BVRLA News
www.bvrla.co.uk June/July 2012
The newsletter of the British Vehicle Rental and Leasing Association
Business car tax battle The BVRLA has begun mobilising its resources to challenge the government’s ‘tax attack’ on the vehicle rental and leasing industry. March’s Budget introduced a series of changes to the company car tax regime and made it much harder for BVRLA members and their customers to claim tax relief (‘capital allowances’) on lease and rental vehicles. Government ‘Tax Attack’ The government hopes to earn an extra £2bn from company car tax from 2013-17. It wants to make nearly one million fewer business cars eligible for 100% first year or standard tax relief during the same period. In July the association assembled a ‘Business Car Taxation Task Force’ to develop lobbying strategies and technical arguments against what it sees as discrimination against vehicle rental and leasing. The task force plans to commission a report to use member statistics and other data to challenge elements of the government’s capital allowances regime. In particular, it wants to reverse the decision to remove the 100% first-year
capital allowances available on lowemission vehicles from leased cars, which would also impact rental firms. The group will also seek to challenge the continuing application of the Lease Rental Restriction, which prevents companies deducting the full cost of leasing or renting certain cars from their taxable profits. “Tax incentives for reducing fleet emissions have worked too well and the government is worried about falling revenues,” said BVRLA chief executive John Lewis. “But these measures are misguided, unfair and too aggressive. The government has erected a massive roadblock across the route to lower-carbon motoring and could end up driving many low-carbon vehicle manufacturers out of business completely.” The BVRLA has already started trying to persuade the government for a more gradual introduction of its planned increase in company car tax for cars emitting between 0 and 75g/km CO2. Otherwise, in April 2015 these cars will go from being zero rated or taxed at 5% of their P11D price to a 13% rate overnight. The association is also seeking more clarity on how leased electric vehicle batteries will be taxed and how electricity for charging will be treated within the fuel benefit regime. n BVRLA chief executive John Lewis took part in the recent Trading Standards Institute Annual Conference, where he shared the association’s experiences of running an alternative dispute resolution service. Pictured (from left) are: Philip Collins, chairman, Office of Fair Trading; Jean Marc Noël, managing director, Trusted Shops; John Lewis; Liz Barclay, facilitator; Malcolm Harbour MEP; and Arnold Pindar, president of ANEC, ‘the European consumer voice in standardisation’.
In this issue No exemption from age discrimination law As the Home Office refuses to exempt car rental from the Equality Act, the BVRLA plans its advice for members page 2 BVRLA backs OFT motor insurance move The association backs the Office of Fair Trading’s plan to refer private motor insurance to the Competition Commission page 3 The view from BMW How did the German car maker drive to the front of the fleet market – and what will it do next? BVRLA News spoke to corporate operations manager Steve Chater page 4 Consumer protection Consumer law will see some major changes over the next few years: find out what to expect – and what to do page 6 The A to Z of the ATA Learn how ATA accreditation helped Alphabet (UK) Fleet Management, and how it could help your company and staff too page 7
— Promoting responsible road transport since 1967 —
No exemption from the Comment Equality Act – but rental refusals can be justified The UK automotive industry is one of this country’s few manufacturing success stories and it is understandable that the government is very proud and supportive of the jobs and exports it provides. But how about some more support and understanding for the organisations and individuals who own and operate these vehicles across the UK? As well as taking advantage of yet another car plant photo opportunity, it would be great to see a minister announcing some serious investment in the UK’s road infrastructure, an investigation into fuel prices or a fairer approach to motoring taxation. The recent fuel-duty u-turn is just the first victory of a much larger campaign that needs to be won.
Toby Poston Editor Toby Poston, toby@bvrla.co.uk 01494 545700 Production Manager Steven Prizeman, steven@bvrla.co.uk 01494 545710 Advertising Nora Leggett, nora@bvrla.co.uk 01494 545713 © Copyright BVRLA 2012 BVRLA News articles may be used copyright free by members provided that an acknowledgement is given.
