoclenz dominate Golf Day Sixty-four players faced the challenge of Frilford Heath Golf Club’s championship Red Course on the BVRLA’s annual Golf Day, held last month. Frilford Heath, near Oxford, hosted individual and team Stableford competitions for association members on 8 September – the seventh year running that it has been the venue. After some initial light rain the sun emerged and competitors were able to enjoy warmer golfing weather. Oncourse refreshments were supplied at the ‘Halfway House’ kindly sponsored by BCA. Manheim won the team trophy, followed by Rival Insurance, with Autoclenz close behind. James Leese of Manheim won the individual prize; the runner-up was Kevin Armstrong of Autoclenz and Mark Blakesley of Sixt Rent a Car came third.
Champions: Manheim’s winning team accept their trophy from the BVRLA’s June Dyer. From left: James Leese, who also won the individual prize, Simon Wheeler, Jamie Scott and Jonny Miller. (inset) Rival’s accurate Jonathan Wool; (bottom right) rain did not stop play
The trophies for the longest drive and getting closest to the pin both went to Jonathan Wool of Rival Insurance. Booking has already begun for next year’s Golf Day on 7 September, again scheduled to take place at Frilford Heath. For further details, contact membership administrator June Dyer. n Contact June Dyer, june@bvrla.co.uk 01494 545714
Lease accounting seminar illuminates opportunities What do daily rental vehicles and those funded by finance lease, contract hire and flexible leasing agreements all have in common? They will all need to be accounted for in company balance sheets under new proposals being put forward by accounting standard-setters. This was one of the key messages heard by delegates at last month’s BVRLA seminar on the plans of the International Accounting Standards Board (IASB) to make lease accounting more transparent. Many were relieved to hear that only a small proportion of their customers would be affected by the proposals in the near future, because they would only apply to companies accounting to International Financial Reporting Standards (IFRS). Although publicly listed companies are BVRLA News | October 2010
required to account to IFRS, the vast majority of other businesses use the UK’s generally accepted accounting practice (GAAP), which is unlikely to converge with IFRS for a number of years.
routine for members operating car fleets because of the VAT-recovery implications. However, members operating commercial vehicle fleets have traditionally not been required by their customers to record service and rental separately.
Members were taken through the proposed changes and told why the commercial benefits of vehicle renting and leasing would not disappear. Many said the seminar helped them realise the opportunities for providing a range of value-added information services to help customers with new accounting responsibilities.
Greater transparency for customers could be a major selling point for commercial vehicle members, provided the administrative burden is not overwhelming.
Under the proposed changes, only rental liabilities, not any contractual elements for services, repairs or maintenance, are to be accounted for on balance sheets. This separation of rentals and services in operating leases, delegates learnt, is
If you were unable to attend this seminar but would be interested in attending a repeat, or a seminar on a similar subject, please register your interest by contacting BVRLA head of member services Nora Leggett. n Contact Nora Leggett, nora@bvrla.co.uk 01494 545713
Our search for Industry Heroes starts here The BVRLA Annual Dinner on 3 March will see the industry recognise its most deserving staff with the return of the association’s Industry Hero Awards. Once again, we are looking for nominations from employers who want to highlight outstanding contributions seen during 2010. Entries are invited from members within the four main membership categories: Rental, Leasing and Fleet Management, Commercial Vehicle and Leasing Broker. It 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. Our criteria are deliberately broad in order to encourage entries for as wide a range of employees as possible – the only stipulation is that candidates should not be senior managers.
Seeing stars: the winners of the 2010 BVRLA Industry Hero Awards. From left: Northgate Vehicle Hire’s Claire Piggott (Commercial Vehicle category), Hertz’s Bally Nagra (Rental) and Agility UK’s Jacki Stevenson (Leasing and Fleet Management and the overall Industry Hero)
The winners will be selected by the BVRLA Chairman’s Committee and will be invited to the dinner as a guest of the association, where they will receive their accolades. To enter, just set out in no more than 1,000 words why your candidate deserves
recognition. Entries should be emailed to toby@bvrla.co.uk by 31 December 2010. All submissions must be approved by a senior manager at your company. n Further information about The Big Event: The BVRLA Annual Dinner 2011, and a booking form, can be downloaded here.
