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Years ago when I was working in industry I was a Cost and Management Accountant. We manufactured, installed and leased fire alarm and hotel communications equipment. We developed a new fire alarm system to meet the new fire alarm laws that were being introduced into small public buildings, scout huts, church halls, meeting rooms etc.

Our designers came up with a swish control panel which was latest technology with transistors and other miniature gubbins. It made the unit much smaller and also cheaper to make. Before going into production our chairman, himself an engineer, wanted to see this newly designed product line. He collected me en-route to the design department and I went through the costings – he was impressed.

However, when he saw the miniature size of the unit I saw his face drop. He asked the sales director how much we were leasing the unit for and how much we were selling it for cash? After hearing what we were selling the unit for he turned to the head designer and said ‘Double the size of the box’. The designer said, ‘But sir we don’t need to put it into a bigger box’. The chairman’s answer was, ‘You do if we’re going to sell it for £500’. The box size was doubled and the inner workings remained the same.

So what has this lesson in perception have to do with cars? Well, it seems that in these times of miniaturisation the most popular cars are the big and bulky SUV’s. Just about every manufacturer has some sort of 2WD or 4WD SUV in their range with the likes of Audi, Mercedes and BMW having up to five, six or even seven in their line up.

Motoring experts describe them as boxy, raised hatchbacks with high running costs and compromised road handling. Totally impractical, unable to fit into most garages or parking spaces. But the manufacturer’s love them because, without a doubt, they are the most profitable cars in their ranges. Big is best as they charge disproportionate amounts for these cars compared with their smaller saloon car equivalents.

According to Audi’s product marketing chief, Jens Meier, the SUV proliferation has helped to benefit the wider car manufacturing industry. As he explained to Auto Express, the increased profit generated from SUV sales is helping to finance development work in the sports car division, cars such as the TT, RS5 and R8. He sees their advancement in sports car design as a bi-product of SUV success.

Very often the SUV’s share the same platform with saloon cars in the range along with engines and other mechanicals but the big skin adds substantially to the perceived costs by customers who pay more for the jacked up versions whilst the manufacturers wring their hands with joy. My old boss had it right all the time! By Graham Hill

Traffic on UK roads is at an all-time high according to the latest statistics from the Department for Transport (DfT). Car traffic reached 254.4 billion miles in 2017 with overall traffic up by 1.3% on the previous year to 327.1 billion miles.

Van traffic increased to its highest level also, up 2.7% to 50.5 billion miles. Cycle traffic showed the biggest increase in percentage terms, up 3.1% to 3.3 billion miles. Bus and coach traffic dropped by 3.4% from 2.5 billion to 2.4 billion miles.

Finally, motorcycle traffic remained pretty much the same. So what does this tell us? Best to ask a few experts, some of whom apparently hold the view that traffic patterns will be changing as people change from car ownership to car usage. I agree with the switch away from car ownership but rather than a mix and match between using a car, train, bus, plane, autonomous vehicle, cycle, walking etc I see the move from owned cars to leased or rented cars with the exclusive use of the driver.

I can’t envisage a time when the vast majority of the population would be happy to plan every trip rather than walk out in their onesy and slippers, jump into their car, drive to Tesco Express and buy an emergency pint of milk, loaf of bread and bar of chocolate rather than wait for a bus either way or order an Uber.

Having said that, I have friends in London who have never owned a car so what do I know. Better turn to those in the know. According to the SMMT new vehicle sales dropped to 2.5 million in 2017 down for the first time in 6 years. They are predicting a further drop this year of 5.1% to 2.4 million new vehicles.

Christoph Domke of KPMG predicted that if this trend continues we will also see a decline in manufacturers. We have 27 at the moment but he suggests that within 10 years this could decline to just 10. An interesting statistic was the rise in access to a car in each household. In 1951 it was as low as 15% but in 2016 that had jumped to 77%.

However, dig a little deeper and it can be seen that families in the lowest income level fare much worse with just 44% of households having access to a car. This has led to confusion. Lowest income families may actually be leading the way to Mobility as a Service (MaaS) the latest buzz expression. Behind the expression is the mix and match of cars, trains, taxis, car shares, autonomous cars etc.

