Why are things changing?
According to government statistics, cars are responsible for around 9% of UK CO2 emissions. Car manufacturers have been set a target of reducing average emissions of new cars to 130g/km by 2012, and the government has introduced new tax rules to encourage people to choose cleaner vehicles.The changes introduced on 1 April 2009 will mean that all motoring taxes give businesses an incentive to switch to low emission, and therefore more fuel efficient, vehicles. They have major cost repercussions for fleet managers and give a real financial incentive for those switching to lower emission vehicles.Organisations that choose cleaner vehicles will now be improving their balance sheet as well as their corporate social responsibility (CSR) credentials. The Energy Saving Trust estimates that British businesses could save £2.6bn by switching to greener fleets.

What is changing?
From next April, 160g/km becomes a key CO2 emissions figure, replacing the previous £12,000 ‘Expensive Car’ threshold. Using it as a breakpoint, two new accounting incentives have been introduced to encourage businesses to choose cleaner cars.The cost of owning a business car
From 1 April 2009, cars with CO2 emissions above 160g/km will receive a 10% writing down allowance, while those at or below 160g/km will attract a 20% allowance. In effect this means that organisations buying a vehicle emitting 160g/km or below outright will be able to offset twice as much of the cost of its depreciation against their corporation tax bill.
There is an even greater incentive for firms willing to buy vehicles that produce less than 110g/km of CO2. The government has said that, until 2013, it will allow companies to write off the full cost of these cars in the first year.The cost of leasing a business car
From 1 April 2009, companies will be able to offset 100% of their leasing payments against their tax bill if the vehicle is below the 160g/km threshold, irrespective of its capital cost. For leased cars emitting more than this threshold, they will only be able to claim 85% of the financial element of the rental.

When is it changing?
The new tax regime will be applied to all new business cars registered from 1 April 2009. The Government has yet to confirm how it will affect vehicles acquired before this date.What does it mean for business car owners?
The BVRLA successfully lobbied the Treasury to ensure that the new corporation tax arrangements will reduce the accounting burden for business car owners and offer a realistic incentive for them to choose lower emission vehicles.From 1 April 2009, the new rules will make it more tax efficient than before to lease a company vehicle that emits 160g/km of CO2 or less: The tax changes will also relieve a major administrative burden from accounting departments, who now only have to worry about whether a vehicle has emissions above or below the threshold to work out their writing down allowance or lease rental restriction.What impact is the tax change going to have?
The company car sector is already reducing CO2 emissions more quickly than the overall UK car market, and the new tax rules will accelerate this trend. According to figures from BVRLA member fleets, average company car CO2 emissions have fallen 6% since 2003, to 157.4g/km. This compares to 164.9g/km, the average new car CO2 figure given by the Society of Motor Manufacturers and Traders (SMMT).The BVRLA predicts this reduction will accelerate over the next few years as firms start to adopt a policy of only using low emission vehicles.What should leasing companies do?
The changes are only months away, so leasing companies need to take action now to ensure a smooth transition to the new taxation rules for themselves and their customers. Accounting departments will need to be made aware so that they can update their systems. Future leasing quotes will also have to be adjusted to take into account the new all important CO2 emissions benchmark for cars of 160g/km.Members will also need to update their sales and marketing collateral and websites, giving their customers plenty of warning of the changes and their implications.

What should rental companies do?
For the first time, daily rental companies will be included in the scope of the new corporation tax changes, whether they lease or purchase their vehicles. All daily rental companies, irrespective of whether they lease or buy their rental cars, are advised to examine their fleet acquisition policies in this light.Daily rental companies leasing their cars are currently not impacted by the ‘Expensive Car’ lease rental restriction regime. In other words they can claim 100% tax relief on any cars they lease. However, from April 2009, if a daily rental company leases a car which produces more than 160g/km of CO2 they will only be able to claim 85% of the lease rental payment against their tax bill.Will corporate car rentals be affected by the April 2009 changes?
Possibly. It still remains unclear whether a company hiring a rental car emitting more than 160g/km of CO2 will also be hit by the lease rental restriction, i.e. will be restricted to only claiming 85% of the rental against their tax bill. The Treasury is expected to issue further guidance on this issue shortly.

A lawyer has warned fleet managers of the potential risks of accepting a replacement car from the at-fault party in the event of a collision.

The warning follows a recent case of an at-fault driver handing an information card to the potential claimant in a bid to avoid expensive and protracted dealings with a credit hire company.