Keep up with the VAT rate change The BVRLA has produced two new fact sheets to help members cope with the implications of the VAT rate changing from 17.5% to 20% on 4 January 2011. One is dedicated to vehicle rental and the other covers leasing. Both fact sheets have been reviewed by HM Revenue & Customs and the rental fact sheet has had additional input from accountancy firm Deloitte. The fact sheets cover all aspects of rental and leasing which might be affected, including guidance on providing services over the period of the rate change, treatment of vehicle sales and de-hire charges. n VAT Rate Change Guidance (Rental) (Fact Sheet 571) can be read here. VAT Rate Change Guidance (Leasing) (Fact Sheet 582) can be read here.
Getting the attention of key decision-makers in rental and leasing businesses isn’t easy – fortunately, advertising in BVRLA News is. With a combined fleet of 2.5 million cars, vans and trucks, rental and leasing businesses are responsible for buying nearly half of all new vehicles sold in the UK. They spend over £17bn a year on vehicles and £4bn on support services. For further information about advertising with the BVRLA, contact Nora Leggett: nora@bvrla.co.uk, 01494 545713 BVRLA News | October 2010
Autumn forums’ exciting agendas Training courses The BVRLA’s Service, Maintenance and Repair (SMR) and Residual Value and Remarketing (RVR) forums have set agendas for next month’s sessions that should bring members up to date with developments affecting these key aspects of their business. The next SMR Forum will take place on 3 November, hosted by VW Group in Tamworth, Staffordshire. Members keen for an insight into how parts are stock-controlled and distributed will be able to join a tour of the site. VW has indicated that it will take the opportunity to encourage leasing companies to continue using its franchised networks for servicing and repairs. There will also be an update on ATHORIS, the Clifford Thames Group’s fleet service software application. At an SMR Forum last year, members heard Clifford Thames chief executive David Riemenschneider’s views on providing choice and competition in the sector. He will return to continue the debate.
Attendees will also hear from Bob Davis, head of aftermarket services at the Society of Motor Manufacturers and Traders (SMMT), on the implications for fleets of the government’s plans for the switch to digital radio in 2015. The RVR Forum on 17 November also has an impressive line-up. It includes Mark Cowling of Motoring Economics, who will talk about the prospects for economic growth in 2011, and Adrian Rushmore, managing editor of Glass’s Guide, who will review the fleet market. This event, the third RVR Forum of the year, will be held at the Welcombe Hotel, Stratford-upon-Avon. If you would like to attend either forum, contact member services administrator Steph Czaplinska for details. n Contact Steph Czaplinska, steph@bvrla.co.uk 01494 545702 Further information about the BVRLA’s forums and seminars can be found here.
Committee meetings 2010 If you have an issue that you would like your sector representative committee to discuss, click on the relevant link below to access contact details and put your suggestion forward.
Committee of Management
18 November
Chairman’s Committee
28 October
Commercial Vehicle Committee
30 November
Leasing & Fleet Management Committee
7 December
Leasing Broker Committee
19 October
Rental Committee Residual Value & Remarketing (RVR) Committee
− 23 November
Risk Management & Security Committee
9 December
Service, Maintenance & Repair (SMR) Committee
25 November
Training programme 2010 Fair Wear and Tear Standards
Dunton Park
Certificate in Fleet Consultancy
Amersham
Fair Wear and Tear Standards
Dunton Park
Certificate in Fleet Consultancy
Amersham
(module one)
(module two)
26 Oct 16-17 Nov 30 Nov 19-20 Jan 2011
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
eCarRentals Ltd (Acton)
BVRLA News | October 2010
Priory Rentals (Northwich)
Fair Wear and Tear Standards 26 October, 30 November Dunton Park, Warwickshire
This one-day course in fair wear and tear standards is run by BVRLAaccredited training provider Manheim Inspection Services. It is delivered through a mixture of classroom and ‘hands-on’ workshop sessions and is ideal for staff who regularly discuss vehicle condition and those in business development roles. Contact Fran Hampson, frances@bvrla.co.uk 01494 545703
Certificate in Fleet Consultancy Module One: 16-17 November Module Two: 19-20 January 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 senior 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 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 designed to examine advisors on reallife situations. The assessment, which only takes half a day, can be carried out at the candidate’s own business premises. Contact Fran Hampson, frances@bvrla.co.uk 01494 545703 7