DRIVING
Issue 11 Spring 2015 ÂŁ4.50
Helping you make better decisions
Open more doors for your business.
THE NEW MINI. now with 5 doors.
IT LOOKS GOOD ON PAPER TOO. With impressively low CO2 emissions and superior performance, the new MINI 5-door Hatch provides fleet drivers with a proposition that’s truly hard to refuse. All new turbo-charged three and four-cylinder engines demand less fuel, deliver more power and produce lower CO2 emissions than ever. Supported by cutting-edge technology like Auto Start/Stop and optional Green Driving Mode, all models are amongst the most tax-efficient vehicles you could choose for your fleet and ensure that BIK repayments are minimised.
j From 92g/km CO2 j From 14% BIK j Up to 80.7mpg (combined)
MORE DOORS. MORE FITTING FOR FLEETS. Adding more doors to our most advanced MINI yet has opened up its advantages to more businesses than ever. With 5 doors comes 67 more litres of boot space (compared to the 3-door model) and even more leg room. Which is just as well, because the new MINI 5-door Hatch is no less loaded with cutting-edge extras and fuel-saving technology.
ENOUGH ZIP TO ZAP THE COMPETITION. More MINI manoeuvrability than ever, courtesy of a stiffer, wider body and lighter chassis. Just the ticket for keeping you one step ahead in city streets. Tight parking spaces are no longer a challenge; the new MINI 5-door Hatch can now steer itself if you upgrade with the new Parking Assistant Pack.
DRIVING
Issue 11 Spring 2015 £4.50
Helping you make better decisions
ELECTRIC VEHICLES WILL SAVE £66,000 Delivery firm Fruit 4 London on how the switch from diesel is saving money and winning new business
ARE YOUR DRIVERS OVERLOADING VANS? DVSA calls for improved compliance after 84% of LGVs are found to be overloaded
NEW CARS DUE THIS SPRING Ford S-Max Honda CR-V Hyundai i40 Jaguar XE
VEHICLE FUNDING SPECIAL
FIND THE BEST WAY TO FUND YOUR VEHICLES Leasing, salary sacrifice or rental could be cost-effective for your business
Contents
ISSUE 11 Spring 2015
FRONT END
7
Are your vans overloaded? Overloading is still the top offence by light goods vehicles on UK roads and SMEs need to take steps to avoid it, warns the Driver and Vehicle Standards Agency.
8 Abolition date for paper driving licence postponed DVLA delay will give businesses time to develop new system to check driver details before paper counterpart is abolished.
BROADER VIEW
12 Fruit 4 London Switching from diesel to electric vehicles will save fruit delivery company Fruit 4 London £66,000.
VEHICLE FUNDING
16 Leasing vs buying Most SMEs still prefer to buy their cars and vans outright rather than lease them, but is this the right decision for your business? We look at the pros and cons.
12 Fruit 4 London 15
Vehicle funding ■ SPECIAL REP ORT
20 Salary sacrifice How to set up a tax-efficient scheme to fund employee vehicles.
22 Long-term rental
16
Leasing vs buying
VEHICLE FUNDING
FIND THE BEST WAY TO FUND YOUR VEHICLES
OUTRIGHT PURCHASE
CONTRACT HIRE
Most SMEs still buy their vehicles outright, but leasing, salary sacrifice or rental could be more cost-effective for your business
SALARY SACRIFICE
Renting vehicles to meet your business’s temporary demands can save you money.
CARS
CONTRACT HIRE OUTRIGHT PURCHASE LONG-TERM RENTAL
24 Coming soon A look at what car manufacturers have in the pipeline this year.
24
Cars coming soon
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 3
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Contact us Driving Business, Media House, Lynchwood, Peterborough PE2 6EA. Email editorial@mydrivingbusiness.co.uk If you or someone you know is aged between 16 and 24 and is interested in work experience opportunities at Bauer Media, visit: gothinkbig.co.uk Editorial Editor-in-chief Stephen Briers stephen.briers@bauermedia.co.uk Editor Sarah Tooze sarah.tooze@bauermedia.co.uk News editor Gareth Roberts gareth.roberts@bauermedia.co.uk Web producer Christopher Smith christopher.smith@bauermedia.co.uk Production Head of publishing Luke Neal 01733 468262 Designer Erika Small 01733 468312 Production editors Richard Davis 01733 468310 Finbarr O’Reilly 01733 468267 Head of project management Leanne Patterson 01733 468332 Project managers Lucy Peacock 01733 468338 Angela Price 01733 468253 Kerry Unwin 01733 468327 Advertising Group sales manager Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Account managers Wendy Cowell 01733 366472 Lucy Herbert 01733 366469 Lisa Turner 01733 366471 Stuart Wakeling 01733 366470 Marcus Woods 01733 366468
Publishing Managing director Tim Lucas 01733 468340 Group marketing manager Bev Mason 01733 468295 Office manager Vicky Meadows 01733 468319 Group managing director Rob Munro-Hall Chief executive officer Paul Keenan Subscriptions: subscription@mydrivingbusiness.co.uk Printing: Precision Colour Printing, Telford. © 2014 Bauer Media No part of this magazine may be reproduced without the permission of the publisher. You can purchase words or pictures for your own publications. Phone 01733 465982 or email syndication@bauermedia.co.uk. Driving Business will not accept responsibility for unsolicited material.
Welcome Many businesses are still nervous about replacing a petrol or diesel vehicle with an electric one. And understandably so. At best, a pure electric vehicle will have a real world range of around 100 miles (aside from the £50k, 200+ mile Tesla). That’s fine if you only use the vehicle to go to the office, or for short journeys around town, but not so good for the sales rep that clocks up hundreds of miles. But as the UK charging network develops, it’s worth considering whether an electric vehicle is feasible for some of your drivers. If you look beyond the often eye-watering upfront cost, you could find that an EV will make substantia savings over the course of three or four years, especially if you operate in London and can save on the congestion charge. That’s been the case for delivery firm Fruit 4 London, which expects to save £66,000 by replacing four diesel vans with pure electric ones (page 12). The Government currently offers a grant of 25% off the basic price of an electric vehicle and, from April 1, this rises to 35% (capped at £5,000), meaning that companies choosing cars priced below £20,000 will benefit from most, or all, of the £5,000 discount for the first time. More than 30 vehicles (25 cars and 7 vans) are currently eligible for the grant. Try the Energy Saving Trust’s new tool to help you work out whether electric vehicles are right for your business (more on page 7). Also in this issue, you’ll find advice on choosing the right funding method for your vehicles – another way you could make significant savings (pages 15–21). Sarah Tooze Editor, Driving Business
Complaints: Bauer Consumer Media Limited is a member of the Independent Press Standards Organisation (www.ipso.co.uk) and endeavours to respond to and resolve your concerns quickly. Our Editorial Complaints Policy (including full details of how to contact us about editorial complaints and IPSO’s contact details) can be found at www.bauermediacomplaints.co.uk. Our email address for editorial complaints covered by the Editorial Complaints Policy is complaints@bauermedia.co.uk.
