BVRLA News
www.bvrla.co.uk May/June 2013
The newsletter of the British Vehicle Rental and Leasing Association
The truth is out there! by Gerry Keaney One of our industry’s greatest attributes is its expertise, gained from years of experience running millions of vehicles. But accurate information is also essential, especially when it comes to establishing a vehicle’s total cost of ownership or its day-to-day running costs. This is why the BVRLA recently joined a number of other leading motoring organisations – including the AA and the RAC Foundation – in signing a letter to Transport Minister Norman Baker, expressing our support for the introduction of a new testing procedure for establishing official car CO2 emission figures. Having been designed and put in place 30 years ago, the current system is no longer fit for purpose. The unrealistic drive cycle and variations permitted in the test procedure mean that the difference between official fuel consumption figures and real-world operational figures are too large. Discrepancy A recent study from the International Council on Clean Transport (ICCT) showed that the average discrepancy between official and real-world figures rose from less than 10% in 2001 to 25% in 2011. The discrepancy could be even wider for typical company car fleets – data from LeasePlan in Germany reported an average gap of 33%. Some of the most popular fleet brands were responsible for the biggest discrepancies. This suggests that many fleets are using inaccurate data to calculate their running costs and carbon footprints and that some manufacturers have an unfair competitive advantage over their rivals.
From a wider policy perspective, the current situation threatens the whole drive towards lower road transport emissions. If people lose faith in the credibility of quoted mpg and CO2 figures, it will undermine government attempts to encourage the take up of more fuel-efficient cars. It could weaken the leasing industry’s claim to be leading the way in reducing emissions. The BVRLA supports the introduction of the new Worldwide Harmonized Light Vehicles Test Procedure (WLTP) by 2017. It more accurately matches driving in the real world and limits the variations that manufacturers are allowed to use in carrying out the tests. Improvement Adopting this WLTP would be a major improvement, but it would mean big changes for leasing quotation systems, whole-life cost calculations and fleet policies. European governments would have to take any major revision in car CO2 figures into account when reviewing their motoring tax strategies. You could end up with a scenario where the latest model of a popular fleet car has significantly higher emissions than its predecessor. How would this affect fleet and driver choices, tax rates and residual values? We don’t know. But the BVRLA would work with the UK and EU governments and manufacturers to try and reduce any negative impact on our industry and its customers. Fleet operators and drivers must have accurate information when choosing their vehicles, especially when it concerns fuel efficiency and emissions. Our industry has a proud tradition of leading the campaign for published van CO2 figures and calling for more real-world operational data on electric vehicles. We won’t abandon those principles now. n
In this issue Research reveals reality of UK car rental Car rental can help people own fewer cars and adopt more sustainable travel habits page 2 Driver CPC exemption looks a real possibility ‘Burdensome’ training might not be enforced on vehicle rental staff after all page 5 Leasing brokers: all part of the family This year marks the tenth anniversary of leasing broker membership of the BVRLA: see how we celebrated this landmark page 6 Great expectations! In May the BVRLA welcomed a new chairman, Peter Cakebread, and a new chief executive, Gerry Keaney. What are their priorities in their new roles? page 9 FCA: spotlight on consumer credit What will the Financial Conduct Authority’s forthcoming consumer credit regime mean for you? page 10
— Promoting responsible road transport since 1967 —
Comment BVRLA research reveals The car remains the most popular form of transport in the UK but attitudes to using them are changing, particularly in urban areas, where fewer people want the hassle of actually owning one.
reality of UK car rental
Our newly-published car rental research confirms that our industry is well positioned to take advantage of this growing demand for payas-you-go motoring. The data tells us that car rental customers tend to own fewer cars and have similar sustainable travel habits to car club customers. While we are busy ensuring that these benefits are given serious consideration by policymakers, we hope our members will be using the same messages to win lots of new customers.
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 Š Copyright BVRLA 2013 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
Car Rental Reality: summarises TRL’s key research points
Chairman Peter Cakebread Vice Chairman Neil Cunningham Honorary Treasurer Brian Back Chief Executive Gerry Keaney
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BVRLA News | May/June 2013
Guide will demystify LCV type approval
Committee set to urge car makers to join ReCare ReCare, the rental and leasing industry’s free-to-use electronic vehicle safety recall notification system, has now been live for several months and a number of manufacturers and BVRLA members are up and running with the service.