The card gave details of the driver’s employer and offered to assist with vehicle repairs and arrange a replacement vehicle free of charge.

The claimant rejected the offer and at a subsequent hearing was told he had acted unreasonably. Damages were reduced as a result.

A judge has commended the scheme which, if properly formulated, could offer fleets an effective way of avoiding credit hire claims loss.

But a leading lawyer says there are risks associated with such a scheme, with vehicle suitability and condition being the main health and safety considerations.

“This is quite a significant case and is likely to be appealed further,” said Paul Davies, partner and head of Corclaim – a division of Harvey Ingram LLP solicitors and member of car fleet operators’ association ACFO.

He asks if an employee is involved in a no-fault accident and the company hires a replacement vehicle, will those costs be recovered if the third party offers a company car and should the employee accept the offer or follow the company’s own procedures?

“If a company simply takes a hire car from a third party, it cannot vouch for the safety of the vehicle. If that vehicle was defective it could be faced with claims under Work Equipment Regulations and Corporate Manslaughter Legislation.

“The fact that the car was provided by a third party would not remove the company’s health and safety responsibilities and this may provide a good reason for not taking up offers from third parties involved in accidents.

“If a company simply takes a hire car from a third party, it cannot vouch for the safety of the vehicle. If that vehicle was defective it could be faced with claims under Work Equipment Regulations and Corporate Manslaughter Legislation. “ - Paul Davies,

A lawyer has warned fleet managers of the potential risks of accepting a replacement car from the at-fault party in the event of a collision.

The warning follows a recent case of an at-fault driver handing an information card to the potential claimant in a bid to avoid expensive and protracted dealings with a credit hire company.

The card gave details of the driver’s employer and offered to assist with vehicle repairs and arrange a replacement vehicle free of charge.

The claimant rejected the offer and at a subsequent hearing was told he had acted unreasonably. Damages were reduced as a result.

A judge has commended the scheme which, if properly formulated, could offer fleets an effective way of avoiding credit hire claims loss.

But a leading lawyer says there are risks associated with such a scheme, with vehicle suitability and condition being the main health and safety considerations.

“This is quite a significant case and is likely to be appealed further,” said Paul Davies, partner and head of Corclaim – a division of Harvey Ingram LLP solicitors and member of car fleet operators’ association ACFO.

He asks if an employee is involved in a no-fault accident and the company hires a replacement vehicle, will those costs be recovered if the third party offers a company car and should the employee accept the offer or follow the company’s own procedures?

“If a company simply takes a hire car from a third party, it cannot vouch for the safety of the vehicle. If that vehicle was defective it could be faced with claims under Work Equipment Regulations and Corporate Manslaughter Legislation.

“The fact that the car was provided by a third party would not remove the company’s health and safety responsibilities and this may provide a good reason for not taking up offers from third parties involved in accidents,” added Mr Davies.

The current financial crisis that is affecting almost the whole of the West is making life difficult for everyone. Getting credit for car leasing during the UK credit crunch gets more difficult every day. At one time lenders seemed to be falling over themselves to finance and fund cars on contract hire and leasing. If it is guaranteed car finance that you are after then the lender will want a number of questions satisfactorily answered before any arrangements for the finance can proceed.

In the current financial crisis the vast majority of UK lending agencies will want to do a thorough credit check before they will agree the finance. If you have ever had financial troubles regarding credit card payments or mortgage payments then these could adversely affect your credit rating and your chance of getting a car. In the UK companies will pass on your details to a credit agency when you apply for finance and the potential lender can ask to see your credit history.

If you intent to apply for a car leasing then it might be worth your while to check your credit rating first, nowadays you can get such a report online. If you have got a black mark, even though you may have since cleared the debt, then it is worth contacting the company in question and asking them to alter their entry on the report. It could save you a lot of money in future payments.

You may need to produce copies of your bank statements for the last six months to show to the potential lender, who will be looking for interest charges and unauthorised overdrafts. They`ll also be looking at when money comes into your account and at your spending habits. Another area that potential lenders will want information on, is your work history for the last two or three years – this is to give them some assurance that you will be able to pay back any money they will lend you. If these things go through satisfactorily then you stand a good chance of getting a car finance, even in the credit crunch.

A steady income is a must when you make an application to borrow money and financiers are more likely to be well disposed to you if you have been in the same job for two years or more. If you do have an adverse credit rating then you might be required to put down a larger deposit. When you do this it can increase your chances of being approved for a car leasing.