BVRLA River Lodge, Badminton Court Amersham Buckinghamshire HP7 0DD T 01494 434747 F 01494 434499 E info@bvrla.co.uk W www.bvrla.co.uk Honorary Life President Freddie Aldous Chairman Neil Cunningham Vice Chairman Peter Cakebread Honorary Treasurer Brian Back Chief Executive John Lewis
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The Home Office has refused to exempt car rental from the government’s age discrimination legislation, which is due to come into effect from 1 October this year. Included within the Equality Act, the legislation will mean that rental companies will no longer be able to restrict rental services on the grounds of the customer’s age. Despite the introduction of an age discrimination ban, rental companies would still be able to limit their rentals as now, but they will have to be able to justify their restriction if challenged – potentially in court. For example, they would need to objectively justify not renting to customers of a certain age because they had statistical evidence that people in this age category were involved in more accidents – resulting in increased costs or a reduced availability of cars for other customers. The BVRLA is now working with the Home Office to produce guidance that will help rental firms to manage the additional risk presented by younger and older drivers, including the use of justifiable restrictions. The association hopes to produce a code of practice, endorsed by the Home
Office, to help answer the following questions:
❱ Can I refuse to rent to a younger
or older driver? ❱ Can I impose a restriction on the vehicle category a young driver can hire? ❱ Can I impose a ‘young driver supplement’ over and above the base rental price advertised? ❱ Can I charge a higher excess payable by younger or older drivers? ❱ My motor insurance policy imposes a restriction on the age of the driver: can I refuse to rent to this age group? “Despite making a very strong case that this new regulation would add costs and safety risks for our sector, the government has refused our request for an exemption,” said BVRLA chief executive John Lewis. “Our key aim now is to produce some detailed guidance that will enable our members to carry out their business without the threat of increased costs or legal action. This is something we achieved with our Disability Discrimination Act guidance, which is a good template to work on.” n The Home Office set out its position in a letter to the BVRLA, which can be downloaded here.
Association supports CBI initiative to reinvigorate British road network The BVRLA has joined forces with the CBI and a number of other UK business groups and employers to put the case for increased investment in Britain’s crumbling road infrastructure.
government report into roads policy, due in the autumn.
The CBI is pulling together views before presenting them to the Prime Minister later this summer, with the hope of influencing a major
“We made it clear that, while we would welcome new road investment, the money to pay for them should come from existing motoring tax revenues.” n
“It is great to see the CBI using its influence on this key issue,” said BVRLA chief executive John Lewis.
BVRLA News | June/July 2012
BVRLA backs OFT motor insurance referral The BVRLA is supporting the Office of Fair Trading’s plan to refer private motor insurance to the Competition Commission for investigation. A preliminary study by the OFT has found evidence that insurers are competing in a “dysfunctional” way, trying to gain a competitive edge by raising rival insurers’ costs and increasing their own revenues. This may be pushing up premiums for drivers by £225m a year. The OFT will publish its final decision on whether or not to refer the sector to the Competition Commission in October. The Commission has the power to intervene in the market if it finds that current practices are anticompetitive. Although the Commission will examine private motor insurance only, any changes it proposes are likely to be taken up by the sectors serving the fleet and rental market, which have been hit by similar cost increases.
The BVRLA welcomed the OFT’s plan to refer the private motor insurance sector to the Commission, given the impact of rising motor insurance costs on the vehicle rental sector. Chief executive John Lewis said: “It is time that the insurance industry took responsibility for controlling costs and not just passing them on in everincreasing premiums.” According to members, the proportion of accidents resulting in personal injury claims has risen from 17% to 25% over the last six years. The average cost of a claim has doubled over the past four years. As a result, insurance premiums for some members have more than doubled. The BVRLA and its insurance task force are tackling the issue on a number of fronts:
❱ Creating an insurance best practice guide to help members. This is due to be published in September.