Alphabet GB, Arval UK, Carillion Fleet Management, LeasePlan UK, Lex Autolease and Tusker. According to the Vehicle and Operator Services Agency (VOSA), there were 215 safety recalls in 2012, affecting 1.03 million vehicles. Many of these vehicles were less than three years old and therefore likely to be represented among those owned or operated by BVRLA members. VOSA supported the development of ReCare, in part because it furthers the agency’s goal of improving road safety. n
ReCare was developed in partnership with Ebbon-Dacs to keep fleet owners informed of all new and outstanding safety recalls. The service helps members fulfil their ‘duty of care’ obligations and guards against incurring criminal liability for selling a vehicle with an outstanding safety recall. The BVRLA’s Leasing and Fleet Management Committee will be writing to motor manufacturers shortly to encourage more of them to sign up. Those who have already BVRLA News | May/June 2013
BVRLA members can register for ReCare at www.recare.org.uk Toyota’s Yaris: subject to a recall in 2012
joined ReCare include Volvo, Ford and Kia. BVRLA members who are registered include: ALD Automotive,
For more information, including a sample letter to send to manufacturers to tell them you wish to be notified of vehicle recalls through ReCare, visit the BVRLA website: www.bvrla.co.uk 3
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Government wins tax allowances debate The BVRLA has lost its campaign to get MPs to reverse the government’s decision to restrict access to first-year allowances for leased low-emitting cars. It is feared that the measure, introduced in this year’s Budget, will encourage companies wanting lowemission vehicles in their fleets to buy rather than lease. In a debate in Parliament in June, the government persuaded MPs presenting the BVRLA’s case for amending the Finance Bill that excluding rental and leasing companies from the allowances was necessary to protect the Exchequer from abuse. “Without the exclusion, there is nothing to stop an overseas business leasing low-emission vehicles from the UK in order to benefit from the first-year allowance,” said Treasury Minister Sajid Javid.
Westminster: MPs were not persuaded by the BVRLA call for allowance equality
The BVRLA will now focus its efforts on wider reform of taxation affecting vehicle rental and leasing through its work with HM Revenue and Customs, where it has had more success. At a recent meeting with HMRC, tax officials said they viewed vehicle
Photo: clearlens/Shutterstock.com
rental and leasing as an “oddity” and conceded that the sector had been adversely affected by its tax avoidance policy, which was largely aimed at “adventurous” big ticket leasing transactions, such as those involving oil pipelines and aeroplanes. HMRC accepted that vehicle rental and leasing did not lose the Exchequer money. It also agreed that capital allowances no longer offered an equitable tax relief for vehicle rental and leasing firms, especially as these businesses would be claiming capital allowances on a reducing balance basis for assets long after they had been sold. As an alternative, HMRC is planning to examine a range of alternative options for tax treatment for leases in light of the International Accounting Standards Board’s proposed changes to lease accounting. The new options could be announced as early as the Chancellor’s Autumn statement. n
Driver CPC battle goes on as DSA orders review The BVRLA believes that its campaign for Driver Certificate of Professional Competence (Driver CPC) requirements to be relaxed for rental and leasing staff could be close to achieving its goal. At present, the Department for Transport requires employees to hold a Driver CPC if they drive minibuses or commercial vehicles between branches, collect or deliver them, or take them to roadworthiness tests. This means that passenger-carrying vehicle (PCV) drivers with ‘acquired rights’ (essentially those who have held a PCV licence for more than five years) must complete 35 hours of training by September this year. Commercial vehicle drivers with acquired rights must complete 35 hours of training by September 2014. The BVRLA has long argued that although this requirement is appropriate for professional drivers, it is a significant imposition upon staff BVRLA News | May/June 2013
travelling within 50 kilometres of their base without passengers or goods, not operating for hire or reward, and driving as an incidental part of their job. Another exemption would allow vehicles to be driven to and from Vehicle and Operator Services Agency testing facilities (including ones authorised by VOSA).