This advice is general, it may apply in many instances but in the final analysis each request credit is treated on its own merits. Once you have applied for credit and been given the finance then you need to think about car insurance. There are plenty of insurance companies in the UK, which means they are quite competitive and it might be difficult getting premiums at a price you want. Nonetheless, when you take delivery of a car then the next thing you need to think about is car insurance.

As millions of families set off on the great Easter getaway, Britain’s biggest motoring organisation reported the cost of diesel fuel has risen to a record high.

And, said the AA, drivers of diesel-powered vehicles are also suffering from faster rises than those hitting owners of petrol-engined cars.

The average price of diesel in the UK is now 114.25p a litre - a near-5p rise on the average price a month ago. Average petrol prices are now at 106.75p a litre - 2.74p more than a month ago.

A litre of diesel is now 7.49p more expensive than petrol, compared with 5.1p at the start of the year and the previous record of 5.67p in November 2006.

The AA said a diesel car, which costs on average £1,400 more than its petrol equivalent, usually takes more than 45,000 miles before the savings from greater fuel efficiency recoup the extra cost of purchase.

The 2.39p-a-litre increase in the petrol-diesel price gap since the beginning of the year has added on average a further 1,243 miles to the break-even distance - 14% of the average annual car mileage.

For petrol car owners, this month’s 106.76p-a-litre average price is 17.73p more expensive than this time last year. This is adding £8.62 to the cost of filling up the typical 50-litre petrol tank.

Families with two cars are now dealing with a £36.93 hole in their monthly budgets from the extra cost of petrol compared with the same period in 2007.

The cheapest petrol at present is to be found in Yorkshire and Humberside (106.7p a litre on average), while the dearest is in London (107.6p). Wales has the highest-priced diesel (115.1p) while the least expensive is to be found in north west England (113.6p).

The AA said those filling up with diesel this Easter would do well to go to supermarkets where the average price is 111.64p a litre. Supermarket petrol averages 105.18p a litre at present.

AA president Edmund King said: ‘Diesel cars accounted for 40.2% of the 2.4m new cars sold in Britain last year, compared with just 13.8% in 1999.

‘The dash for diesel continues in the UK, with motorists primarily trying to reduce their fuel costs, but with the added benefit of reduced CO2 emissions. However, diesel is more expensive than petrol and the differential is growing. Consequently, buying a diesel is not an automatic switch to cut-price motoring - particularly at current prices.’

He went on: ‘For many low-mileage divers, buying a diesel is a false economy. The AA urges anyone considering the switch to a diesel car to research their motoring costs thoroughly, including start-up costs, fuel efficiency, tax disc band, annual mileage - and leeway in their calculations for petrol-diesel price changes.’

Recent changes to Regulations mean that, from 1January 2008, all minibuses used commercially in theUK will have to be fitted with tachographs.A minibus is a vehicle adapted to carry between nine and sixteen seated passengers in addition to the driver. Ingeneral, commercial use means any passenger-carryingactivity by drivers who do not hold Section 19 or 22permits (issued to voluntary and community groups orschemes) or who are not unpaid private individuals.Tachographs and Driver Cards

Minibus operators have until 31 December 2007 to complywith the requirement to fit tachographs to minibuses usedfor commercial purposes.Old-style waxed card tachographs are being phased out infavour of digital versions, but it is still permissible toretrofit the analogue type to minibuses that were firstregistered before 1 May 2006.Digital tachographs require the minibus owner or operatorto also have a smart “company card” to operate eachvehicle. It is used to periodically download data from thedigital tachograph, and from driver cards, to check thatthe drivers have complied with the working hours rules.Driver cards are specific to individual drivers and are onlyavailable from the DVLA. The cards are valid for five yearsand cost £38 (allow two weeks for cards to arrive aftersending off the application form).Since April 2007, where a minibus is used for commercialservice in the UK, drivers have to observe the followingDomestic Drivers Hours Rules:• Daily driving: maximum 10 hrs on any working day.• Continuous driving: 5.5 hrs, then a break of 30 mins.Breaks amounting to 45 mins must be taken within anyperiod of 8.5 hrs.• Length of working day must be not exceed 16 hrs.• Breaks should be at least 15 minutes in duration.Ultimately, it is the driver’s responsibility to ensure thathe or she is observing the drivers’ hours rules and usingthe tachograph correctly.More information

VOSA (Vehicle Operator Services Agency):www.vosa.gov.ukDVLA (Driver and Vehicle Licensing Agency):www.dvla.gov.ukDepartment for Transport:www.dft.gov.ukRelevant information on Government transport portal:www.digitaltachograph.gov.uk/

Porsche is to mount a legal challenge to Ken Livingstone’s decision to raise the London congestion charge from £8 to £25 for the highest-polluting vehicles.

