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One of the most common questions I get asked is how to finance your leased car. You have a number of choices if you run your own business, less of a choice if you are employed and only have one option provided by the company – finance the vehicle yourself then recharge the company for your business mileage.

But for many of my clients it can be a dilema which the HMRC is about to complicate further if their proposed changes go ahead. We knew that they were looking into Salary Sacrifice schemes which can get very complicated because it allows employees to pay for their car out of gross income rather than what the rest of us do and pay out of income after tax and NI has been paid.

I wasn’t surprised when it was announced that the HMRC were looking into this as they not only miss out on employee tax and NI payments but also employer NI. However, because of the very complex recording and reporting of car usage it has only been viable for providers of salary sacrifice to make available to companies of over 100 employees. And with only 80 – 100,000 cars on such schemes it has not grabbed the attention of the guys in HMRC.

However, it now seems that the net is widening and the tax man is now looking at the way company owners, directors and employees finance their cars in an effort to raise more money. They have taken the view that the provision of a car allowance should be lumped into the investigation.

With the proposals potentially being included in the Autumn Statement 2016 we could see the new rules effective from April 2017 this is worrying for those receiving car allowances, especially if they have opted for an Ultra Low Emissions Vehicle (ULEV). If they had opted for a company car they could end up paying less tax than taking a car allowance. Very complicated but worth discussing with your accountant before making the decision. Once they have completed the consultation and finalised the rules I will let you know. By Graham Hill

The reason to install a dash cam in your car was originally to avoid arguments over insurance claims following cash for crash claims. These claims come about following an incident whereby a driver swerves in front of you, brakes hard, giving you virtually no time to stop causing you to run into the back of their car.

The driver and the passengers of the car in front all claim for whiplash injuries whilst you lose all your no claims bonus. With dash cam evidence the police can carry out an investigation and often prosecute the driver of the car in front on a variety of charges.

However, whilst dash cams are one of the biggest selling gadgets right now and Citroen have started fitting them as standard in their latest C3 to combat cash for crash crime, there are other reasons why you should install dash cams. They are invaluable for general claims as insurance companies become increasingly lazy.

In a recent case I read about a young driver who was sitting stationery in a backed up queue on a roundabout, when another impatient driver decided to take a quick route then cut in modifying the front end of her car. She was clearly not at fault so she claimed through her insurer for the repairs only to find that the other driver had made a claim against her insurance company, not only for repairs but also, guess what? Yep, whiplash.

The advice from her insurance company was to accept liability as in court a judge would be unlikely to find in favour of a newly qualified driver having an accident on a roundabout. That is a disgrace. However, had the young driver, whose premium was already ridiculously high and set to go higher, had a dash cam fitted the case would have been open and shut.

So isn’t it about time that manufacturers followed Citroen’s lead and started to install cameras as standard into the back of the rear view mirrors to help drivers to keep on the road and minimise claims times and costs as well as help police investigating accidents? After market dash cams are unsightly with wires dangling which puts drivers off installing them but maybe if the insurance industry and car manufacturers got their heads together we could see an end to cash for crash, quicker claims turnarounds, a decrease in insurance premiums, less time spent by police investigating accidents and more prosecutions. GH climbs down off soapbox for a sit down and cup of tea! By Graham Hill

I’ve warned in the past about selling your car that has hands free Bluetooth fitted and the need to delete your stored telephone numbers, especially if you have stored sensitive numbers that you wouldn’t want others to know. Well the situation is getting worse now that ‘connected’ cars are now being sold on or part exchanged.

Some cars built over the last couple of years are capable of connection to mobile devices via apps which is great for the owner of the new car but it can lead to all sorts of problems when these connected cars are bought by used car buyers down the line.

Tim Church from Weston-Super-Mare found this out when he sold his Land Rover Discovery Sport only to find that sometime later he was still able to access the car’s InControl App via the app on his phone. From his app he could still see the location of the new owner as well as whether the car was locked or not.

The latest connected facilities can include pre-warming or cooling the car from your app, remotely unlocking the car, downloading music as well as knowing where the car has been and is currently located. When questioned by Auto Express Land Rover said that it was the responsibility of the previous owner to remove the vehicle from their account when they sell it. I’m sure this will be of great comfort to new owners of Land Rovers! By Graham Hill

Good news for those who have a car that needs some repair work carried out on it and you have it done by a non-franchised (not a main dealer) garage. If the work isn’t carried out satisfactorily the normal course of action is to have a row with the garage and threaten legal action if he refuses to refund your money.

