The Best Car Finance Blog In The World

New vehicle supply challenges will persist in the automotive industry throughout 2022, warns analyst KPMG.

Figures released by the SMMT at the end of November 2021 showed UK car production had declined 41.4% in October – the fourth straight month of decline and the weakest October since 1956 as firms grappled with the global shortage of semiconductors which led to production stoppages.

In October, Fleet News reported that fleet operators and company car drivers faced delays of more than one year for certain new car and van models, while others are being delivered with missing features.

Richard Peberdy, UK head of automotive at KPMG, said: “Frustratingly for manufacturers and consumers alike, 2022 will start with the same supply shortages that have limited production throughout 2021.

“Despite investment going into increasing chip production, the backlog of demand for the variety of sectors and goods that require them means that supply challenges will persist in the automotive industry throughout 2022, albeit these will probably ease as the year goes on.

“As component supply issues ease, production will increase to meet pent-up vehicle demand.

“But I’d argue that we are entering a ‘new normal’ for car manufacturing and we won’t again see the levels of over-production and discounting that we did pre-pandemic.

“Instead, manufacturers will focus volume on more profitable vehicles and markets.

“Demand will change too and in light of sustainability concerns and hybrid working, consumers will be rethinking what they drive and how they access and pay for mobility more widely.” By Graham Hill thanks to Fleet News

New vehicle supply challenges will persist in the automotive industry throughout 2022, warns analyst KPMG.

Figures released by the SMMT at the end of November showed UK car production had declined 41.4% in October – the fourth straight month of decline and the weakest October since 1956 as firms grappled with the global shortage of semiconductors which led to production stoppages.

In October, Fleet News reported that fleet operators and company car drivers faced delays of more than one year for certain new car and van models, while others are being delivered with missing features.

Richard Peberdy, UK head of automotive at KPMG, said: “Frustratingly for manufacturers and consumers alike, 2022 will start with the same supply shortages that have limited production throughout 2021.

“Despite investment going into increasing chip production, the backlog of demand for the variety of sectors and goods that require them means that supply challenges will persist in the automotive industry throughout 2022, albeit these will probably ease as the year goes on.

“As component supply issues ease, production will increase to meet pent-up vehicle demand.

“But I’d argue that we are entering a ‘new normal’ for car manufacturing and we won’t again see the levels of over-production and discounting that we did pre-pandemic.

“Instead, manufacturers will focus volume on more profitable vehicles and markets.

“Demand will change too and in light of sustainability concerns and hybrid working, consumers will be rethinking what they drive and how they access and pay for mobility more widely.”  By Graham Hill thanks to Fleet News

Almost 100,000 drivers have nine, 10 or 11 penalty points on their driving licence, according to the latest Government data.

It means that many could reach the 12-point threshold for a driving ban with just one offence.

The latest figure (97,187) is an increase on the 92,000 that were identified as being ‘at risk’ of a ban by IAM Roadsmart, in April.

Licence Bureau is warning companies that failure to regularly check drivers’ licences could potentially result in driver shortfalls, or worse risk drivers on fleets who should not be driving.

The company has carried out more than 830,000 licence checks on behalf of clients over the last 12 months, of which 5,000 checks picked up active drivers within the workforce who should not have been on the road.

These invalid drivers had issues ranging from driving while disqualified, to provisional licence holders, drivers with revoked licences, non-GB licence holders with endorsements, and expired or voluntarily surrendered licences.

 

Andy Wheeler commented “These latest figures make for sobering reading for fleet managers, as even for companies that are actively engaged in trying to manage their driver risk compliance, they show there is a one in 166 chance that an employed driver on the road today should not be driving.

“For companies who are not actively managing their risk, these figures could be significantly higher, with potential consequences not just for compliance but also for a diminished workforce should these drivers be removed from the roads in any large numbers.”  By Graham Hill thanks to Fleet News

Thousands of business drivers suffer from more anxiety, stress, tiredness and mental health issues between November and February than at any other time of the year.

That’s according to analysis of more than 3,000 business drivers using Red Driver Risk Management’s Wellbeing Profiler.