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 5
■ FRONT END
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Overloading is the number one offence in roadside van checks Overloading of light goods vehicles is still the top offence on UK roads, according to the latest annual effectiveness report by the Driver and Vehicle Standards Agency (DVSA). DVSA staff carrying out vehicle enforcement checks at the roadside and at operators’ premises in 2013/14 issued 2,543 prohibition notices following weight checks on 3,031 vehicles (83.9%, down from 89.9% in 2012/13 and 87.3% in 2011/12). Following mechanical checks, 15,122 prohibition notices were issued on 25,139 vehicles (60.2%, down from 68.9% in 2012/13 and 66.2%) in 2011/12. The DVSA said the van MOT failure rate of about 50% – compared with HGVs on 20% – was a big concern. Issues with brakes, suspension and lighting/signalling were the main reasons for the failures. To improve compliance, the DVSA is focusing on operator and driver education and encouraging a self-help attitude. A threemonth pilot campaign began in January. Gordon Macdonald, DVSA head of enforcement scheme, said: “We want van operators and drivers to recognise what the issues are and help themselves, rather than DVSA coming along with a big stick.” He said fleet operators and drivers could improve compliance a lot by emulating the HGV sector and doing a 10-minute walkaround check on vehicles, with an
DVSA staff issued 2,543 prohibition notices following weight checks in 2013/14
emphasis on tyre, brake and bodywork condition, before setting off on journeys. “That would solve a multitude of problems,” said Macdonald. On overloading, Macdonald said: “We want to encourage operators not to think about the sheer volume, but the weight and distribution of the goods and materials being carried. It is easy to sort out.” As part of the campaign, MOT stations have been distributing key fobs and stickers, supported by a website that provides advice on ensuring vans are roadworthy.
Vehicles a 2015 priority, say SMEs New company vehicles have been named among the key investments SMEs plan to make in 2015, according to research from Lex Autolease. The bi-annual Business in Britain survey found almost half (48%) of management teams plan to raise money to invest in their businesses in the first six months of the year. New vehicles were identified as a key spending area by 8% of the 1,500 companies polled. Company vehicles were a particular priority for small firms in the construction and transport sectors, with 28% and 20% of respondents respectively planning to either invest in buying or leasing a company vehicle this year. This appetite for investment comes despite the report recording a more cautious outlook
from SMEs for the New Year. Since the last survey in July 2014, the report’s key confidence index has decreased by 10 points to 43%, down from a record high. This was largely driven by decreases in firms’ expectations of profits and orders over the next six months. Andrew Hogsden, senior manager, strategic fleet consultancy at Lex Autolease, said: “It’s significant that company cars and commercial vehicles remain on SMEs’ shopping lists, despite a reduction in business confidence. “This signals a growing appreciation of the wider benefits of investing in vehicles, such as maintaining a professional image, reducing carbon emissions by operating a more fuel-efficient vehicle as well as the many other efficiency benefits of running newer vehicles.”
The DVSA will be assessing the impact of the campaign with a view to expanding it, as well as promoting van safety and compliance through the Freight Transport Associationmanaged Van Excellence campaign. Macdonald said: “We will continue to undertake enforcement checks on a small scale, but [businesses] can save themselves time and money by paying attention to vehicles operated and contribute to an improvement in MOT failure rates and a reduction in roadside prohibition notices. A safe vehicle is a costeffective vehicle to operate.”
Free web tool lets businesses assess electric vehicles The Energy Saving Trust has launched a free online advice service called the Plug-in Vehicle tool to help organisations investigating ultra-low emission vehicles. Once visitors to www.pluginadvice.org. uk have answered a few simple questions, they will receive a report that provides detailed advice on the feasibility of adopting plug-in vehicles. The tool helps businesses understand where and how plug-in vehicles will work within their organisation, where to recharge on the routes most commonly taken, and what first steps they can take to adopt electric vehicles. There are multiple benefits to using plug-in vehicles, including lower taxes, reduced running costs and grants to help with purchase.
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 7
■ FRONT END
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DVLA delays abolition date for paper driving licence The Driver and Vehicle Licensing Agency (DVLA) has decided to postpone its abolition of the driving licence paper counterpart until June 8, 2015. The British Vehicle Rental and Leasing Association (BVRLA), which had called for the date to be put back, said the delay will give its vehicle rental members vital breathing space to test and develop new processes for verifying customer driving licence details. The agency has also responded to the BVRLA’s call for a real-time online service to check driver details to be developed before the paper counterpart is abolished by promising “technical solutions that provide up-todate, fit-for-purpose alternatives to the paper counterpart”. Gerry Keaney, chief executive of the BVRLA, said: “The DVLA finally has a clear plan of action for developing its online alternative to the paper counterpart, and we look forward to working with them in delivering a robust, cost-effective solution for the vehicle rental sector.”
Volvo safety scheme on track to sign up 500 SMEs A Volvo Business Sales scheme designed to help SMEs keep their employees safe, stay on the right side of the law, and cut the cost of accidents, is on track to reach about 500 companies in its first year. The Co-Pilot scheme [Driving Business, Autumn 2014] is delivered in partnership with driver risk specialist Fleet21. New or lapsed Volvo fleet The Fleet21 Co-Pilot website customers get an ‘easy compliance package’ worth £495 when they buy or lease a new Business, Fleet21, RoadSafe, Specsavers Volvo. and Transport for London. It includes a fleet policy, licence checks, The latest companies to join the scheme driver handbooks and online risk assessare Regus Office Solutions, Enterprise ments for up to 20 drivers, plus access to Rent-a-Car, Business Scene (a support the members’ area of the Co-Pilot website, network for SMEs, start-ups and entreprefeaturing support, advice and discounts neurs) and South Essex Insurance Brokers, from a range of organisations, including which offers an upfront saving for running Alere Toxicology, Driving for Better Volvo cars.
8 ❚ Spring 2015 ❚ mydrivingbusiness.co.uk
Brush up on your fleet management skills with spring seminars Software provider Jaama is to hold seminars on the essentials of fleet management on April 14 and June 11 at its head office in Tamworth, Staffordshire. The seminars are designed to provide information to administrators and managers who are responsible for fleets but do not necessarily have experience or specialist knowledge of running vehicles. Topics will include company car benefit-in-kind tax measures from April so managers can plan choice list changes and introduce other changes and the impact of the Government’s decision to abolish the driving licence paper counterpart from June 8 on employee driver licence-checking (see page 8) and car salary sacrifice schemes (see page 19). Seminars start with registration at 9.30am and conclude with a question and answer session from 4.30pm. The seminars cost £295 + VAT per delegate, including all course documentation, policies (usually priced at £120), lunch and refreshments. Road safety charity Brake is also offering guidance to small businesses with a free daylong seminar funded by the Department for Transport on March 19 in London. The seminar will look at the barriers small businesses may encounter when trying to improve the safety of their fleets and how these can be overcome, including the Brake Pledge programme.
Vauxhall sets up sales team for businesses with 25 to 99 vehicles Vauxhall has put together a team of 11 fieldbased sales managers to support companies operating between 25 and 99 cars and vans. Members of the new team will work in tandem with their colleagues managing businesses with more than 100 vehicles to ensure consistent levels of customer service. The manufacturer has also updated its website with a number of new features, designed to help businesses with 25-99 vehicles to save costs. James Taylor, Vauxhall’s fleet sales director, said: “We know that these businesses have slightly different requirements than larger, more structured fleets and we really want to show that we can offer them the right flexibility in terms of their overall fleet package. “We truly believe that supporting these businesses directly with the manufacturer is the best way forward as we can integrate them into all the initiatives and programmes we offer. In turn, we hope to reap the rewards of this investment as part of our overall fleet strategy.”