In future motorists will be protected from disputes with independent garages over unsatisfactory work as a result of a new £1,000 industry guarantee introduced by The Independent Garage Association (IGA). They pledge to cover bills of up to £1,000 from non-franchised garages who have signed up to their Trust My Garage scheme.

The scheme is due to come into force later in 2016 if work is found to be sub-standard and the garage refuses to pay back the money. As part of the terms of membership of any trade association the association has to provide an Alternative Dispute Resolution (ADR) service, which IGA do, using the National Conciliation Service.

If the ADR finds in favour of the motorist the garage is obliged to pay whatever is awarded. However, if they still don’t pay, the IGA will pay up to a maximum of £1,000 per claim. There are currently around 2,700 member garages and growing according to IGA. You can find your nearest IGA garage by visiting www.trustmygarage.co.uk By Graham Hill

One of my customers, Zamir Hussain, has rather bizarrely found himself in court following an accident that wasn’t his fault. He was provided with a like for like replacement car (not cheap considering he has a Range Rover) but after the other driver’s insurance company disagreed with the amount claimed for the hire car he now has to go to court.

He could end up having to pay all or part of the bill which is several thousands of pounds and serves as a stark warning to anyone involved in an accident. The situation requires a little unravelling so please bear with me. You’ve had an accident that wasn’t your fault and your car is booked in for repair. There is no dispute that the other party is at fault.

You now have one of two choices, you can claim through your insurance company which means that you lose your no claims discount or you can make the claim yourself against the other party. However, and this is the first point to note, you must advise your insurance company that you have been involved in an accident. Failure to do so could cause your insurer to refuse to insure you in future. You should send a letter to your insurance company making it perfectly clear that you are not making a claim, simply advising them.

So you have advised your insurance company and you are now faced with another choice. The bodyshop repairing your car may offer you a courtesy car. This is exactly what it is, a courtesy provided by the repairer, which tends to be a small engine’d modest car to keep you mobile. On the other hand your insurer may suggest that you take a like for like car and recommend a credit hire company who will provide you with a car, either the same as the one you drive or a similar grade. By taking this route you don’t lose your no-claims bonus but the car rental is in your name.

The agreement between you and the credit hire company includes payment terms. They will seek to recover the cost from the other party’s insurance company but, and this is a big but, if the other insurance company refuses to accept liability for the accident or for any other reason refuses to pay, you are liable as the agreement is in your name.  Whilst you may feel you have a right to expect a like for like replacement there is an overriding obligation on you to mitigate the costs to the other party (and his insurer) in the event of an accident.

For example if you have an accident that wasn’t your fault and you feel your car is driveable, then instead of having the car checked by an engineer you continue to drive it, you could cause additional damage. If subsequently it is found that you have caused irreparable damage to the engine the other person’s insurance company would most certainly challenge a claim for a replacement engine – and probably win.

It seems that some insurance companies are challenging hire costs, not because they are too high for the car but that a direct replacement shouldn’t have been provided in the first place using the mitigation of cost argument for the challenge. They will also challenge a rental charge for a replacement car if you keep the hire car after your car has been repaired. You may stand a better chance of your claim succeeding if you lease your car. You should point out that you are still paying for the lease of your car whilst it is being repaired so you should be entitled to claim for a like for like replacement.

Some Credit Hire companies also provide a total risk agreement whereby, unless you have deliberately tried to defraud them, they will cover the cost in the event that they end up in court and lose the case. You need to check beforehand. It now starts to get a little messy. If you end up in court you may be asked if a courtesy car was offered and why you didn’t accept it. The advice is that you should tell the credit hire company if you are offered a courtesy car (you may be asked in court why it was essential to have a like for like car as opposed to a small courtesy car).

If you are not able to use the hire car during the period that your car is being repaired, for example if you are on holiday or you are unable to drive through injury or illness then the claim for that period could be thrown out. Here is another strange twist. Credit hire is known to be the most expensive way to finance a rental car. If you walked into a daily rental company and rented the same car it could cost up to £200 less per day but to do this you would be expected to pay in advance for the rental.

So as the accident wasn’t your fault why would you take this route, surely it must be down to the other party’s insurance company to pay the rental costs direct? Wrong. If it can be shown in court that that you had the resources to pay for the replacement car at the lower rate the court could find in favour of the insurance company for the difference. And it gets worse, supposing the car was a write off. How long would you be entitled to a Credit Hire car for? Most would assume from the time you had the accident to the time you receive the payout.

