Going Electric

‘While we are still at “base camp” so to speak with going electric the climb is most definitely  on . China leading the way in terms of numbers managing to sell over 1420000 electric vehicles in the first quarter that is a massive 154% increase on the previous year but still only equates to 2% of their total market.

Norway is the star in terms of share of market with an impressive 48% of all new car sales in the first quarter being run on their hydropower, both the China and Norway examples demonstrate where there is a will , it will result in market increases.

Looking into the future there is hope by 2025 there will be a 25% share of the market , with increases year on year going forward.

What happens if the UK leaves the EU without a deal?

Protections for expatriates agreed as part of withdrawal negotiations could be torn up in the event of no deal.

Photo: PA
With the EU and UK issuing guidance on preparations for a no-deal Brexit, here are some pointers on what leaving the EU without a Withdrawal Agreement on March 29, 2019 might mean.
• There would be no 21-month transition period to December 2020, so businesses and public bodies would have to respond immediately to changes in the rules governing their operations.
• Protections for expatriates agreed as part of withdrawal negotiations could be torn up, creating uncertainty over the legal rights to live and work of 1.3 million Britons in EU states and 3.7 million Europeans in the UK.
• Relevant EU laws would be transferred onto the UK statute book under the terms of the EU Withdrawal Act, so there would be no black holes in Britain’s lawbook.
• The most immediately visible impact would probably be at borders and ports, with fears of long queues if either side decides to impose heightened passport or customs checks. The UK would be free to set its own controls on immigration by EU nationals.

There are fears of queues at ports like Dover if Britain leaves the EU without a deal.

Credit: PA
• Delays to cross-Channel freight due to new customs, sanitary and phytosanitary checks could hit supplies of food and other goods. Britain could opt to waive checks to help keep traffic moving, but this may not be matched by the EU.
• Without a trade deal for goods, the UK would have to fall back on World Trade Organisation rules, which require tariffs on products ranging from 4% on liquefied natural gas to 9.8% on cars and 32% on wine. Britain would trade with the EU under the WTO’s “most favoured nation” status, preventing either side from imposing punitive tariffs, but the move away from frictionless zero-tariff trade is certain to drive up prices in the shops.
• Britain would be free to sign new free trade deals with countries around the world, and negotiations would get under way in earnest with states like the US and Australia. But these talks could last years, and in the meantime, the UK would lose access to free trade deals the EU has struck with dozens of countries, including Japan, Canada and South Korea.
• Opponents of a no-deal Brexit warn that major manufacturers in sectors like automotive, aerospace and pharmaceuticals would shift operations from the UK into the remaining 27 EU states in order to avoid delays and disruption to products and components crossing the border.
• Financial institutions in the City of London and other centres around the UK would lose their “passporting” rights to operate in EU countries, and could activate contingency plans to move some or all of their operations overseas.

Britain would halt annual payments of around £13 billion to the EU after a no-deal Brexit.

Credit: PA
• The UK’s annual contributions of around £13 billion to EU budgets would cease, providing an instant windfall to the Government. But there would be pressure on ministers to make up the loss of Common Agricultural Policy subsidies totalling £3 billion to farmers, as well as EU support for science and disadvantaged regions.
• New arrangements would have to be made to certify UK aviation for safety in order to ensure that planes are not grounded.
• Britain’s agreement to pay a “divorce bill” of up to £39 billion would be void, and a House of Lords report has suggested that the money would no longer be payable. But some legal experts believe the EU could take the UK to the International Court of Justice to recoup the cash, which represents payments to which Britain committed itself while a member.
• Britain would no longer be bound by the rulings of the European Court of Justice in Luxembourg. But it would continue to be subject to the European Court of Human Rights in Strasbourg, which is not an EU body.
• Professionals may find that qualifications obtained in the UK are no longer recognised in EU states, and may have to obtain new authorisations in order to continue to practise.
• Individuals and businesses could lose the right to apply for EU grants or tender for work with EU institutions.
• The status of the 300-mile Northern Irish border with the Republic would be unresolved. Both Britain and Dublin have said they will not put physical infrastructure on the border. But the Republic would come under intense pressure from Brussels to exert customs and immigration controls on what would become a new external frontier for the EU.

Credit: ITV News

Car Leasing vs Buying, which is better?

Car leasing is becoming increasingly popular in the UK.

Let’s look at the reasons why, and how it works.