■ BROADER VIE W
FRUIT 4 LOND ON
“Without electric vehicles, we would no longer be in business” Laszlo Mulato, co-founder of delivery firm Fruit 4 London, tells Sarah Tooze how switching from diesel to electric vehicles will save £66,000
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aszlo Mulato and Gabor Doroghazi, who set up Fruit 4 London in 2008, have always been keen to deliver fruit in an environmentallyfriendly way. The pair, childhood friends from Hungary who moved to London in their 20s, are keen cyclists and started their business delivering fruit to offices in central London on bicycles. Mulato had been working at a high-end greengrocer’s in St John’s Wood, London, serving the likes of Kate Moss, Paul McCartney and Bernie Ecclestone. “I loved my job, but I was ambitious and I thought ‘if I can do it for someone else I can do it for myself’,” says Mulato. He enlisted the help of Doroghazi, who had studied agriculture and finance at university and also had ambitions to run his own company. In the early days, Mulato says they were lucky if they got one new customer a month. But today they have nearly 400 clients and take on two to five new customers a week. Staff numbers have doubled from seven to 14 in the past year. To accommodate this new business, they have swapped their bicycles for seven vehicles – four of which are the pure electric Renault Kangoo Maxi ZE.
LOW MILEAGE AND LOW COST Fruit 4 London took on its first two electric vehicles in 2012, in place of a Ford Transit. “We had no experience of an electric vehicle, but it was always our dream to try one and to deliver fresh fruits, our goods, to corporate and private clients across London in a more cost-efficient way and a greener way,” says Mulato. “Our fleet is relatively low mileage and the electric vehicles have proven to be perfect for this job.” Each Kangoo ZE travels 40-60 miles a day, depending on the route, and clocks up 10,000 to 11,000 miles annually. They are used only in central London between 5am and 11am, leaving the vehicles free to be charged up at the warehouse before the next day’s deliveries. It costs Fruit 4 London £1.31 to charge the vans to 100% overnight, meaning deliveries can be performed at low cost. “They can do a day’s worth of deliveries on one charge,” says Mulato. “Gabor drove one of the ZEs to 60 different locations and it worked out at 48p to charge the vehicle.” 12 ❚ Spring 2015 ❚ mydrivingbusiness.co.uk
Fruit 4 London took part in the Energy Saving Trust’s Plugged-in Fleets Initiative, which examines the business case for ultra-low emission vehicles. It worked out that Fruit 4 London could expect to save £16,500 over 36 months by using the Kangoo ZE compared with the larger diesel Transit which, multiplied by the four Kangoo Maxi ZEs, adds up to a potential saving of £66,000. The Kangoo ZE also worked out at about £9,000 less than a Kangoo diesel over the same period. The majority of the savings come from the London congestion charge, as the vans have to enter every day and the electric vehicles qualify for 100% discount. “The other benefit from having electric vehicles is the Government grant of 25% off the price of the van, up to a maximum of £5,000,” says Mulato. Fruit 4 London is also saving on fuel (the Kangoo ZE costs £215 over 12,000 miles compared with £2,618 in the Transit) and CO2 (the Kangoo ZE generates 1.5 tonnes of CO2 over 12,000 miles compared with 5.6 tonnes). “We save a lot on maintenance,” Mulato adds. “On our Transit vehicles we had to change the brake pads and the brake discs every single year. For a small business, £600-700 per vehicle just on servicing the brakes is a huge cost. That’s profit out of our pocket. “It’s not just saving money and being more competitive, it’s saving jobs for people who work for us. Without these electric vehicles, we would no longer be in business.” The electric vehicles have also proved to be good for brand image and have even helped Fruit 4 London secure new customers. Mulato recalls a meeting with one potential client. “The director said ‘our goal is to reduce our carbon footprint as much as possible and we expect our suppliers to do the same’ so I took him outside and showed him the vehicle I had driven there in and said ‘this is how we cut our carbon footprint’. I got the job straight away, no further questions.” Drivers have reacted positively to the electric vehicles. “Every time we employ someone new they are excited because you can read about electric vehicles in newspapers and magazines and see them on television, but not many people make the step of purchasing an electric vehicle because of range anxiety. How do I charge? Where do I charge? So when someone joins Fruit 4 London and I tell them they’re going to be driving an electric vehicle they are excited because finally they can try it out. “Every person driving for us loves it because there is no vibration, the vehicles are quiet and they can focus on the road. They are easy to drive and are powerful.”
£2,400 Fruit 4 London’s annual fuel saving per vehicle by using a Renault Kangoo ZE instead of a Ford Transit
£1.31 The cost of recharging one of Fruit 4 London’s electric vans to 100% overnight
mydrivingbusiness.co.uk
Laszlo Mulato and Gabor Doroghazi with one of Fruit 4 London’s four electric Renault Kangoo Maxi ZE vans
As the Kangoo ZEs are virtually silent, the drivers have to be mindful of pedestrians, says Mulato: “Pedestrians and cyclists are not aware you are coming so you have to be a bit more careful when you’re driving. “We always say to our drivers ‘be extremely careful when you’re reversing’.”
THE CHALLENGES OF ELECTRIC VANS The other challenge Fruit 4 London has faced is that the range drops during the winter due to power needed for heating. To limit this, the vehicle pre-heats while it is connected to the charging point and the driver loads up. Mulato suggests that driving style is more important than using the heating or not. “You have to be forward-thinking when you drive,” he says. “If you see a red light there is no point pushing the gas. Let the vehicle roll and save energy, then you can use the heating a bit longer. I would lose about 10 miles by using the heating – from 80 miles it would drop to 70 miles – but that still fits into the range we need to do.” Fruit 4 London incentivises drivers to improve their range. “Every single day, our vehicles are being closely monitored – the total mileage, the daily mileage, the daily consumption, the total consumption, the average consumption and the speed,” says Mulato. “We can break that information down by individual driver and we give the
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We would love to go 100% electric if we could Laszlo Mulato
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best driver an iPad for Christmas.” Fruit 4 London would like all of its vehicles to be electric, but Mulato says the technology needs to move forward first. It still uses Transits for collecting heavy loads from the market and bringing them to the warehouse as the cargo space is bigger. Transits are also used for deliveries outside central London. “We’re based in East London and we have a customer in Weybridge,” Mulato says. “It would drain the battery if we had to drive there and back.” Last year, Fruit 4 London trialled the Nissan e-NV200, which can be charged from 0% to 80% in approx 30 minutes, but found it could not fit as many boxes of fruit as the Kangoo Maxi ZE as its boxes were re-designed to fit the Kangoo Maxi ZE when the vehicles were first introduced. “We would need to have boxes designed for the e-NV200 and boxes for the Kangoo Maxi ZE and that could create problems with orders,” Mulato says. “We would love to go 100% electric if we could.” Next on the agenda is fitting solar panels to the warehouse roof to generate electricity to recharge the electric vehicles, saving another 1.5 tonnes of CO2. Fruit 4 London also wants to expand its home delivery side with evening deliveries. “We could recharge the vans in the afternoon and then they will be out again making money for us,” says Mulato. mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 13
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Tel.: 0844 600 9012
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■ SPECIAL REP ORT
VEHICLE FUNDING
FIND THE BEST WAY TO FUND YOUR VEHICLES Most SMEs still buy their vehicles outright, but leasing, salary sacrifice or rental could be more cost-effective for your business
SALARY SACRIFICE
CONTRACT HIRE OUTRIGHT PURCHASE LONG-TERM RENTAL
■ VEHICLE FUNDING
CONTR AC T HIRE VERSUS OUTRIGHT PURCHA SE
OUTRIGHT PURCHASE
Which is best for fleets: lease or buy outright? With contract hire becoming increasingly popular, and buying still in the running, Sarah Tooze investigates the pros and cons of each method of aquiring vehicles
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he majority of small- to medium-sized companies still prefer to buy their cars and vans outright rather than lease them. This preference for ownership is long-standing among smaller businesses but it can have financial drawbacks, tying up large sums of money that could be put to more profitable use elsewhere in the company. Buying, managing and selling vehicles is also a time-consuming business and directors should weigh-up whether that outlay is really worth it. Among larger fleets, contract hire and outright purchase have traditionally had more or less an equal share of the funding market, with contract hire edging ahead in recent years, but which method is best for your company’s needs? The decision to choose one method over another relies on individual circumstances, but that decision can be a daunting one as both, of course, have merits and pitfalls. In this article, we evaluate the advantages and disadvantages of each method. 16 ❚ Spring 2015 ❚ mydrivingbusiness.co.uk
CONTRACT HIRE Replacement cycle: Contract hire agreements for cars usually operate on a three-year/60,000 miles or fouryear/80,000 miles basis, so you must be sure you require the vehicle for a set period. If the vehicle is returned before the agreed time, a penalty is usually charged. Flexibility is key to some businesses and the idea of being in a set contract for three or four years may be restrictive. With outright purchase, the only costs you suffer will be the difference between your write-down position and what the car is worth, whereas with contract hire you pay a termination penalty which may be a higher cost, depending on your contract. However, things have begun to improve in recent years and contract hire is a lot more flexible than it used to be. Some companies will offer some form of open book profit sharing.