Driver CPC: a ‘burden’ for rental staff who deliver vehicles to their customers
who do a small amount of driving in the course of their work. The Driving Standards Agency (DSA), the body that oversees driver training, has now recognised that Driver CPC is “perceived to be a disproportionate burden” for rental and leasing companies’ employees. A proposed exemption now being consulted on would cover drivers
The consultation closes on 28 June, although the DSA believes it is unlikely to be able to make the changes before September. The government has reassured the BVRLA that enforcement action will not be taken against rental and leasing company employees who have not completed Driver CPC training until the consultation has been concluded and a decision reached. n BVRLA members with views on the subject are invited to contact legal and policy executive Amanda Brandon. Contact Amanda Brandon, amanda@bvrla.co.uk 01494 545701 5
Leasing brokers: all part of the family Paul Huxford PHVC Vehicle Management
Mike Lloyd Central Contracts
Martin Brown Fleet Alliance
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BVRLA News | May/June 2013
Landmark lunch celebrates a decade of achievement To celebrate the tenth anniversary of leasing broker membership of the BVRLA, the association’s first Leasing Broker Lunch was held in London this June.
Paul Huxford of PHVC Vehicle Management, who chairs the BVRLA Leasing Broker Committee, described the last ten years as a very successful partnership.
More than 70 guests attended the event at the prestigious Landmark London hotel near Marylebone Station, including leasing brokers, vehicle manufacturers and other representatives from the wider industry.
He said: “We have worked really hard to raise standards of professionalism – embracing the BVRLA Code of Conduct, BVRLA conciliation service, and sharing best practice within the industry. Meanwhile, the BVRLA has provided us with a huge amount of information and advice, ensuring that we are prepared for any upcoming legislative challenges and giving us valuable extra credibility with both funders and manufacturers.
The event was made possible thanks to sponsorship by four of the sector’s key funders – Arval, Lex Autolease, Network – a LeasePlan Brand, and Ogilvie Fleet. BVRLA News | May/June 2013
“I believe that BVRLA leasing brokers are now really beginning to reap the rewards from this relationship.” The BVRLA currently has around 130 leasing broker members and is working hard to recruit the remaining 10-20% of the mainstream B2B broker sector that are not yet in membership. “BVRLA leasing brokers make a large contribution to the association and the industry,” said BVRLA chief executive, Gerry Keaney. “As well as being active participants in BVRLA activities and events, the broker channel is also responsible for much of the vital new leasing business coming from the SME sector.” n 7
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In May the BVRLA welcomed a new chairman, Peter Cakebread, and a new chief executive, Gerry Keaney. BVRLA News caught up with both men to find out more about their backgrounds, business styles and priorities in their new roles. What skills and experience do you think you bring to your new role? PC: More than 30 years’ experience in the contract hire industry. I run a relatively small team, but am heavily involved with the larger Marshall Group, which includes over 70 motor dealerships. I enjoy problem solving and the challenges involved with achieving consensus within a disparate group, each with their own priorities. GK: I have extensive automotive and finance experience and spent ten years as an international sales and marketing director, balancing the needs and objectives of a variety of stakeholder groups. I also have a great understanding of business development, which will be very important as we look to continue to grow the BVRLA and extend its influence. What other interests do you have outside of work? PC: I enjoy theatre, music of all genres and relaxing with a glass of good wine. GK: I enjoy all team sports and am a passionate supporter of Liverpool FC. I also collect antique maps and enjoy making regular visits to the cinema and theatre. BVRLA News | May/June 2013
What other business leaders do you admire and why? PC: Anyone who has a vision and remains true to it throughout their career. Which is rarer than you might think! GK: Those leaders who are prepared to innovate and then hang around long enough to make the idea a long-term success. Apple’s Steve Jobs springs to mind. What is your business ethos? GK: I have a few: long-term success does not happen by accident; do what you say you will do and do it with a smile on your face; and never forget that it is the customer that pays your salary. PC: Concentrate on great service delivery. Examine every potential business development, asking whether it will improve the experience of your customers. What things are you least and most excited about in your new role? PC: I’m least excited about adding numbers of additional meetings to my schedule, but most excited about having a chance to make a difference to the industry I love. GK: It is a new role for me after over 20 years with Volvo so every day is exciting.