Leaseline has some great lease and purchase offers

Car leasing used to be relatively unheard of in the UK, despite its huge popularity in the US, where one in four cars are owned through personal leasing. However, it is becoming increasingly popular, as the ‘direct debit generation’ have become used to paying for things such as mobile phones, gym memberships and insurance on a month-by-month basis. With new car sales rocketing this year, and the buyer’s change cycle becoming much shorter, lots of people are considering leasing as a good way to get and stay in a new car for less. But is car leasing really the best way to finance your vehicle?

Car leasing explained

Car leasing, also known as Personal Contract Hire, is essentially where you rent a car for a few years at a fixed price, and hand it back to the lease company at the end.

Personal Contract Hire (PCH) provides you with hassle-free motoring without the depreciation risks associated with traditional ownership. PCH is an alternative to PCP or HP, which incorporate the depreciation of the car, or the cost of the car in total. This is because with PCP or HP, you will own the car at the end of the term of payments, whereas with PCH, you simply hand the car back.

Personal Contract Hire benefits are:

  • That it allows you to hire new vehicles
  • It includes a full-term Vehicle Road Tax
  • It offers the option to include a full maintenance package, providing worry-free motoring
  • It’s hassle-free, as you don’t need to worry about selling the car at the end
  • It’s flexible as you can change your car easily, and always keep up with the latest models

Which is better, buying or leasing?

People are divided on this one. And it’s entirely up to your personal circumstances and preference, although mostly it’s preference. For those of you who like to drive a new car and keep up with the latest models, leasing is probably more appealing to you, as you can change your car more frequently, and monthly payments are affordable. However, if you like your car to feel like ‘yours’, and are happy to keep it for a longer period between changes, buying is probably the best option for you.

Let’s take a look at the pros and cons of each option, side by side.

Buying Leasing
Pros Pros
Insurance costs will decrease over time Down payment is low or non-existent
Builds up equity Monthly payments are lower than loan payments
Can use trade-in amount to buy a new car Easier to obtain than a loan even with bad credit rating
Ownership means monthly payments will eventually stop after the cost of the car has been paid Most warranties last 3 years (the typical length of a lease agreement)
Don’t need to worry about mileage limits Maintenance costs are low
Free to modify/accessorise as you wish No depreciation concerns
Can be claimed as tax deduction if you own a business
Cons Cons
Maintenance costs will increase over time and can include costly repair bills Insurance rates higher to cover gap insurance
Car depreciates in value quickly If your leased car includes a larger first rental, you will pay that expense every time you get a new lease
Monthly payments are initially higher than leasing
Down payment can be large Costs of depreciation are often factored into your monthly payments, rather than remaining with the dealer
If buying a used car from a non-reputable dealer or buying privately, there can be uncertainty about a car’s history Extra fees for damage if returned with damage.
You will always have monthly repayments
Over Mileage can also lead to added costs

The pros and cons list looks fairly equal, as there are benefits and drawbacks to both options. From a purely financial point of view however, How Stuff Works conducted an interesting study into the comparison of buying versus leasing a car. They found that over a short-term period of three years (the typical length of a lease), leasing was overall the cheapest option. However, spread over ten years, buying was significantly cheaper, as you reap the benefits of ownership over a more prolonged length of time, but service and maintenance cost could be considerably more.

Credit score requirements

If you have a good credit score, you have more bargaining power. You should be able to get a better rate if you have demonstrated your ability to use your money wisely. Before you start shopping around for lease deals, check your credit, and make sure you fix any mistakes first.

If you have a bad credit score, the good news is that leasers are more likely to approve you than finance providers. This means that leasing might be your best option to get a car without paying upfront to buy. In fact, lease approval rates are often at 70% and higher, so your chances are much high of getting accepted.

Beware of hidden and back-end costs

Lots of people get caught out when they go to return their vehicle in at the end of the lease agreement, only to find that they need to pay upfront for any damage or wear and tear. While this may sound obvious, many people forget, or aren’t aware of it, and don’t budget enough to cover these costs at the end of the contract.

Another cost that can catch people out is mileage costs. Many lease deals have a maximum mileage limit, which, when exceeded can bring hefty charges with it. Expect anything from 3–13p per mile.

Leaseline includes VAT in lease prices, but many leasers don’t, so watch out for that when you are considering your monthly payments.

To buy or not to buy, that is the question

As outlined here, there’s no clear-cut rule as to which option is best, as there are benefits and drawbacks to both leasing and buying. Most of the choice is down to your personal preference.

However, generally speaking, if a car has a high depreciation value, then you’d be better off leasing, whereas if a car has a low depreciation value, you’d be better buying and reaping the benefits later when you come to sell it.