5-7ppm amount charged by contract hire companies for excess mileage
100%
of VAT claimable if vehicle is only used for work
mydrivingbusiness.co.uk
■ P RO S A N D CO NS: CO N T R AC T HIR E Pros ■ Does not tie you down to a single vehicle and gives you the option of upgrading your car every two or three years. ■ Requires less upfront money. ■ Lower monthly payment. ■ Is an option for people who travel frequently and need a car in different locations. ■ May be a good option for businesses who don’t want their cash flow tied up in a depreciating asset. ■ Flexible repayment terms. ■ A choice of what to do at end of repayment term. ■ Lower administrative burden.
CONTRACT HIRE
Cons ■ Mileage and condition of car affects the costs. ■ Total amount paid may be higher. ■ Have to pay the outstanding balance to keep the car. ■ Unable to make any alterations to the car. ■ Cannot claim the car as your own asset for financial purposes.
■ B RO K ER S K E Y TO L E A SIN G CO M PA N IE S’ EN G AG EM EN T W I T H SM E SEC TO R Brokers can provide companies with a speedy and effective method of accessing vehicle leasing products, especially PCP or contract hire. They are generally sales channels for specific leasing companies and so are ‘tied’ to certain funding channels, with their commission payments possibly influencing whose interests are put first. However, the British vehicle and leasing association (BVRLA) has established broker membership status where a code of conduct applies. While the SME sector is viewed as a key opportunity for growth by a number of car manufacturers, leasing companies have been slower to react. But a number of major leasing companies have expressed an interest in growing SME business.
requirements could benefit. Cost savings: One of the major plus-points of contract hire is that fleets are able to budget as costs are fixed on a monthly basis. As the contract hire company is responsible for the vehicle, it takes on some of the risks. Residual values do not affect the fleet. In addition, as the fleet does not require initial funding, it is also the contract hire company that will be affected by any changes to interest. As costs are spread over the contract, companies may be left with additional capital, which would traditionally have gone towards the purchase of vehicles. This can be reinvested, allowing preservation of capital, which can be used for activities and other parts of the business. Added costs: Wear and tear is one of the pitfalls of contract hire. Charges for damage can vary
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The idea of being in a set contract for three or four years may be restrictive
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Mileage: Contract hire companies will charge excess mileage if drivers exceed a pre-agreed limit. The amount charged will vary between suppliers, but on average it is usually between 5p and 7p per mile. It sounds nominal but costs could rocket just by completing a few extra miles a week. By clocking up 70 miles extra in one week, companies could see charges of more than £20 a month added to the bill. Maintenance: You can pay extra to have maintenance included in the contract. This would cover all routine servicing and take some of the workload from your business, putting more onus on the contract hire company. Some companies with in-house bodyshop and repair facilities would not benefit from paying the extra costs but for those without such provisions maintenance
Alphabet’s Partner broker programme has delivered more than 1,000 vehicles in the four months since its launch last September. Overseen by Gavin Davies, head of indirect sales, the broker channel provides SME organisations with access to Alphabet’s funding, fleet management and advanced mobility solutions via a network of 34 broker partners. LeasePlan has a direct sales channel (LeasePlan Go) for businesses operating small-to-medium-sized fleets of one to 100 vehicles and an indirect channel (Network) which consists of 100 franchise brokers. There are other major leasing companies with broker divisions aimed at SMEs. These include: Lex Autolease, which has around 120 partners, and Hitachi Capital Vehicle Solutions.
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 17
CONTR AC T HIRE VERSUS OUTRIGHT PURCHA SE
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■ VEHICLE FUNDING
considerably and the issue of what constitutes fair wear and tear is still a grey area. This can bump up the true cost of contract hire and can affect budgets.
OUTRIGHT PURCHASE Replacement cycles: As outright purchase is more flexible, fleets can decide at the last minute not to replace vehicles, without worrying about excess mileage charges or fees for additional wear-and-tear. As the replacement cycle can be changed easily, fleets can often feel as though they have more hands-on control. However, if a vehicle is sold early, the re-sale value may be less than expected, due to the vagaries of the used market. Mileage: Mileage is one of the largest factors to bump-up costs on outright purchase fleets. High-mileage vehicles are likely to incur greater maintenance costs as the vehicle deteriorates over time. Alongside condition, the age of the vehicle and how many miles it has clocked-up will also be a determining factor at disposal time. However, it is a balancing act as keeping a vehicle for a longer-than-average cycle could be beneficial. Some experts say the only context in which outright purchase is a valid option is when a company records very high mileages among its drivers and has a policy of running vehicles into the ground. Maintenance: Maintenance is another culprit for denting budgets on outright purchase fleets. Companies are responsible for ensuring vehicles are properly maintained and costs can vary depending on how they are treated. The types of
vehicle used will also determine maintenance costs so it is importance to source various quotes from suppliers. Make sure you understand the projected average maintenance costs. Remember, they will get higher towards the end of the holding period as time and miles take their toll. Make allowance for future expense and identify the best time to sell a vehicle. Cost savings: Businesses will be responsible for vehicle remarketing, as they have full control of their vehicles, so any windfall profits made at sale time will go straight back into the company. To ensure this happens, fleets must keep a stringent check on the age, mileage and condition of the vehicles, which will warrant high residual values at the end of the replacement cycle. Added costs: If vehicles are purchased with a variable loan and interest rates fluctuate, then monthly budgets could increase. However, whichever method is chosen for funding, whether it is a loan or a lump sum, capital will be tied up in the vehicles.