But lower-income families use public transport more because of necessity rather than a planned structured approach to mobility. So will we ever see the day when the majority, if not all, vehicles on the road are driverless and driven by electricity? Motorbikes create a challenge I think, not only to become driverless but also to be spotted and avoided by driverless cars. I mean some motorbikes are capable of 180 miles per hour – that is bloody fast.

On the other hand specialist company MaaS Global launched its app called ‘Whim’ in the West Midlands in April 2018. It offers multi-modal transport alternatives to car ownership. Within the first month there were 3,000 downloads of the app which combines access and payment for various types of transport including public transport, car hire and taxis.

The general consensus was that this could work well in larger towns and cities but it wouldn’t be so attractive in rural areas where public and even private transport links are nowhere near good enough for such a scheme to work. Time will tell! By Graham Hill

For most people WLTP probably doesn’t mean a lot but for anyone in the motor industry it’s been an absolute pain over the last 12 months. It stands for the Worldwide harmonised Light vehicle Test Procedure. It’s an attempt to get all vehicles properly tested, following the VW emissions debacle, making it more difficult to fiddle the results.

New model cars for this year had to be approved using the new testing criteria. The tests were still carried out in the rolling road laboratories but instead of self-testing examiners were in attendance to oversee the testing and the tests were more involved and took much longer.

A few failed but when the new models were designed they took the changes into account so most successfully got the approval they were looking for at the first time of testing, keeping them in the same emissions brackets. However, the next phase was to test existing models which caused major challenges as they were found to be way out.

An even bigger challenge was not so much carrying out modifications on the production lines in order to make new cars (but old models) compliant and back to their previous readings, it was the time it was taking to wait for a re-test. The authorities hadn’t allowed for the massive increase in test facility requirements for not only cars that had previously been tested but the re-test requirements.

Cars that were tested under the old regime must be sold by the end of August so we’ve seen some extra discounts but we’ve also seen orders and production lines shut down whilst manufacturers have carried out modifications to their engines and exhaust systems in order to make their latest production compliant.

In an effort to reduce the burden the DfT has allowed 10% of the manufacturer sales or 2,000 vehicles that haven’t made it through the new emissions tests to be registered after 1st September,

However, this takes us to the next challenge. The Real Driving Emissions Tests (RDE). This compliments the WLTP tests and takes us a little further towards accurate emissions tests. The RDE tests require that standard cars be fitted with test equipment for testing on real roads in real conditions.

They check amongst other things low and high altitudes, year-round temperatures, additional vehicle payloads, up and downhill driving, urban, rural and motorway road driving. So it looks like we’ll be in for even more disruption as we move to the next ridiculous level.

The fact is that everyone drives differently which provides widely differing emissions and performance results. And that’s all before we Brexit. More pain for the industry and customers. By Graham Hill

I’ve been in this industry for over 30 years and it worries me greatly the levels of incompetence displayed by those at the sharp end. I don’t blame the sales staff, it often stems from the top. Directors and senior management struggle with basic product knowledge that spreads like a cancer throughout the organisation.

Whether it’s an independent dealership, dealer group, bank owned finance company, manufacturer-owned finance company or independent their basic knowledge is abysmal. Unfortunately, this attitude spreads throughout the organisation which means that customers are incredibly poorly informed and likely to make wrong financing decisions or the right decision but unaware of all the implications and the potential true costs.

I broke the story over 2 years ago that the PPI claims industry was eying up the car finance industry and the new regulations that were being introduced by the relatively new FCA. They were getting a sniff that all was not well inside the industry and there was potential for mis-selling claims.

If you think of what happened when a PPI claim was successful, people were having all their premiums returned. Could this mean that customers could have all their payments returned and the car given back as a result of being given bad information by an ill-informed or crooked salesman? The first test cases will give us an idea.

In the meantime, I see false reporting in the press and idiots masquerading as experts giving poor advice to consumers. There is little doubt that I am rapidly becoming the most influential person in the UK when it comes to vehicle finance. My appointment as non-executive director of one of the most progressive PR companies in the UK will help this along. Especially as the company chairman is as gung-ho as I am and supports me.