The luxury car company said it believed that the increase was unfair and wouldn’t actually help the environment. It plans to write to the Mayor of London this week giving him 14 days to respond before it applies for a judicial review. “A massive congestion charge increase is quite simply unjust,” said Andy Goss, managing director of Porsche Cars GB. “Thousands of car owners driving a huge range of cars will be hit by a disproportionate tax which is clear will have a very limited effect on CO2 emissions.” Mr Goss claimed that the higher rate of tax on large vehicles will damage London based-businesses and put off rich non-domiciled entrepreneurs from settling in London. “Successful people from across the world will start to think twice about basing themselves here if they think they are going to be used as cash cows for City Hall,” he said. “The proposed increase will be bad for London as a whole and will send out the signal that it is not serious about establishing itself as the best place in the world to do business.”

From October 27, all vehicles emitting more than 225 grams of carbon dioxide per one kilometre will see their congestion charge rise to £25 a day, as will those registered before March 2001 which have engines larger than 3,000cc. At the other end of the scale, vehicles emitting less than 120g/km will no longer have to pay to enter central London at all. The changes mean that 17 per cent of the cars currently being driven in the charge zone would be liable for the £25 charge, while a mere two per cent would qualify for the total discount. A spokesman for Mr Livingstone hit back, claiming: “Porsche’s threatened legal action is a double attack on Londoners. “First, Porsche are trying to deprive Londoners of their democratic right to decide in the mayoral election on May 1 whether they want gas-guzzling and polluting cars to drive in London when there is absolutely no need for them to do so. “Second, they are trying to impose on all Londoners unnecessary levels of pollution and greenhouse gases by a tiny minority. “No-one is allowed to throw their rubbish in the street and Porsche should not be allowed to impose gas-guzzling, polluting cars on Londoners who do not want them.”

Porsche’s plea found little sympathy from environmentalists. Tony Juniper, the director of Friends of the Earth (FoE), said: “Porsche has founded its business on the promotion and supply of highly polluting vehicles. “Along with the rest of the German car industry they are desperately resisting the strong measures needed to tackle the car industry’s contribution to climate change. “Instead of spending time and energy battling these popular initiatives, such as the congestion charge, it would be more appropriate for Porsche to put its effort into making a new generation of much less polluting vehicles.” According to FoE figures, 44 of the 46 models in Porsche’s range would face the £25 charge. Its most polluting model, the Cayenne Turbo S, emits 378g of CO2 per kilometre, about four times as much as the most fuel efficient vehicles on the market. Opponents of large off-road vehicles being used in cities also ridiculed Porsche’s plea. Blake Ludwig, campaigns director for the Alliance Against Urban 4×4s, said: “We know from the enormous amount of support for our campaign, and from our own surveys, that charging the most polluting cars a higher congestion charge is already very popular with the public. “When we started campaigning for this measure in 2005, we asked 5,400 shoppers in central London their opinion and 95 per cent agreed with the idea.” But among motoring organisations and drivers there were qualms about the Mayor’s new charge regime. Edmund King, of the RAC Foundation, said: “We are concerned that the Mayor has changed his scheme from a congestion charge to an emissions charge almost overnight. “Larger families with some people carriers or estate cars will also be hit. These families in London tend to do lower mileage, use public transport more and keep their vehicles longer. The (car tax) band G people carrier in London will often produce far less CO2 than a smaller vehicle elsewhere due to lower mileage. “A report for Transport for London on the scheme has already warned that ’the accessibility and social inclusion of children and Asian people in large families could be negatively affected by the proposed scheme should their family car incur the higher charge until their vehicles were replaced by lower emission alternatives’. “Many ordinary families in London will be hit by these extortionate charges as they will be unable to replace their vehicles by October. “The Government should take a lead on how to reduce the environmental impact of vehicles rather than having different local authorities cashing in on their own schemes.” Charlie Mullins, managing director of Pimlico Plumbers in central London, said: “I am fully behind Porsche’s call for a judicial review. The congestion charge was supposed to be about getting London moving and not a money-making exercise thinly-disguised as an environmental issue.”