T OUTRIGHSE PURCHA
CONTR ACT HIRE
■ K E Y CO NSID ER AT I O NS What is your company’s tax position? Consider elements such as national insurance, VAT recovery, corporation tax recovery, and capital allowances. One of the reasons contract hire is one of the most popular funding methods is the advantage it offers in terms of VAT. In a contract hire agreement VAT will be added to the monthly rental but a company will be able to reclaim 100% if the vehicle is used only for business or 50% if there is any private use of the vehicle. The VAT on the maintenance and repair services included in contract hire is fully recoverable. If a company buys its vehicles, no VAT can be reclaimed unless the vehicle is used wholly for business. What services do you need? A huge part of contract hire is the provision of services. For example, daily rental, risk management (such as driving licence checks or driver training), fuel cards/fuel management and mileage capture can all be added to the contract, along with maintenance. Some leasing companies have a consultancy division and may offer a fully outsourced solution. What is your company’s attitude to risk? A company’s attitude to risk and a preference for having vehicles on or off the balance sheet will have a strong bearing on the funding method. Contract hire is ‘off balance sheet’ while outright purchase is ‘on balance sheet’. Balance sheet leasing methods are appropriate for
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businesses that benefit from the cash advantages of leasing but is ‘asset light’. Risk-averse companies are likely to favour contract hire as the residual value sits with the leasing company that owns the vehicle. What is your company’s ability to obtain credit and the price of that credit? Companies that outright purchase often favour this method because they are cash-rich. Otherwise, your ability to obtain credit and the price of that credit is important in the overall funding position. Do you have the in-house expertise to run an outright purchase fleet? Consider whether you have the expertise to handle vehicle disposal. Having the right data to work out when each vehicle can be sold at a profit is crucial. The cost of bringing in such expertise when it comes to disposal, if needed, must be factored in. Could multi funding be the best approach? Using contract hire for some vehicles and outright purchase for others can be a more cost-effective solution for some businesses, particularly where they have a variety of different drivers (high/low mileage, business need/perk). Where the profile is less varied, a single approach may be best. However, having more than one funding method may bring increased administration and some companies favour the simplicity of a single approach.
■ P RO S A N D CO NS: O U T RI G H T P U RCH A SE Pros ■ Once you have bought the vehicle it is yours and therefore it is entirely up to you if, and when, you choose to sell it. ■ There is no interest to be paid and therefore you are paying less for the vehicle overall. ■ If you decide to take out a loan, your repayments will be similar to what you would pay if you were leasing, but at the end of the term you will own the car. ■ Whether you take out a car loan or buy the vehicle outright, you can still claim the car as your own asset. Cons ■ The main disadvantage is the impact on cash-flow – it is unlikely you will recoup much of the cost of the vehicle if you decide to sell it. ■ The vehicle will be an asset on your balance sheet, but this will reduce over the years by depreciation, which will also reduce your profits. ■ For taxation purposes, the depreciation will get added back to your profits; but capital allowances can be claimed, which will reduce your taxable profits and therefore the amount of tax.
For more on fleets and tax legislation, visit: mydrivingbusiness.co.uk/ tax-legislation
Advertisement feature
Managing work-related road safety How to keep your drivers safe while also benefiting your business
‘R
oad risk management’ and ‘duty of care’ are terms that will crop up for any small business considering company vehicles, especially as the requirements to manage driver safety increase. Although tackling road risk management can seem daunting, it’s worth looking at how your business can benefit from a few simple actions to address driver safety. Unfortunately, accidents among fleet drivers are all too common on the UK’s roads. The Royal Society for the Prevention of Accidents (RoSPA) estimates more than 20 people are killed and 250 are seriously injured in at-work road crashes every week. Not only can such crashes bring utter devastation to your drivers and their families, but the human and financial penalties to your business and the wider community are also significant. The good news is that there are tools available that can quickly identify which of
your drivers fall into the ‘high risk’ category. Online risk assessments, from providers such as Lombard Vehicle Solutions (LVS), will detect which of your employees are most likely to be involved in an accident. You can then address any bad habits with on-road training, without the need for all employees to take time out. A growing number of small businesses are also turning to telematics technology, such as the ProFleet2 system offered by LVS, to help with driver safety. Such technology gives you a comprehensive insight into driving behaviour and alerts you to any issues, such as frequent speeding, that need to be addressed through training. Taking action in this way means you should not only see benefits including reduced accident rates and lower insurance costs, but also a saving in other vehiclerelated costs such as maintenance and general wear and tear. It can also help slash your fuel bill.
“More than 20 people are killed and 250 are seriously injured in at-work road crashes every week”
To find out more, contact Lombard Vehicle Solutions on 0117 908 6490 or visit www.lombardvehiclesolutions.co.uk Lombard Vehicle Solutions is the contract hire and fleet management product provided by ALD Automotive. Registered address: Oakwood Park, Lodge Causeway, Fishponds, Bristol BS16 3JA.
Another possible area to look at is vehicle choice. This includes making sure employees are driving appropriate vehicles – for example, not providing a sporty car to a young member of staff who hasn’t long passed their test – but also to see if there are more cost-effective or practical vehicle choices for your business. Consider looking at vehicle crash ratings too. The Euro NCAP crash test ratings are regularly updated with results for new vehicles and it has been estimated that a vehicle with the full five-star rating has a 36% lower fatality risk than a vehicle that meets the minimum crash test regulations set out by the UN. Such vehicles are likely to bring lower insurance premiums too. Finally, you should look at the issue of employees using their own vehicles for work. As the employer, your duty of care also extends to such vehicles, therefore you are advised to make checks on everything from driver licences and vehicle insurance to MoTs and general roadworthiness. Working with a third-party provider such as LVS can eliminate the administration involved in this, but other alternatives to consider include running pool vehicles, using daily hire or even looking at other ways of staff working, such as tele- or videoconferencing – yet more examples of how companies can save costs and improve productivity while also addressing safety.
■ VEHICLE FUNDING
SA L ARY SACRIFICE
12 steps toward running a salary sacrifice car scheme Tax-efficient programmes to fund employee vehicles are no longer just for huge firms, but are they right for yours? Sarah Tooze details how your business can set one up
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salary sacrifice car scheme is a tax-efficient way for organisations to provide employees with a new, fully insured and maintained car at a cost lower than they could achieve in the retail market. Salary is sacrificed before tax and National Insurance, which effectively means employees save money. A salary sacrifice arrangement means employees agree to give up part of their gross salary in exchange for a non-cash benefit, in this case a brand new car.