To illustrate my point I’m not going to mention names in order to avoid any unnecessary legal challenges but the Chief Operating Officer of one of this country’s largest dealership groups wrote a pile of nonsense in response to a poorly written piece in the Times. He, first of all, criticised the paper for the warning about potential problems with the claims industry. Defending the indefensible!

He then rants on about the difference between PCP and Personal Contract Hire (PCH) making a big issue about PCP not being a lease. This is fundamental. It is a form of HP agreement and HP agreements are leases – idiot. Any finance other than a loan is a form of lease. If someone else owns the goods whilst you have the use of them – it’s a lease! That’s basic accounting something one would expect someone in his position to know.

With HP or a PCP you only own the goods when you have paid all the money owed plus an option to purchase fee. If you want to read my views of the industry and reveal masses of PCP secrets go to Grahamhilltraining.com and register to download my PCP report. I’m explaining just about everything once and for all. Next on my target list is PCH. By Graham Hill

As most of my customers know you don’t pay your initial rental until after the car has been delivered and you have had the opportunity to inspect it. There is a reason for this and it’s not because my funders are really good eggs and don’t like taking money off you before you receive your car.

I’m sure they would love to but that would mean that by taking money from you before delivery the transaction would fall inside the distance selling rules. That would give you 14 days during which for any reason whatsoever you could return the car and ask for a refund.

That would prove to be very costly so it’s avoided. Of course you can still return the car if it’s faulty or not as ordered but not because you changed your mind. However, many people now buy new and used cars online unseen which means that the transaction falls within the scope of the Distance Selling Rules provided the car was bought from a dealer or trader (not privately).

You have 14 days starting the day after delivery of the car to reject it as long as you haven’t physically seen the car. If the whole transaction is completed online then you just visit the dealer to collect the car it is still a distance sale.

However, some sellers will issue terms and conditions for you to sign or tick online. You must read them as some are now including a term that states that the contract is only concluded when you collect the car, i.e. on the trader’s premises.

This takes the transaction outside the Distance Selling Regulations, so no cooling off period after you’ve driven the car away. If you have bought the car from a private seller online the distance selling rules don’t apply so no cooling off period. By Graham Hill

This week we saw the Government announcing some new initiatives to enable them to get to their 2040 target of no more petrol or diesel cars on our roads. Whilst they are trying to make the right noises in truth I don’t think they give a damn. Or maybe I’ve got it wrong.

A few years ago in an attempt to get us into diesel cars, we saw scrappage schemes that took us out of old chuggers and put us into new or newer cars but incentives to get us into electric cars seem to have missed the mark. Electric cars are so much more expensive than their equivalent petrol or diesel car to manufacture that even with the subsidies applied the cars they are still too expensive.

They are cheap enough to run at the moment if you charge from home but given the fact that most cars aren’t achieving their range and the cost of charging at public and filling station charge points is now incredibly high it costs less per mile in fuel to run a petrol or diesel car than an electric car.

I’m sure that it’s for these reasons that just 7,441 electric cars were registered in the first 6 months of this year which was fewer than the same period in 2017. So it seems that the Government stance has changed to push Ultra Low Emission Vehicles (ULEV). These are ‘vehicles with pure-electric engines, plug-in hybrid engines or cars with CO2 emissions lower than 75g/km at the tailpipe’.

Another interpretation comes from the Society of Motor Manufacturers and Traders’ (SMMT) who say that they ULEV’s are ‘vehicles using low-carbon technologies; emitting less than 74g of CO2 from the tailpipe; capable of operating in zero tailpipe emission mode for a minimum of 10 miles’.

It is all very confusing. To make matters worse the Government has announced that it will now settle for ‘at least 50%’ of new cars being ultra-low emissions by 2030. But as Mike Rutherford of Auto Express points out, surely this leaves the door open for the other 50% to be medium or high emissions vehicles?

As for the 2040 ban on petrol and diesel, that is looking decidedly dodgy as the biggest growth area is in the petrol hybrid cars and with no petrol the hybrids won’t work. So is that target in the toilet?