Some might argue, but not be successfully, that you need the hire car to drive around to inspect potential replacement cars. However, again, rather bizarrely, if it can be shown that you could have afforded to pay for a replacement you may not be entitled to claim for more than say a ‘reasonable’ 2 weeks. The expression used by the courts is ‘impecunious’ when you don’t have the funds to pay for a replacement in the case of a write off or pay for cheaper daily rental if your car is being repaired. So beware if you have a few quid in the bank.

Finally, there is the ‘upsell’. Only ever consider an upsell if the Credit Hire company doesn’t have a direct replacement and won’t charge a higher rate for the better car. Let’s say your car is a 3 Series BMW but because the Credit Hire company has no 3 Series available they suggest they provide a 5 Series. Check that they will still charge the 3 Series rate and don’t fall for the supplier saying that you don’t have to worry if the rate is higher as the other party’s insurance company will be paying.

They probably won’t. In summary only take a Credit Hire car if you are absolutely confident that it won’t result in you paying all or part of the bill. For your information you can check Nationwide Credit Hire Rates by clicking here. Incidentally to put this into perspective Zamir’s Credit Hire charge was over £6,000!!! By Graham Hill

All discussions about cars at the moment seem to revolve around either connected cars, driverless cars or both. But as I mentioned in an earlier blog I hope that in the rush to get this new technology out into the market place they don’t compromise security.

Problems already exist with hackers able to clone your remote keycode and access your car with a laptop, made even easier with keyless entry allowing the crooks to start the car once inside by pushing a button. Dealers are also being warned about open access to the Internet via their free WiFi in their showrooms.

Customers who access the Internet, whilst waiting for their car to be serviced, could have their data held on their laptop compromised by a hacker sitting inside or just outside the showroom. Not only that hackers have been known to set up dummy hotspots that you connect to again giving access to the contents of your computer.

However, worst of all are the hackers who hack into the records of the dealership providing free Internet access. They can then extract personal details including credit card information from the dealers data base. This can also apply to anywhere else you can pick up free and unprotected WiFi such as shops, hotels, restaurants etc.

Moving on to the driverless cars, there have been industry warnings that insurance for driverless cars needs to be very carefully considered with so much depending upon computerised systems making hacking potentially the biggest threat. In a report by AXA Insurance they warn about potential claims where vehicles have been broken into and the car or items stolen remotely.

Researchers have already shown how a Mitsubishi Outlander PHEV could be hacked and stolen using a laptop. I have read of cases in America and similar warnings have been issued here about situations where cars’ computer systems have been hacked then drivers held to ‘ransom’ only releasing the car once a sum of money has been paid. According to AXA these and others are whole new risks associated with highly computerised and autonomous cars that need to be considered and assessed as a matter of urgency. By Graham Hill

A few years back a very good friend of mine asked me to help him with his night club which was still making money but over a period of 2 years had dropped away in popularity and income had suffered as a result. So with my vast knowledge of night clubs and my business expertise I started to investigate the reasons why it was less popular.

A few years previous they consistently had queues of over 100 people outside, waiting to get into the club, but at the time of my investigation it was rare to see a queue at all. We addressed many of the problems, changed the DJ, improved the sound system, re-organised the bar and increased the staff and other things that started to get the club buzzing again but one thing caused a serious fallout between us. Air conditioning.

He, like many bar and club owners, felt that if you kept the customers hot they would drink more and increase bar takings so he preferred to retain the ceiling fans planted around the place. How wrong can you be? The club was open till 2.30am but by 11.30pm punters started to leave and when asked why they were leaving they said it was simply too hot and uncomfortable.

Sadly, about 2 years later, the place closed. Brought about, in my opinion, by the fact that he refused to install air conditioning because of his assumption that when people get hot in a club they drink more. So what has this ramble got to do with cars? Well it’s to do with wheels. Let me explain. We now have a huge raft of options available on new cars, all aimed at making more money out of the customer.

One of the options frequently taken up by customers is wheels. Different styles and sizes can be added at an additional cost but very few clients actually see the chosen wheels on the car before it is delivered or drive it with the bigger wheels fitted. What may have looked pleasing to the eye online may make your new 4WD look like it is perched on stilts in real life.

And as many have found in the past, having larger chunkier wheels fitted to your new car may look tough but they can often make the ride much more uncomfortable, make handling harder and affect adversely the CO2 emissions and fuel consumption. So whilst the assumptions are generally the opposite, better road holding, more comfortable ride etc. you will not know unless you can test drive the car fitted with the upgraded wheels.