DECIDE IF IT’S RIGHT FOR YOUR COMPANY Most SME decision-makers would assume a company needs a significant number of employees for salary sacrifice to work, but new schemes are being devised to change that view. Fleet Evolution, for example, has customers with as few as 17 employees. Provided a company has a high staff retention rate, it will put a scheme in place with three orders. “If you’ve got 90% retention, it’s pretty much a risk-free benefit,” says Andrew Leech, managing director of Fleet Evolution. SG Fleet’s product, NovaLease, which launched
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Employees cannot enter into salary sacrifice if it means their pay drops below the minimum wage
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in November 2012, doesn’t require a set number of employees and there is no need to create a contingency fund or take out insurance to cover early termination costs as the contract is made directly with the employee. It anticipates take-up rates to be higher than the 3-5% expected on existing schemes. “In developing our product, we looked at the current solutions and we saw a lot of things that would put customers off,” says David Fernandes, managing director of SG Fleet. “A solution that creates risk for an employer to provide a voluntary benefit didn’t make sense to me. “The only real cost structure involved with NovaLease is that we do require a customer to be consumer creditlicensed, so they need to have a category C licence, which costs £1,000 for five years’ cover. “That’s about compliance with the Consumer Credit Act. We’re not hiding and trying to say it’s not consumer credit.” Staff wages are an important factor in salary sacrifice schemes, as employees cannot enter into salary sacrifice if it means their pay drops below the minimum wage. A high staff turnover could also make a company unsuitable. Organisations also need to consider VAT recovery. If they are VAT-exempt or have only partial recoverability of VAT, the net cost to the employee will be slightly higher than for organisations that have standard VAT recoverability. WORK OUT YOUR STRATEGY Set out your financial and operational objectives. Is the scheme a means of meeting your duty-of-care responsibilities? Is it a way to reduce emissions and meet environmental targets? Is it about recruitment and retention of staff? Another key decision is whether salary sacrifice will replace an existing company car scheme or whether the two will run side by side. Most organisations opt to offer salary sacrifice in addition to a traditional company car scheme.
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BE PREPARED FOR THE WORK INVOLVED “Don’t underestimate the amount of work required,” advises Phil Redman, fleet manager at IBM. The company first looked at the idea of salary sacrifice in June 2009, with the launch taking place 18 months later. The complexity of the scheme and whether it is replacing the existing car scheme can affect the time taken, but companies should be prepared for implementation taking at least three to six months.
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CHOOSE THE PROVIDERS The next decision is whether to bring in a flexible benefits provider or to manage the scheme internally. A funding provider also needs to be appointed. If you already lease, then your existing provider may be an easy option if they offer salary
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sacrifice or you may want to appoint another provider with more experience. It’s worth discussing how they will support you during and after implementation (particularly with regard to employee communication), any employment law and taxation issues, as well as looking at their pricing. INVOLVE OTHER STAKEHOLDERS The scheme will need support from multiple stakeholders, such as finance, HR, procurement, payroll, legal, tax, health and safety, and the board. Authorisation is another consideration. Will someone in HR approve vehicle orders or should authorisation be given at director level?
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UNDERTAKE A STAFF SURVEY Assess staff interest early on. See what sort of engagement you get. Will you get the uptake you need? The survey could also establish the types of vehicles staff are most interested in.
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THINK ABOUT VEHICLE CHOICE A key decision is whether to restrict choice in order to maximise manufacturer support or whether to offer a full range of manufacturers for employee choice, but control CO2 emissions. The lower the CO2, the greater the tax savings. Aim for less than 95g/km if you can. Employers can make additional savings by offering cars below 110g/km, as they attract 100% first-year writingdown allowances. A further benefit of low-emission vehicles is that they offer better mpg, helping employees with fuel costs.
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SET UP THE WEBSITE The online facility should show the range of cars available, the gross and net sacrifice amounts and the benefit-in-kind tax charge that employees would incur. It should also be easy for employees to understand pensions and legal matters and contract length. LeasePlan suggests the website should have a consumer look and feel, with searching based around lifestyle and budget rather than make, model and mileage format. Another factor to bear in mind is whether the system has real-time quotes. Older systems may have a rate book uploaded, which is updated on a monthly basis rather than in real time so an employee could place an order, go through the authorisation process and then when it arrives at the leasing company discover the price is no longer valid because there has been a manufacturer price increase.
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CHOOSE THE CONTRACT LENGTH Providers advise sticking to a two- or three-year contract. Minimising contracts to three years enables companies to adapt to government tax policies, allowing car choices to be amended if rules change. Longer contracts also expose the company to a greater risk of employees leaving the business, unless you opt for a novated lease, which is directly with the employee. If they leave the company, they take the car with them.
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MITIGATE THE RISKS Unless a company opts for novated leases, of the biggest risks it faces is being stung with early termination charges if an employee resigns or is made redundant. Other scenarios to consider are employees going on long-term sick leave or taking maternity or paternity leave, as the employees’ income will be reduced and they may no longer be able to sacrifice the required amount of salary. There are also excess mileage and end-of-contract damage charges to consider. A company could look at early termination insurance, with costs added to the monthly rental fee employees pay, or build up a contingency fund to cover potential costs, again levied through the vehicle rental. Another option is to include clauses in the terms and conditions that allow the company to take termination costs from a driver’s final salary. Processes also need to be established to collect fines and congestion charges or to handle insurance excess or requests to take the vehicle abroad. Pensions are another area where caution needs to be exercised as the scheme could impact on pension contributions or retirement income. You will need to discuss this with your pensions provider and make sure you adhere to their rules and staff are not disadvantaged.
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Minimising contracts to three years enables companies to adapt to government tax policies, allowing car choices to be amended if rules change
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CONTACT HMRC Although there’s no formal requirement to confirm a salary sacrifice scheme with HMRC – it is a contractual arrangement, not a tax change – it is good practice to do so. A tax adviser or your leasing company can help with notification.
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COMMUNICATE WITH EMPLOYEES Employee communication is key, whether by leaflets, intranet, emails, presentations, roadshows or drop-in clinics. Drivers need to understand company car tax and how the scheme works, early termination, excess damage charges and consequences of being under or over mileage, for instance.
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For more about funding and running business vehicles, visit: www.mydrivingbusiness. co.uk/managing-cost/
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 21
■ VEHICLE FUNDING
LONG-TERM RENTAL
Taking the long view: how rental can save you money Rather than leasing or buying outright, renting vehicles to meet short-term demand can free up cashflow and cut service and maintenance costs, writes Sarah Tooze
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istorically, rental has been viewed as a stopgap solution, but rental companies now offer flexible long-term rental products, allowing companies to hire a vehicle for 28 days or more. Long-term rental is thought to have been introduced to meet the requirements of supermarket delivery fleets, which needed to respond to short-term demands by adding vehicles without committing to a long-term lease. Daily rental was seen as too expensive, so long-term rental was created. “Fleets may choose long-term rental over leases for the associated flexibility,” says Carlos Montero, commercial director at FleetEurope. “Leases by their nature come with penalties if returned early, whereas rental offers the fleet manager options to end the hire without penalty. “Pro rata lease vehicles will be more cost-effective and base rentals will be lower, but what price do you put on flexibility?” However, leases will allow you to specify any options required whereas long-term rental can, at times, be restrictive on make and model or overall full specification. “If you are looking for standard commercial vehicles, then long-term rental may work for you,” says Montero. “Fleets are all very different and sometimes a mixture of the two may be required; leases for vehicles that will be core to the business or need bespoke specification with a mix of long-term rental on more standard specified vehicles that may require flexibility in termination.” One fleet that has switched to long-term rental is United Worldwide Logistics (UWL), which has reported significant savings and improved cashflow since working with Northgate Vehicle Hire. The South Wales-based company, which has a network of 360 UK and worldwide partners, has 21 light commercial vehicles and had previously outright purchased its vehicles, but its high mileage requirements became a costly issue. This arrangement also resulted in vehicle downtime costs of £500 to £1,000 per day, and in some instances the company was left without a vehicle for up to three weeks. Through its rental partnership with Northgate, which provides it with 10 vans, UWL has been able to remove the issue of downtime, thanks to being able to add vehicles
■ T H IN G S TO CO NSID ER How utilised are your vehicles? Can the rental 2 company supply in-house servicing and maintenance? Can the provider 3 meet any specialist equipment needs? What service and 4 support will you receive? Is the rate more 5 competitive the longer the rental? What are the 6 penalties for damage? What does the rental company class as fair wear and tear? Are there any high 7 mileage penalties? Is there a minimum 8 period? Does the provider 9 have young, leading badge vehicles? Is the latest 10 technology available? Are you simply 11 choosing the cheapest rental and not considering whether the make and model is right for your business?