❱ Increasing the use of the BVRLA’s
RISC Online ‘problem renter’ database so the whole industry is alerted to high-risk customers. ❱ Lobbying for restrictions on the type of injuries for which claims can be made, and for limits on the damages and legal costs associated with them. ❱ Lobbying for an end to rebates and referral fees that increase the costs for insurers of at-fault drivers. ❱ Calling for legislation to require insurers to include the provision of a suitable replacement vehicle within the mandatory thirdparty motor insurance policy. n Further information on the OFT study can be found here. Details of the BVRLA’s work in this area can be read here. Further information about RISC Online can be found here.
Questions remain as tyre standards are upgraded Fleet operators are still waiting for answers as to how their budgets will be affected by the introduction of tyre pressure monitoring systems (TPMS) from 1 November. TPMS will become a standard feature of all new production vehicles from this date and will have to be installed on every newly manufactured vehicle from November 2014. From January 2015, any car with a faulty TPMS will fail its MOT. The system involves wheel sensors that send a signal to a dashboard display if a reduction in tyre pressure is detected. However, the sensors have a limited battery life – around five years or 100,000 miles. Some organisations claim that they may require a £10-15 ‘service’ each time the tyre is changed or removed. Meanwhile, a replacement sensor costs £50-£200. Speaking at a recent BVRLA Technical and Operational Management BVRLA News | June/July 2012
Forum, Kwik Fit Fleet director Peter Lambert said that his company was approaching vehicle manufacturers for answers about whether TPMS would be covered under the vehicle warranty or would be a wear and tear item. He also wanted to know what kind of servicing the system would require.
A new EU labelling system for tyres has been introduced to help buyers assess three key criteria: fuel efficiency, wet grip and external rolling noise (pictured here). Further information can be found on the Michelin website.
“Although this is a good example of a new technology that can help save lives and reduce carbon emissions, our members need to know what impact it will have on maintenance budgets,” said BVRLA chief executive John Lewis. The technology is being introduced as part of the European Union’s efforts to tackle under-inflated tyres, which it believes are a significant cause of road accidents, extra CO2 emissions and reduced tyre life. A recent survey by a leading tyre manufacturer found that 36% of UK drivers had dangerously under-inflated tyres. n 3
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BVRLA News | June/July 2012
UK Sales 2011 BMW 116,800 +7% MINI 50,138 +14% BVRLA News | June/July 2012
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BVRLA Briefing: consumer protection The consumer protection landscape is set to see some considerable changes over the next few years.
Consumer credit: changes are afoot
Responsibility for handling major consumer issues is being passed to local trading standards offices and consumer credit licences are to be issued and regulated by a new authority.
Government proposals call for the creation of a new Financial Conduct Authority (FCA) to replace the Financial Services Authority and absorb the Consumer Credit Act (CCA) responsibilities of the Office of Fair Trading.
The changes could have major implications for BVRLA members who are dealing with increasing numbers of consumer-based contracts as a result of the growth in the small and medium-sized enterprise and personal leasing markets. To help members cope with the increasing burden of Consumer Credit Act compliance, the BVRLA recently published a guide in conjunction with law firm Blake Lapthorn. It can be downloaded from the BVRLA website (click here). On the right, Blake Lapthorn partner Richard Humphreys details the plans for oversight of credit matters; below, we set out what the BVRLA’s Code of Conduct already has to say about consumer protection.
Richard Humphreys Partner, Blake Lapthorn
The plans have raised two particular areas of concern. Firstly, that CCA regulation also encompasses a host of licence-holders (approximately 80,000 in all) who are not really financial institutions at all, for example brokers, debt advisors and debt collectors. Secondly, there are fundamental and crucial differences between the present light-touch system of CCA regulation, based on legislation overlaid with guidance from the OFT, and the detailed rules by which the FSA presently regulates banks and insurance companies. Earlier this year the government confirmed that it intended to continue with the process of transferring CCA regulation to the FCA, which would largely adopt an FSA rule book approach.