In their plans the Government has made a promise to ensure that all new homes will have an electric charge point fitted. Hmm, how does that work with flats that have fewer parking spaces than flats in the building? In fact I’m told that some new city flats are built with no parking at all. As Mr Rutherford suggests, possible on-balcony parking or maybe in the hanging baskets – we get the message. Clearly, the Government doesn’t.

Finally, in their disinterested way, they’ve said that all new street lights will have charging points fitted. They clearly haven’t so much as looked outside their windows or driven around their local town or city to notice two things. Firstly that most lighted areas are the most dangerous, on double yellow lines, pedestrian areas, dangerous bends etc.

A glance out of my window shows that all the new energy efficient lamps that were installed a couple of years ago emerge from the pavement on the opposite side to the road. This will mean that when charging a cable will lay across the pavement.

I think the Government should start to get serious or pass over planning for electrification to an organisation like the AA or RAC to get to grips with the problem. By Graham Hill

Highways England has announced that it is falling into line with the EU proposition to digitise the road networks thus setting a single standard of road networks that would stretch from the UK across the rest of Europe. Through sensors and wireless tech the network will be able to communicate and interact with individual cars.

Informing drivers of traffic delays ahead, temperature, road surface conditions and will even be able to inform and direct emergency services to accidents. According to Auto Express here are a few of the things planned:

1. Road sensors installed in studs or railings to convey messages to cars and help steer autonomous vehicles in future.
2. Big Data will help to predict traffic movements, prevent congestion from building up and warn drivers in individual cars to take another route. I thought that could be done already!
3. Potholes could be detected at once as the road would be able to report damage. Currently, patrols go out every few weeks to check for damage.
4. Sensor Tech could make it possible for heavy goods vehicles to ‘Platoon’. This allows lorries to travel in tight formation with fewer drivers saving fuel.
5. Self-repairing roads are something else that Highways England is currently trialling. This would reduce roadworks and costs.
6. Road charging would be possible with connected roads. This has already been suggested as a replacement for the road fund licence.

Sounds quite amazing! By Graham Hill

With so many drivers switching from diesel to petrol, often after many years of driving a diesel car, the AA is reporting an increase in misfuelling callouts. The majority of callouts are from company vehicle drivers, accounting for 59% with consumers accounting for 41%.

Not all were for petrol cars being topped up with diesel, many were the other way round but the majority was a result of changes in company car policy or attitude of consumers towards diesel vehicles. I must say that after many years of topping my car up at the local Tesco filling station and automatically knowing that the diesel pump was the one on the far right.

In their wisdom they decided to change the pumps for new ones with the new pumps having the diesel nozzle on the far left. I didn’t do it myself but it caused many drivers to top up from the wrong pump through not paying attention. The AA offers a fuel assist programme for just this purpose, probably not a bad thing to take, especially if you are moving from one fuel to another.

The AA put down the mistake to drivers being pre-occupied, driving an unfamiliar car or visiting an unfamiliar filling station. So if you are about to change from one fuel to another make sure you don’t misfuel, if you do don’t start your car and lastly don’t even move it as this can cause all sorts of problems. By Graham Hill

I get very worked up over this subject and I’m really pleased that the Driver & Vehicle Standards Agency (DVSA) has now issued warnings to all car manufacturers over Safety Recalls after the disgraceful attitude towards safety displayed by Vauxhall and BMW over recent months.

Before I get to the meat of this piece do you know what a safety recall is? Briefly, if a car is found to have a problem and the manufacturer, through its harvesting of statistics, finds that the fault appears on a lot of cars of the same model manufactured over a specific period of time, they will find a fix then issue a recall to all the current owners of cars that potentially carry the same fault in order to have the fix applied.

Now, this could be something simple like a boot lid having to be slammed to close or the intermittent wipe on a rear windscreen wiper not functioning. These are called technical recalls and not so critical as the potential for a car to catch light in certain circumstances or a gearbox to fail at speed. This type of recall is a safety recall and it is these that the DVSA are tightening up on.