DIESEL-powered cars took a 45.3% share of the November new car market, bettering the 45% rate of December 2005, when sales were boosted by regulatory company car tax changes.The recent growth follows consumers attempting to lower their CO2 emissions and improve the efficiency of their vehicles at a time when fuel costs have risen significantly, according to the Society of Motor Manufacturers and Traders.Diesel registrations last month totalled 71,835, up 10.2% year-on-year, to take year-to-date registrations to 907,453 (up 7.5%) and market share to 40%.

Total new car sales in November jumped 2.2% to 158,735 (November 2006: 155,315) - the best November volume since 2004. It means that new car registrations in 2007 total 2,266,047, up 2.2% on 2006’s 11-month total of 2,211,054.

The SMMT says 2007 sales look set to surpass 2.4 million registrations, which is better than originally predicted but a long way from 2004 levels and the record annual registration total of 2.579 million, set in 2003.

SMMT chief executive Christopher Macgowan said: ‘2007 has seen the new car market recover slightly, but we are still a long way from the records set in 2003. It is really encouraging to see the growth in diesel registrations, and this is expected to exceed 40% of the total market by the end of 2007. New diesel engines are around 20% more fuel-efficient than a petrol equivalent - good news for the motorist at times of rising fuel costs, and it
also means a similar saving on CO2 emissions - good news for the environment too.’

However, while the SMMT predicts 2007 new car sales will be the best since 2004, the organisation says that concerns remain as to how the market will fare in 2008.

Last month fleet sales totalled 84,782, up 2.6% on November last year to leave year-to-date sales up 3.1% at 1,117,362. Private sector registrations in November rose 2.5% to 65,970 to take sector sales to 994,837 for 2007 (up 1.3%); and business sector sales last month dipped 4.1% to 7,983, although year-to-date sales are up 153,848.

December typically accounts for less than 6% of annual volumes. The market last year was 133,810 units but since 1999 has averaged closer to 140,000 units.

Nevertheless, the SMMT is predicting that all sales type categories look set to show growth in 2007, but warned: ‘Concerns remain about the sustainability of sales growth in the light of the global credit crunch and cost pressures on consumers and business alike.’

The Ford Focus returned to the top of the best sellers list in November, a position it also holds over the year-to-date. Sales of the Focus totalled 7,445 last month to put the model ahead of the Vauxhall Astra (6,428), while year-to-date Focus sales total 119,122 to put it ahead of the Astra’s 106,405.

In publishing the last test sales figures, the SMMT said Audi (up 13.4%), BMW (up 35.9%), Mini (up 102%) and Nissan (34.5%) recorded ‘impressive’ gains in November. Over the year-to-date Audi (up 17.2%), BMW (up 9.2%), Mini (up 27.8%) and Vauxhall (up 9.1%) have seen the strongest growth - a reflection, said the SMMT, of the popularity of new products.

Sue Robinson, director of the RMI National Franchised Dealers Association, said the November rise in new car sales showed that there was ‘still life’ in the market. But, she warned: ‘With consumer confidence fragile, the Bank of England’s decision to cut interest rates [to 5.5% from 5.75%] was the right call.

‘Car sales have continued to show growth as we move towards the end of the year, but the slowdown in the housing market, which is already affecting other retail sectors, could soon impact on new car sales.’

But, following the interest rate cut Robinson believes that consumer confidence could be ‘slightly buoyed’. She said: ‘The softening of the housing market has led to consumers reigning in their spending, and what is left is short-term and focused on Christmas. The high-street slowdown hasn’t yet reached the showroom, but with disposable incomes constricting, it is only a matter of time before new car sales are caught up in the general slowdown.

‘The cut could help the consumer market remain fluid. In 2008 interest rates may need to be reviewed again, as consumers could also be reviewing their spending habits. A dramatic fall in consumer spending could have a detrimental effect on the overall economy, and this must be avoided.’ (SMMT/RMI: December 6).

As has been widely reported over the past couple of weeks manufacturer delivery lead times are increasing sharply for both cars and vans. From the car side this is seen as an effect of the car makers building more to order rather than stockpiling. Some manufacturers are also diverting supply to the US where demand is good and margins are currently higher.

BOSSES at Renault UK have been delighted by public reaction to the environmentally friendly model in the all-new Laguna line-up.The car, badged the Eco2, is powered by the 1.5 litre dCi 110 diesel engine. Riding on 16-inch alloys, in Expression trim and with a manual transmission, it offers carbon dioxide emissions of 133 g/km and combined fuel economy of 56.5 mpg.