What are your immediate priorities? GK: Meeting as many members as possible and spending as much time as possible with my colleagues in the BVRLA team, listening to feedback and establishing priorities. PC: Helping Gerry to settle in and to develop his strategy. What do you think are the biggest challenges facing the vehicle leasing and rental sectors? PC: Essentially, the industry delivers a good, well-defined range of services, which meet the needs of the market, so I am confident about the future. Less government interference would be good though… GK: The vehicle leasing and rental sectors are significant contributors to the UK economy and this is still not well enough understood by government and other bodies. What do you think are the BVRLA’s strengths and weaknesses? GK: In the short time I have been here it is very clear that the BVRLA team is a very professional, successful one with a clear can and will do attitude… I believe it delivers tremendous value for money to its members. PC: It’s an excellent trade association, which has seen great progress in all areas over the last ten years. So no pressure then… n 9
Photo: Frazer Waller
Great expectations
Gerry Keaney (left) and Peter Cakebread (right): the BVRLA’s two new men at the top
FCA: spotlight on consumer credit From 1 April 2014 all businesses that provide consumer credit will be regulated by the Financial Conduct Authority (FCA) rather than the Office of Fair Trading. The FCA is now one of the UK’s main financial regulators, having replaced the Financial Services Authority in April this year. The FCA’s aim is to make markets work and ensure that consumers get a fair deal. It has three main goals:
❱ to see that consumers get financial
services and products that meet their needs, from firms they can trust.
❱ for markets and financial systems
to be sound, stable and resilient, with transparent pricing information; and
❱ for firms to compete effectively, with the interests of their customers and the integrity of the market at the heart of how they run their businesses.
The National Audit Office claims that bad consumer credit deals have cost customers up to £450m a year. It believes the FCA would have saved them £140m of this. Consumer Focus, a governmentfunded organisation that aims to secure a better deal for consumers, conducted a survey in 2012. It found about 237,000 consumer problems in the UK hire and ancillary/unsecured credit market over a 12-month period.
The BVRLA has highlighted the low level of consumer harm the vehicle leasing sector causes and the low risk to the consumer in entering into a vehicle leasing product. Just 0.02% of the leases on BVRLA members’ books resulted in complaints in 2012. 10
Illustration: iaod/Shutterstock.com
In its responses to FCA and HM Treasury consultations, the BVRLA has called for vehicle leasing to be defined as a lower risk activity. This would be consistent with the treatment that the FCA will apply to motor dealers – the sale of consumer financial products being a secondary activity in both sectors.
The BVRLA has also called on the FCA to recognise members’ adherence to the Code of Conduct or Leasing Broker Code of Conduct as demonstrating compliance with FCA rules. n
The BVRLA Guide to the Consumer Credit Act, produced in association with law firm Blake Lapthorn, can be downloaded from the BVRLA website: www.bvrla.co.uk BVRLA News | May/June 2013
Karting kontest keeps kash koming to BEN After three hours of action on the track and in the pit lane, a team from Lex Autolease took the plaudits, closely followed by drivers from Autodata and Bowater Price.
Seventeen teams from BVRLA leasing broker, leasing and associate members showed their mettle on more than 120 laps of the Daytona circuit on 10 May to raise money for BEN, the automotive industry charity.
Many thanks to all those who took part, including teams from PHVC Vehicle Management, Hitachi Capital Vehicle Solutions, Jardine Motors, Vindis Group, LeasePlan, Fleetdrive, Arval, Wessex Fleet
Solutions, Fleet News, Ogilvie and Fleet Alliance. The BVRLA also fielded a three-strong team to share driving honours. Despite a determined performance, it’s fair to say that Lewis Hamilton needn’t lose any sleep. The event raised more than £2,000 for BEN and is all set to return on 14 May 2014. n
Photos: David Hanson
The Broker 200 Charity Kart Race in Milton Keynes may have lacked the glitz and glamour of a Formula 1 grand prix, but the competition was no less fierce.