And make sure you see the wheels actually fitted on the car in real life, they may look great on line but in the cold light of day they could also look terrible. Just because you are paying more doesn’t mean the car will look or drive better and as with the air conditioning, base your decision on fact, not perception. By Graham Hill

Years ago Ford had a reputation for announcing new models long before they were in a position to launch. As a result pressure was on them to get the car into the marketplace whilst interest was at its highest. Subsequently, anyone who bought the brand new model with lots of new features became Ford’s own testers.

My ex wife became one of them when they brought out a brand new shape Fiesta. It looked great and the Ghia had loads of brand new features. Unfortunately the car spent more time in the local dealers during its first 6 months than in the hands of my ex.

But as newer cars rolled off the production line all of the faults were fixed and eventually my ex ended up with a car without rattles, windows that worked, no oil leaks and a rear window that didn’t drip water onto her shopping every time she operated the rear wash/wipe. Whilst it was irritating there were no health and safety or security issues just minor irritation that got sorted. Scoot forward a few years and you find Apple uses the same principle whenever they have a new iPhone to launch.

Remember the bendy big phone and the phone with the aerial built around the phone that lost the signal if you held it? So it should come as no surprise that when the recent head of steam started to build up around the desirability to have ‘Connected Cars’ that stuff would be released before being fully considered and fully tested. What us cost accountants would refer to as the ‘what if’ considerations. Many manufacturers have rushed to release apps that can be downloaded onto your phone that will remotely connect to your car.

The app will remotely monitor and control the car, locate it and even lock and unlock it. Yes I did just say that. The trouble is that not enough ‘what if’s’ were considered before the products launched leaving the new owner and the car vulnerable when sold. Fleet operator Ogilvie found that they still had access via their apps to a Tesla, BMW i3 and a Nissan Leaf after the cars had been sold although they pointed out that the Nissan could not be stopped or started via the app.

As more manufacturers join Jaguar Land Rover with their inControl, Tesla with MyTesla, Volvo OnCall, Vauxhall’s OnStar and Nissan Connect less attention could be given to security if it meant that the technology could be launched in no time flat. Some manufactures say they will delete the old account once the car is sold and one amazingly said that if they are called by the customer or fleet manager they can disable the App. Really? That sounds pretty secure – not! Tesla said that it is up to the old owner or new owner (or thief) to advise the change of ownership.

To prove the point Fleet News reported one ex Tesla owner able to access his MyTesla account a year after the car was sold. It is only now that leasing companies are discussing the end of lease procedures and a resolution that would see the disabling of apps. As part of the handover process. But what about private owners? Who will instruct those with Connected cars how to protect their privacy and new owners make sure that the previous owner no longer has access to their car. What a mess! By Graham Hill

We all know about ‘Road Rage’, but have you heard of Parking Rage? Apparently, according to a study by Privilege Car Insurance it is sweeping across the country with more than 3 million motorists admitting to spying on neighbours to make sure they don’t park in the wrong place.

The survey revealed that 75% of motorists said poor parking left them outraged. Men aged 21 were the most susceptible who admitted to being outraged an average of 139 days a year. Newcastle is where most parking rage existed followed by Norwich.

It would seem that two thirds of motorists believed that it is a basic right to be able to park in front of  your home, regardless of driveways, garages or allocated parking. They admit to ‘curtain twitching’ if they feel the space outside their home is in jeopardy. Remedies include the usual beeping of horns and unsavoury hand gestures, as with road rage.

But parking rage can also lead to an angry note left on the windscreen of the miscreant (admitted by 14%) and direct arguments (12%). A small number even admit to deflating tyres and scratching the paintwork. So when you are parking in a residential road, keep an eye out for twitching curtains, you may return to a deflated or scratched car. By Graham Hill

Now here’s a funny story that I came across in Business Car. Apparently Essex police are urging drivers not to stop if they are requested to do so by ‘anything other than a marked police car’ following two van thefts earlier this month. In both cases a van was pulled over by disguised police men in an unmarked silver Mondeo equipped with blue flashing lights.

They requested a VW Transporter and Mercedes Sprinter to pull over on the M11 and the M25. The two men in the Mondeo wore fake uniforms with one of them reported to be also carrying a gun. In each case the drivers of the vans were left at the side of the road unharmed.

According to Essex police they have instructed officers to avoid stopping motorists whilst in an unmarked car except in an emergency. DCI Stuart Smith from the Kent & Essex Serious Crime Directorate said, ‘Anyone who is signalled to stop by an officer in an unmarked car should not stop but phone 999 immediately to verify whether the vehicle and its occupants are genuine’.

Can you imagine explaining this to a genuine police officer at the side of the M25 when they finally pull you over for speeding then add into the charges ‘using a mobile phone whilst driving’? All a bit worrying! By Graham Hill