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to its fleet at any time. With no ties or commitments, UWL is able to hand back the vehicles when it no longer requires them. This change improved annual cashflow by £10,000. Service and maintenance costs have been reduced by a further £10,000 per year. Previously, contracted vehicles were kept for four years, but UWL’s high-mileage requirement means its fleet is now renewed every 18 months. Momentum Instore, which provides installation and merchandising services for retailers, also finds the flexibility of rental meets its business needs. Every project is short-term, seasonal and difficult to forecast so rather than employing a large workforce with a correspondingly large company fleet, Momentum Instore uses 450 ‘floating’ drivers across the UK, all on temporary contracts. According to fleet administrator Helen Brislane, shortterm hire is the only cost-effective way to meet the project-related peaks and troughs in demand for vehicles. At any one time, the business averages about 40 rental vehicles, but the total swings between zero and 150, depending on the number and type of contracts, with average hire from one day to three months.
■ R EN TA L’S P LUS P O IN T S ■ No long-term financial commitment. ■ No early termination charges. ■ Set monthly fee. ■ Removal of depreciating assets from a company’s balance sheet. ■ No need to seek loans to fund vehicles. ■ Flexibility to change types of vehicles at any time.
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■ Vehicles will have the latest safety features, helping to meet duty-of-care legislation. ■ Vehicle emissions will be as low as possible, which will improve the business’s carbon footprint. ■ In-depth management information may be provided. ■ Breakdown and maintenance cover can be included in the cost.
■ C ARS
New and improved We look at the all-new cars and facelifted models that will hit the market this spring JAGUAR XE
ON SALE: May PRICE: From £26,985 CO2: From 99g/km WHAT’S NEW: The XE is Jaguar’s most significant car for many years. It puts the brand back on choice lists for drivers able to choose a BMW 3 Series, Mercedes-Benz A-Class or Audi A4. Unlike Jaguar’s previous car in this sector, it isn’t bound by the constraints of using Ford components. The Jaguar X-Type shared a floorpan, diesel engines and transmissions with the Ford Mondeo. The XE design and engineering team have had much more freedom
MAZDA2 ON SALE: March PRICE: From £11,995 CO2: From 89g/km WHAT’S NEW: Mazda’s small car is next in line to get the Skyactiv treatment. New engines and transmissions, along with reduced weight in construction, have paid dividends for the models (Mazda3, Mazda6 and Mazda CX-5) that have already undergone the transformation. They set new benchmarks in their classes for CO2 and fuel consumption at launch. The new Mazda2 comes with a choice of 1.5-litre petrol or 1.5-litre diesel engines, which seem rather large in this age of downsized three-cylinder motors. They may not set any records for emissions and fuel consumption, but they are competitive. The 1.5-litre engine is offered with a choice of power outputs, while the diesel is available in a sprightly 105hp variant. Mazda’s Skyactiv diesel is able to achieve Euro6 compliance without any additional exhaust aftertreatment.
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in creating a car with more typical Jaguar proportions. Jaguar is developing its own range of engines and the first of these on the market will be the XE’s 2.0-litre diesel. This will have a choice of two power and torque outputs: 163hp/280lb-ft and 180hp/317lb-ft. The 163hp version makes the XE the most fuel-efficient Jaguar ever made, achieving 75mpg and CO2 emissions of 99g/km on the combined cycle. The petrol engine range begins with the turbocharged, directinjection, 2.0-litre four-cylinder unit. It is currently sourced from Ford, but ultimately will be replaced by a Jaguardeveloped four-cylinder 2.0-litre. It’s available in 200hp/207lb-ft and 240hp/251lb-ft variants. The four-cylinder petrol engines lag behind rivals from BMW, Audi and Mercedes-Benz for fuel efficiency and CO2 emissions, so Jaguar must be itching to get production of its own petrol engines up and running to have a more compelling offer for customers (mainly retail) who prefer petrol. The XE will also be available with a 3.0-litre supercharged V6 petrol engine. Power and torque are 340hp and 332lb-ft. There is a new six-speed manual transmission as standard, with customers also being offered the choice of an eightspeed ZF automatic. One of the reasons the diesel engine is so fuel-efficient is the XE’s aluminium-intensive construction. About 75% of the body is aluminium, a far higher proportion than any of its rivals. It means the XE can offer excellent structural rigidity with less weight.
BMW 1 SERIES FACELIFT
ON SALE: March PRICE: From £20,245 CO2: From 89g/km WHAT’S NEW: The new BMW 1 Series line-up promises new engines, updated styling inside and out, and more equipment – including BMW’s green EfficientDynamics technology. There are five new diesel engines, including the 116d EfficientDynamics Plus, which emits 89g/km and has a combined fuel economy figure of 83.1mpg. It sits one benefit-in-kind tax band lower for the 2015/16 year than the previous efficient model. BMW says it has made a number of changes to improve the efficiency of its 1 Series. Aerodynamic improvements at the front end include an improved seal between the headlights and bonnet to optimise airflow. In terms of equipment, a Brake Energy Regeneration system is now standard, as is an optimum gearshift indicator and start/stop function, plus an ECO PRO mode, which can be activated with the Driving Experience Control switch.
HYUNDAI i40 FACELIFT ON SALE: April PRICE: TBC CO2: TBC WHAT’S NEW: The i40 gave Hyundai legitimate fleet credentials when it was introduced in 2011, and the new model will bring additional safety technology, an upgraded chassis and more power from its diesel engines. The six-speed automatic transmission will be replaced with a new seven-speed dual-clutch gearbox, improving fuel efficiency for automatic versions as well as rapid gear changes. The new automatic transmission will be offered on the upgraded 141hp 1.7-litre diesel. A 115hp diesel engine will also be available. Additional safety equipment will include a new smart main-beam system which monitors approaching traffic and automatically turns off the main beam to avoid dazzling other drivers, as well as road sign recognition, which displays the current speed limit on the driver information display. The new i40 will be available as either a saloon or Tourer estate – currently the most popular bodystyle.
FORD MONDEO VARIANTS
ON SALE: April PRICE: From £19,995 CO2: From 119g/km WHAT’S NEW: Ford launched the fourth-generation Mondeo at the end of 2014, but will be adding a number of new variants in April that will give the range greater breadth. There is already a choice of three diesel and two petrol variants in hatchback and estate guises, as well as the hybrid saloon. Hatchback and estate models will gain an entry-level petrol model using the three-cylinder 1.0-litre Ecoboost engine already found in other Ford models. Despite its small engine capacity, it should be capable of powering the Mondeo. It will produce 125hp (slightly more power than the normally aspirated 1.6-litre engine it replaces in the old Mondeo range), and offer CO2 emissions from 119g/km.