IASB consults on new lease accounting proposals The BVRLA expects leasing and rental to retain their status as essential forms of vehicle finance even if the new lease accounting proposals announced by the International Accounting Standards Board (IASB) are implemented. The BVRLA is confident that its members would be able to adapt their business models and help their customers with any extra accounting burden that the new standards impose. The IASB’s proposals are intended to bring all leased assets onto a BVRLA News | May/June 2013
business’s balance sheet, giving a more complete picture of its financial position. Initially, the new standards would only apply to publicly quoted firms and public sector organisations that report to IASB standards. Most UK firms report to the UK’s generally accepted accounting principles (GAAP) and would be unaffected until these converge with IASB standards. There is no date set for this at present. Following the current consultation the IASB will publish a final standard towards the end of this year. There will be a transition period before the
new standard becomes mandatory in a few years’ time. The BVRLA will be responding to the consultation and will keep members informed of any changes. n The BVRLA’s Lease Accounting LinkedIn group discusses these issues. It can be found here: www.linkedin.com Alternatively, contact BVRLA legal and policy director Jay Parmar. Contact Jay Parmar, jay@bvrla.co.uk 01494 545706 11
Low-CO2 resale prices rise Training & seminars Average prices for used fleet vehicles were up 10% in May 2013 compared to the same period last year, following a similar pattern seen throughout the last 12 months. However, the average price of used fleet vehicles emitting 160g/km CO2 or less has risen by more than 26% in the same period. The average prices achieved by hybrid vehicles
rose by more than 20% during that time. The latest market report from the National Association of Motor Auctions (NAMA), showed an average value for all used fleet cars of £8,075 for the month, with an average conversion rate of 71%. n Further information can be found on the Retail Motor Industry Federation website: www.rmif.co.uk
New members (Bewdley)
Global Self Drive
(Peterborough
Hatch Green Coaches
(Taunton)
❱ VAT, taxation and balance sheet (Bristol)
Southwest Motorhomes (Somerset) Thame Service Station
(Thame)
Associate Autorola UK
Autorola UK is part of the Autorola Group, Europe’s largest online remarketing company with presence in 31 countries across Europe, in Australia and in the USA. The UK business is one of the fastest-growing companies in the group and helps manufacturers, contract hire and rental companies, and dealers to maximise disposal profits through its online remarketing channels. Over 2,000 trade buyers source cars and vans daily through the Autorola UK platform, making vehicles available 24 hours a day, seven days a week. www.autorola.co.uk
Thule Towing Systems
A global brand and a world leader in sports utility transportation, Thule Group has an impressive product portfolio of roof bars, roof boxes, cycle carriers and, of course, towbars. Thule Towing Systems is the largest towbar manufacturer in the world, producing over 1.7 million units and supplying original equipment to 30 vehicle manufacturers worldwide. Thule has approx 4,000 employees at over 30 production and sales sites in all major car markets. www.thulegroup.com
BVRLA Events Frilford Heath, Abingdon
5 Sept
AA, Oldbury
7 Nov
Residual Value and Remarketing Forum
Heritage Motor Centre
19 Nov
BVRLA Industry Conference
Heritage Motor Centre
5 Dec
Technical and Operational Management Forum
For enquiries about BVRLA forums, seminars, training and conference, and to book places: contact member services sales administrator Fran Hampson: fran@bvrla.co.uk, 01494 545703 For enquiries about the BVRLA Annual Dinner and Golf Day, 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
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Run by BVRLA-accredited training provider Grosvenor Training Services, the course aims to increase product knowledge and enhance sales techniques. It covers: the benefits of contract hire.
RB Hire Fleet
BVRLA Golf Day
4-5 September, Amersham This two-day course is aimed at sales professionals in contract hire, leasing and fleet management.
❱ company acquisition methods and
Rental Affinity Motor Credit
Selling Contract Hire
principles.
❱ sales process, including generating leads.
For further information, or to register, contact member services sales administrator Fran Hampson. Contact Fran Hampson, fran@bvrla.co.uk 01494 545703
City & Guilds Rental Operator Skills Certificate
6 November This nationally recognised qualification is awarded for knowledge of vehicle operations and best practice. The BVRLA administers the accreditation in conjunction with the City & Guilds awarding body, with written examinations held annually at test centres across the UK. Aimed at all rental agents and managers in daily rental and light commercial vehicle rental locations, achievement of the standard is an industry benchmark of quality that transcends corporate-branded training. Career-minded individuals will want to add this certificate to their CVs. Application forms can be downloaded from the BVRLA website: www.bvrla.co.uk For further information about BVRLA training, and to book places, visit the BVRLA website at www.bvrla.co.uk or contact member services sales administrator Fran Hampson: Fran Hampson, fran@bvrla.co.uk 01494 545703 BVRLA News | May/June 2013