SMTA Monthly Bulletin March 2024

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FCA PAUSES ALL GAP INSURANCE SALES

This is a reminder to all members who GAP affects, that the FCA has asked insurance companies to pause selling GAP insurance by the end of this month.

The FCA is concerned that the product is failing to provide fair value to some consumers. The regulator will consider firms’ proposals for different distribution channels and recognises that some channels may be able to address these concerns more quickly.

The industry awaits with anticipation any further developments on this matter.

The approved insurance broker to the Scottish Motor Trade Association

AGENCY MODEL IS LEADING TO FALLING STANDARDS FOR FLEET CUSTOMERS, SAYS AFP

Adoption of the dealer agency model appears to be leading to poorer quality vehicle deliveries in at least some instances, says the Association of Fleet Professionals (AFP).

Members of the organisation have complained of a fall in standards, with electric vehicles (EVs) being delivered with little charge and internal combustion cars with only a small amount of fuel.

Paul Hollick, chair at the AFP, said: “We are hearing from a number of members that there has been a noticeable fall in delivery standards for manufacturers that have switched to agency, with the perception being that there is a much reduced incentive for the local dealers to maintain a high level of service to fleets.

“We are hearing stories, for example, of prestige EVs being delivered with almost no charge and similar situations for petrol cars, which is obviously annoying for the fleet customer who has ordered

an expensive, high-quality asset and expects commensurate standards. It’s inconvenient and leaves a poor impression.

“Under the old system, fleets would simply take their business to another dealer holding the same franchise but now that is not really possible, with the local dealer effectively having a monopoly over local deliveries. At least one member has complained that they have just placed more than half a million pounds worth of orders with a manufacturer in the full knowledge that the local dealer will make very little effort when it comes to delivery.

“How this situation is resolved is difficult to say although there are some signs that the future of agency within the motor

industry is in flux. It certainly adds to the long list of gripes that fleets currently have when it comes to their relationships with some manufacturers.”

The AFP operates a 28-point Dealer Standard, designed to ensure that fleet cars and vans are delivered in excellent condition to the end user, who is then shown the fundamentals of how to operate the vehicle and always treated courteously.

Hollick added: "Several major dealer groups have signed up to this accreditation since its launch in 2022 and it is working well in those instances. One potential solution would be for manufacturers operating under agency arrangements to ensure all of their dealers comply with the AFP standard.”

USED VAN VALUES STABILISE AS SOLD VOLUMES INCREASE SIGNIFICANTLY

Used light commercial vehicle (LCV) values remained stable last month at BCA, with buyer engagement and stock mix improving.

Average values were £8,740 across the month, down £24 (0.3%) on January and up by 8.7% compared to December’s low point.

Performance against guide values lifted by one percentage point to 99.3% over the month and sold volumes increased significantly as momentum continued from January, reported BCA.

The slowly improving economic backdrop continues to support the rising confidence felt in the used LCV sector, says BCA.

Stuart Pearson, BCA UK’s chief operating officer UK, explained: “The confidence

we saw emerging at the start of 2024 has continued into February with excellent buyer engagement, firm prices and an improved churn of stock. “Our daily online light commercial vehicle sales allow us to track sentiment very closely and ensure our sellers and buyers are aligned on market valuations.”

OVER 1.2M EVS EXPECTED ON UK ROADS BY 2025

The number of electric cars on UK roads will increase by 24% to 1.24m by the end of 2024, according to the latest estimates New AutoMotive.

The transport research organisation’s latest State of the Switch report said the jump will be down to the Zero Emissions Vehicle (ZEV) Mandate which came into force in January.

The mandate requires car manufacturers to meet an increasing percentage target of EV sales.

If every car manufacturer hits the sales target outlined in the legislation, the number of EVs could rise further to 1.3m.

The policy is expected to bring the price of some mass market EVs down by up to £10k as car makers race to meet this year’s target of 22%. While the 22% ratio is in place, not every manufacturer will have to hit that this year as they can

mitigate EV sales mix ratios with a credit system.

However, AM understands some brands are incentivising retail networks to get that EV sales mix up and to help support customers with the right information to help them move into an EV where suitable.

Dealers have also shared concerns that the ZEV could create a forced EV market in 2024.