At the top end of the range, there will be a more powerful twin-turbo 2.0-litre diesel producing 210hp. CO2 emissions for this engine are 124g/km and fuel economy is 58.8mpg. There will also be an all-wheel drive option on some versions for the first time, which costs £1,500 more than the equivalent front-wheel drive model. Later in the year, Ford will debut its upmarket Vignale sub-brand on the Mondeo. It is a strategy that is aimed at winning back some of the drivers who have deserted Ford for premium-badge cars, and provides high equipment levels as well as the best customer service.
mydrivingbusiness.co.uk ❚ Spring 2015 ❚ 25
■ C ARS
MERCEDES-BENZ CLA SHOOTING BRAKE
ON SALE: March PRICE: From £25,500 (estimated) CO2: From 101g/km WHAT’S NEW: Mercedes-Benz is increasing its presence in the UK business market by adding new compact models. The CLA Shooting Brake is an estate version of the CLA four-door coupé, introduced in 2014. Sharing engines and technology with its sister model, the CLA
HONDA CR-V FACELIFT
Shooting Brake will be available with a special ultra-aerodynamic version with CO2 emissions of 101g/km. The load compartment offers a capacity that ranges from 495 to 1,354 litres. All versions have as standard a start/stop function and all-wheel drive is available at the market launch, initially in the CLA 250 4Matic and CLA 250 Sport 4Matic. Diesel variants in the form of the CLA 200 CDI 4Matic and CLA 220 CDI 4Matic will follow in September.
FORD S-MAX
ON SALE: March PRICE: From £22,340 CO2: From 115g/km WHAT’S NEW: The CR-V gains a cleaner, sharper look in its facelifted version, but of more interest to business users will be the fascinating new engine. Honda will drop the 150hp 2.2-litre diesel that has powered fourwheel drive versions of the car to date and replace it with a 160hp twin-turbo version of the highly regarded 1.6-litre diesel that has been offered in front-wheel drive variants. It will mean dramatically reduced CO2 emissions for four-wheel drive CR-Vs. Honda will also offer a new automatic gearbox option. Automatic versions of the CR-V will see the most significant improvements in CO2 emissions and fuel efficiency when compared with outgoing models.
ON SALE: Spring PRICE: From £23,500 (estimated) CO2: From 119g/km WHAT’S NEW: Sharing a platform with the latest Mondeo, the S-Max will be new from the ground up, as well as offering the latest generation of petrol and diesel engines. These include the new 160hp 1.5-litre and 240hp 2.0-litre EcoBoost engines, plus a 120hp 2.0-litre TDCi and revised 150hp and 180hp 2.0-litre TDCi engines. All-wheel drive will also be offered for the first time. The S-Max will be the first Ford to feature dynamic LED headlamps with glare-free high-beam to maintain maximum illumination without distracting other road users. Ford’s pre-collision assist is a first and will help reduce the risk and severity of accidents, even at high speeds.
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FIAT 500X
ON SALE: April PRICE: From £17,595 CO2: 109g/km WHAT’S NEW: Fiat returns to the compact crossover segment with the 500X. Its partner is sister company Jeep, and the 500X shares many components with the new Jeep Renegade. But, unlike the rugged Jeep, the 500X has a more sophisticated look, although there will be two distinct model lines – one of which will have a more off-road focus. The 500X will have a range of powertrain options. Front-wheel drive, petrol-powered models are either equipped with a 110hp, 1.6-litre engine with a five-speed manual gearbox, or a 140hp, 1.4-litre Turbo engine, with either a new six-speed manual gearbox or an optional six-speed twin-clutch transmission. The all-wheel drive petrol model, which is equipped with first-in-class, ninespeed automatic transmission as standard, is powered by a 170hp, 1.4-litre Turbo engine. The front-wheel drive diesel range consists of the 95hp, 1.3-litre, with five-speed manual gearbox, and the 120hp 1.6-litre a six-speed. The four-wheel drive diesel is the 140hp 2.0-litre, with a six-speed manual or nine-speed automatic.
SEAT LEON ST CUPRA ON SALE: March PRICE: From £28,505 CO2: From 157g/km WHAT’S NEW: Seat’s brand image is meant to be sporty and dynamic and it has offered go-faster variants in most of its model ranges. While there is a long tradition of Cupra models as hot hatches, they have never been seen as hot estates – something Seat’s sister company, Škoda, has done successfully over the years with vRS versions of the Octavia and Fabia estates. The first Cupra version of the Leon ST uses the same powerful turbocharged petrol engine that was launched in the Leon Cupra hatchback in 2014, but includes the practical features expected in a roomy estate car. The new generation of dynamic chassis control developed specifically for the Leon Cupra is even more sensitive than that available with the Leon FR, adapting the chassis characteristics to the prevailing conditions in a matter of milliseconds.
ŠKODA FABIA ESTATE
ON SALE: March PRICE: From £12,460 CO2: From 89g/km WHAT’S NEW: The Czech manufacturer’s new Fabia estate will be launched in March, following the hatchback that went on sale toward the end of 2014. Available in S, SE and SE-L equipment grades, boot volume ranges from 530 litres to 1,365 litres, while the load area is wider than in the previous Fabia estate. Like the Fabia hatchback, the passenger area is roomier than in the
car it replaces, while the entry-level S models feature six airbags, DAB radio, Bluetooth, stop/start and electric front windows as standard. SE models add manual air-conditioning, alloy wheels, upgraded audio, mirror link for smartphones, USB and SD card connections. This trim level also includes a three-spoke leather steering wheel, height-adjustable driver and passenger seat, upgraded trip computer and black roof rails. Range-topping Elegance models add 16-inch alloy wheels, climate control air-conditioning, light assistant, cruise control and keyless entry system.
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EVEN MORE REASONS TO GET IT WORKING FOR YOU. LOVES LONG DAYS ON THE ROAD. Days don’t feel as long when you’ve got all this fitted as standard: j Bluetooth hands-free function j DAB digital radio j USB audio interface j Keyless-Start j Heated mirrors and washer jets
KEEPS YOUR TEAM ON TRACK. MINI Connected can put all the functionality of a business smartphone safely into an optional Central Display to help your team stay connected, on the road and on the go. It’ll display contacts, calendar appointments and share destinations with the Sat Nav, so your best people will always be on the best route to the next job.
THEY ALL WANT TO WORK FOR YOU. The new MINI 5-door Hatch means there are now eight MINI models to choose from. So creating a fleet that’s made to measure for your business has never been easier. From the spacious, fuel-efficient MINI Countryman with CO2 emissions from 111g/km and up to 67.3 mpg (combined), to the stylish MINI Paceman, getting a big personality working for you costs less than you might think.
GET HEAPS OF PERSONALITY (AND DOORS) WORKING FOR YOU. To book your Fleet Demonstrator* or find out more, call 0800 777 113. To find out how MINI can work for you, please visit www.mini.co.uk/corporate
Official Fuel Economy Figures for the MINI Range: Urban 27.2–72.4 mpg (10.4–3.9 l/100km). Extra Urban 47.9–91.1 mpg (5.9–3.1 l/100km). Combined 37.7–83.1 mpg (7.5–3.4 l/100km). CO2 Emissions 175–89 g/km. Figures may vary depending on driving styles and conditions. Test drive subject to status and availability. *
IT’s A WINNER WITH 3 DOORS. (imagine what 5 can do). THE BUSINESS CAR SUPERMINI OF THE YEAR 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004 AND 2003, NOW COMES WITH 5 DOORS.
THE NEW MINI. now with 5 doors.