So how would an FSA-style regime work? It could be that the new FCA would regulate major finance companies, who would be expected to take responsibility for the actions of their intermediaries. How this might work is anyone’s guess, and it is far from certain that these companies would be prepared to take responsibility for the actions of brokers, dealers and similar intermediaries. The alternative would be to switch to some form of direct sales route to market. Either way it would be hugely expensive for the finance companies. An FSA-style approach may be appropriate for large financial institutions, but smaller ones will find such a regime to be far more intrusive and expensive than at present; perhaps only the larger companies will have the training and resources to adapt. There will be major changes for CCA licence-holders over the next few years, and dealing with them is likely to be an expensive exercise, which will obviously end up reflected in the cost of finance. Whether these changes will actually produce any worthwhile benefits for consumers is a different question! n
Our Code of Conduct: your best safeguard
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BVRLA News | June/July 2012
Alphabet: the A to Z of the ATA Simon Martin, maintenance control team leader, and Tim Milsted, driver services team leader at Alphabet (UK) Fleet Management, explain why their staff were encouraged to undertake automotive technician accreditation through the BVRLA and what they gained
industry knowledge and also being the first vehicle leasing company to hold the accreditation for the entire technical advisors and maintenance controllers.
What does a maintenance controller’s job involve? SM – The maintenance controller’s role is to control and authorise routine service, maintenance and repair of the vehicle fleet. Customer service, relationship building and organisational skills are key for carrying out the role. I oversee the six maintenance controllers here at Alphabet (UK) Fleet Management.
How has the department changed since those individuals undertook the accreditation? TM – Since gaining the accreditation the advisors have shown higher levels of confidence, customer service and professionalism. This has also proven crucial when assisting existing and prospective clients.
All of our maintenance team are from a motor trade background. Two are from a dealership background, starting as a mechanic and progressing to service manager; one is from a bodyshop background, following the same career path. One has been with Appleyard, ING and now Alphabet UK for 42 years and has progressed from apprentice to mechanic to maintenance controller. One is from a military HGV background and one is from a tyre background. What about the role of driver service technical advisor? TM –The driver service technical advisor’s role involves making technical decisions based on the level of information gained from the driver/ fleet manager and providing technical assistance to the repairer, ensuring an effective repair has been carried out.
All of the guys have a background history of dealership environment, including workshop technician, workshop controller, service reception and parts department, employed by Rover, non-franchise, Rolls-Royce and BMW, all evolving into employment with Appleyard Vehicle Contracts, ING Car Lease and currently Alphabet UK Fleet Management Limited. Why did you encourage your team to go for accreditation SM – To portray a professional image to prospective clients and to improve the controllers’ qualifications. TM – To help identify any potential shortfall in service levels or industry knowledge and also to give confidence by certification as an acknowledgement of high-quality service levels. What were the key benefits that came out of it? SM – It made the maintenance team more professional in their day-to-day tasks in the way they approached their daily duties. It enabled the controllers to give a more structured response to clients, colleagues and fleet contacts. TM – Acknowledgement of high-quality service levels provided, including
Have there been any tangible results? SM – Calls handled quicker, more efficiently and more professionally. TM – Enhanced confidence which then incorporates the above expectations of service levels. Who would you recommend the accreditation to? Both – Maintenance controllers, technical service advisors and customer service advisors at a more advanced level. n
ATA Technical Customer Service Accreditation The Automotive Technician Accreditation (ATA) programme, regulated by the Institute of the Motor Industry, measures individual performance against key industry skills, providing proof of competence. It is not a training course but an accreditation that supports formal and informal learning on the job. The BVRLA assessor comes to your workplace to evaluate candidates. This is done through an online test on topics specific to the work of technical service advisors and practical assessments designed to test both knowledge and the ability to put it into practice. Assessment takes half a day on a date to suit the candidate’s employer.