A recall can occur at any time, in the case of the BMW safety recall it applied to cars built between 2007 and 2011 so this isn’t restricted to just new or nearly new cars.

This all follows the highly publicised cases of the Vauxhall Zafira model B’s that caught light and the BMW’s that had an electrical fault caused by a B+ battery connector. Neither Vauxhall nor BMW were prepared to acknowledge the faults until BBC’s Watchdog got involved and exposed the problems.

So to start with shame on Vauxhall and BMW. In the case of BMW Narayan Gurung lost his life when he hit a tree trying to avoid a broken down BMW as a result of this known fault. Following the accident BMW recalled 36,000 vehicles, it was only after the Watchdog show that a further 312,000 vehicles were recalled.

There are two important points to be made here. Firstly the faults very rarely apply to all cars so whilst we see that a total of 348,000 cars are recalled it doesn’t mean that all the cars have the fault. Having said that we don’t know until the cars are inspected whether the car has the fault or not, so even though you haven’t experienced the brake fault or electrical fault that doesn’t mean that you shouldn’t return your car to a main dealer to have it checked.

If you don’t you could be putting yours, your passengers and third party’s lives at risk. The new rules imposed on manufacturers by the DVSA means that once a safety-critical fault is known the manufacturers have just 10 days to issue a recall notice or face prosecution and a fine.

DVSA CEO Gareth Llewellyn has made it clear that when the 10 day warning has been issued it will also be made public, unless the manufacturer can give a good reason why the recall shouldn’t be made. This will put pressure on the manufacturers to take action. The situation gets a little more complicated when a company car driver isn’t made aware of a recall as the notice would be served on the company that owns or leases the cars.

Whoever is responsible for the company vehicles will be held responsible and if a recall isn’t conveyed to the driver and the car inspected he can be fined up to £20,000 and face 3 months in prison. I hope that the DVSA gets tough on manufacturers who seem to take a very casual approach when dealing with life-threatening safety recalls.

It should also be pointed out that if a car has a recall notice on it and the driver doesn’t have it inspected it could invalidate your insurance. Something that few people are aware of.

If you would like to check the MOT history of your car and whether there are any outstanding recalls you can check online by entering your registration number. Go to: https://www.check-mot.service.gov.uk/

Whilst I believe that there have been suggestions along the lines that recall notices should be checked at the time of the car’s MOT test it doesn’t cover cars during the first 3 years of a car’s life. Maybe that should also apply to those servicing your vehicle also, they should check at the same time. By Graham Hill

Finally, after banging the drum for the last two years, Transport Secretary Chris Grayling has agreed with my views that diesel still has a part to play, especially when the Bosche system starts to find its way into new car production. By 2020 when the Bosche system is fully rolled out across all manufacturers the NOx emissions will be a tenth of that required when Euro 7 rules are introduced making diesel cars more environmentally friendly than petrol.

In the meantime,, Nissan hasn’t helped by being caught out doing something similar to VW and falsifying emissions tests in Japan. That aside Chris Grayling supported diesels by saying, ‘If you’re driving long distances and are out and about on the road for work, diesel is a perfectly sensible option.’

The Government is aiming for zero emissions by 2040 but as Grayling pointed out this has to be industry and consumer-led and technology neutral – no I haven’t got a clue either but that’s what he said. But he went on to say, ‘Diesels can still play a valuable role in reducing CO2 emissions during that transition period to a low-emission future.’

However, Grayling told the SMMT that diesel engines need to continue getting cleaner. The response from the SMMT was to question whether his views would translate into positive changes to the tax regime. The Government promised to remove the 3% diesel company car supplement from April 2016.

However, not only was that decision reversed in the wake of the VW emissions scandal it was increased to 4% from April 2018. Of course, if I was being cynical I would say that the UK Government along with Germany and France have allowed false information to circulate in order to penalise drivers of diesel cars.

However, this attempt at crucifying diesel drivers will end up biting them on the rear end because diesel car sales have dropped through the floorboards leaving them with far fewer drivers to rob. Time will tell how this argument pans out but I’m pleased that the Government has come out positively. By Graham Hill