Other factors encouraging EV uptake include the 30 to 80% cheaper cost per mile when compared to petrol and diesel vehicles and the UK’s increasingly reliable charging infrastructure.

Other key findings from the report include predictions on how the cost of charging at home will fall a further 22% over 2024, while petrol and diesel prices are expected to stay steady.

The report also sets out a wide range of policy recommendations to help accelerate the UK’s transition to electric cars further.

These include launching a government backed calculator to help drivers work out the savings from switching to electric, and policies to encourage higher mileage drivers to switch to EVs.

FRAUDSTERS MORE LIKELY TO TARGET EVS WHEN MANIPULATING MILEAGE

Electric

vehicles

are more likely to have had their mileage tampered with by fraudsters, according to vehicle history checking company carVertical.

The research has found that UK drivers overpay by 29% on fraudulently clocked cars, on average. Fraudsters alter a vehicle’s displayed mileage because buyers are more likely to pay more for a vehicle that has been driven less.

Matas Buzelis of carVertical said: “EVs may be among the newest cars on UK roads, but their modern technology can actually make them easier targets for fraudsters. “Buying a clocked car can leave drivers hugely out of pocket. It also means they are left with a vehicle

that has been driven for many more miles than they thought and could have mechanical problems down the road.”

In total, 2.6% of UK used EVs checked by the platform have had their mileage tampered with. Petrol cars are 14% less likely to have been clocked.

Having a newer system may be a pitfall of owning a modern EV as digital technology is considered easier to manipulate than mechanical systems in older cars.

Teslas are the most common EVs to have their history checked on carVertical by potential buyers, a fifth of EVs checked on the platform are the Tesla Model S. “If you are buying a used car, it is important to check its history so you do not buy one which could cause you major problems and cost you hundreds, or even thousands, of pounds in repairs. Only a history check can tell you if a used car has been previously clocked or damaged,” Buzelis warned.

MOT FORECAST VOLUMES APRIL 2024

TRADE SNIPPETS

Seat sets sights on overhaul of all its cars

Article courtesy of AM Online

ACEA February figures highlight 10.1% rise in EU car sales

Article courtesy of Motortrader

JLR ramps up green plans by recruiting 250 ‘electrification engineers

Article courtesy of CarDealer Magazine

The curious case of the 2,264% increase in exports of cars from the UK to Azerbaijan

Article courtesy of CarDealer Magazine

Hyundai to reduce network partners as part of “future proofing” plan

Article courtesy of AM Online

MINI and BMW identified as top brands for customer loyalty

Article courtesy of Motortrader

UPCOMING SMTA EVENTS

FEMALES IN FOCUS

ONTICKETS SOONSALE

FRIDAY 20TH SEPTEMBER 2024

GRAND CENTRAL HOTEL, GLASGOW

We are delighted to hold our Females in Focus lunch this year at Grand Central Hotel in Glasgow on Friday 20 September 2024.

This lunch is always such a highlight of our event calendar and we are proud to be able to run an event that highlights the many career paths available in the motor trade to females. The event will again have an inspiring panel of business women sharing their career stories and insights!

Full details will be available soon, in the meantime any queries can be emailed to events@smta.co.uk

Sponsorship items are available please email wendy.hennessy@smta.co.uk for information.

SMTA ANNUAL DINNER

THURSDAY 24TH OCTOBER 2024

HILTON HOTEL, GLASGOW

We are so excited that we’re announcing our guest speaker in this bulletin, And it is none other than THE STIG! Yes, it is the man in the white suit from Top Gear also known in real life as Ben Collins will be our guest speaker.

As a respected figure in the world of motorsports, Ben has additionally been the stunt driver to some of the biggest blockbuster films in modern cinematic history, including The Dark Knight Rises, Quantum of Solace and most recently Skyfall.

Sponsorship items are available please email wendy.hennessy@smta.co.uk for information.

Telephone

Norman Stirling – 07917 095014

Membership Development Manager

Marcus Lawrence – 07375 057561

Territory Account Manager, Western Region

Stuart Kennedy – 07375 057560

Territory Account Manager, Northern Region

David Innes – 07789 264228

Manager, Support Services

Gordon Laing – 07799 732124 Support Services Consultant

Wayne Lindsay – 07729 045666 Support Services Consultant

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Moira Gaynor – 0131 331 5510 Company Secretary/Finance Manager