The Alphabet team: pictured last February (as ING Car Lease) with their ATA certificates. Tim Milsted is pictured at the right of the line, with Simon Martin third from right
BVRLA News | June/July 2012
Contact Fran Hampson, fran@bvrla.co.uk 01494 545703 7
Going abroad? Keep up to date Training Did you know that from 1 July all motorists travelling in France must carry a single-use breathalyser? Would you recognise the correct windscreen sticker to display in Berlin to satisfy the city’s air pollution regulations? The BVRLA fact sheet Vehicles Being Taken Abroad has been updated with these and other facts, which members can pass on to their customers. Drivers of rented or leased vehicles travelling in Europe should also be made aware that they are legally obliged to carry a VE103 Vehicle on Hire Certificate. n
Members have reported that they are experiencing problems obtaining European breakdown cover for minibuses. This has been attributed to the gross vehicle weight (GVW) exceeding 3.5 tonnes, the maximum GVW for standard European breakdown cover. The AA and RAC have said they are willing to look at extending current weight limits but want to assess the potential size of the market for such insurance first.
❱ VE103 – Vehicle on Hire Certificate
Members who are interested in this sort of cover are invited to tell the BVRLA the number of trips per year for which it would be required, the typical length of time spent abroad and the most frequented destinations. n
Contact Rob Burford, robert@bvrla.co.uk 01494 545702
Contact Nora Leggett, nora@bvrla.co.uk 01494 545713
❱ Vehicles Being Taken Abroad
Fleet Consultant Development Programme
12-13 September & 7-8 November Amersham This four-day course is aimed at individuals who regularly discuss fleet issues with new and prospective customers. It gives insight into fleet management, allowing attendees to look at the role of the fleet operator from a fresh perspective. Providing an overview of the new vehicle marketplace, including trends in private, business and fleet registrations, the course also addresses market differentiation, business sectors and methods of acquisition. What key benefits can be gained by attending the course?
❱ An industry-recognised
qualification. ❱ Encouragement to discuss new and creative solutions. ❱ Opportunities for sharing ideas.
BVRLA Events BVRLA Golf Day
Frilford Heath Golf Club
6 Sept
Insurance Conference
Venue to be confirmed
18 Sept
Technical & Operational Management Forum Dordon
1 Nov
Residual Value and Remarketing Forum
Heritage Motor Centre
22 Nov
BVRLA Industry Conference
Heritage Motor Centre
29 Nov
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
Attendees will become more aware of the reasons for client requests and can use the information learned and the confidence gained to approach fleet requirements from an alternative outlook and deliver effective solutions. Further information on this and other courses can be found on the BVRLA website: www.bvrla.co.uk To book places, contact: Fran Hampson, fran@bvrla.co.uk 01494 545703
New members Associate
Rental 4Hire Ltd
(Jersey)
Foxy Rentals (Hull) Hexagon Leasing (Derby) MCH Vehicle Rental
(Reading)
Palmer & Martin Rentals (Bishop’s Stortford) SHB Hire (Romsey) Sheaf Self Drive TOM Vehicle Rental
(Coal Aston) (Airdrie)
West Berks Van Hire (Thatcham)
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SMA Vehicle Remarketing
SMA Vehicle Remarketing specialises in providing tailored solutions to fleets of all sizes. SMA provides a fast, friendly and efficient service to a growing audience of fleet customers, enabling them to remarket vehicles faster and more effectively and also provide their customers with a new level of service. From an ‘inspect and collect’ service, which can include new vehicle delivery, to full vehicle refurbishment and remarketing online and across the SMA auction centre network, SMA has gained a reputation for quality and imagination. www.sma-group.co.uk
BVRLA News | June/July 2012
from the BVRLA Do you want a cost-effective way to offer driver licence checking services to your clients? The BVRLA’s new Driver Licence Check service, exclusive to members, is flexible and low-cost, allowing you to provide extra value for your customers and generate additional revenue for yourselves. It can also help you meet your duty of care responsibilities for your own drivers. Our verification system, based on a three-year driver consent mandate, entitles us to access DVLA driver records. You decide on the frequency of that check. The service is fully compliant with the requirements of the DVLA and the Data Protection Act, providing you with clear, concise and meaningful reports. Sign up for a trial today!
Contact Nora Leggett nora@bvrla.co.uk 01494 545713