Labelled by Red as ‘Seasonally Affective Driver Disorder’ (SADD), the condition can affect all types of business drivers, whether they are in a company car, delivery van or HGV, claims the risk management firm.

The combination of dark mornings and nights, winter weather and harder driving conditions, plus an increase in stress levels as the festive season approaches, is a factor in the marked spike in mental health issues during this period, it says.

Red Driver Risk Management’s research showed a fifth of drivers (20%) claim to feel tired during the winter months, and for some the issue is worse still, with 12% claiming to be ‘exhausted’. One in 10 say they experience anxiety during the darker days too.

The reporting also looks at employee attitudes and engagement in winter. There was an 8% drop in the number of employees feeling motivated, while the percentage of drivers feeling ‘very discouraged’ doubles and ‘enthusiasm’ wanes by nearly 10%.

Red Driver Training’s CEO, Ian McIntosh, said: “We ask 79 different questions that look at areas such as tiredness, anxiety, employee engagement, mental clarity, decisiveness, self-esteem and lifestyle, and in every single metric, there is clear evidence that drivers struggle more in winter than other seasons.”

He continued: “Anybody who drives a lot knows that it can be especially tough during the winter. From the moment you get out of bed in the dark and have to scrape the ice off in the cold, we know that business motoring in the winter months is hard work.

“But this is the first time we have been able to definitively get a picture of the scale of it, through analysis of our wellbeing data.”

It showed that around one in 10 business drivers suffer from some form of SADD-related issue during the winter months.

“That is a lot of employees who are struggling and need help,” added McIntosh.

This figure should also be seen in context of data from RoSPA which shows that collision rates increase by 19% in the fortnight after the clocks are turned back, and other winter-based emotional health factors, says Red.

According to the NHS, the exact cause of SAD (seasonal affective disorder) is not fully understood, but it is thought that a lack of sunlight might stop a part of the brain called the hypothalamus working properly, which may affect the production of melatonin, making you feel sleepy.

Also, lower serotonin levels can affect mood, appetite and sleep, and shift the body’s internal clock out of kilter.

McIntosh said: “The fact that driving impacts more negatively on a person’s mental health during winter is another hurdle to overcome for those already experiencing tiredness or depression.

“Seasonally Affective Driver Disorder can result in more sick days being taken, reduced productivity and, of course, is a real danger too, exacerbating the risk of accidents.

“For employees who really struggle with this, employers could do a number of things. They could try and reduce their mileage by doing more video-conferencing, or reschedule appointments so employees are not doing long drives in the morning or evening when the risks are higher.”

Every time a driver completes a Wellbeing Profiler, they get a report together with specific advice, tips and suggestions on how they may improve their wellbeing, health and resiliency.

Changes to the driver’s wellbeing is measured over time and these trends are also fed back, allowing the driver and the employer to manage their emotional and physical health in the longer term.

McIntosh concluded: “We measure overall resiliency and drivers’ scores improved on average by 19.72% after training, but more interestingly those that kept going and continued with the programme for more than four months, improved on average by an impressive 30.54%, meaning they were much more able to combat the feelings of fatigue, stress and anxiety.

“Companies are far more aware of the need to support those employees struggling with mental health, and those tucked away in their cars and vans, often alone for hours on end every day, should not be forgotten.”  By Graham Hill thanks to Fleet News

Gridserve will open more than 20 ‘electric hubs’, each featuring 6-12 x 350kW ultra high-power electric vehicle (EV) charge points with contactless payment, at motorway service stations across the UK by Q2 2022.

The majority should be installed by the end of March, with a further 50 additional electric hub sites set to follow. 

Two Electric Forecourts situated adjacent to major transport routes and motorways, including a flagship site at Gatwick Airport and Norwich, are also in construction, due to open in 2022.

Several additional Electric Forecourt sites now also have planning permission including Uckfield, Gateshead, Plymouth and Bromborough, with more than 30 additional sites also under development as part of the company’s commitment to deliver over 100 Electric Forecourts.

Toddington Harper, CEO of Gridserve, said: “Our mission is to deliver sustainable energy and move the needle on climate change, and that is exactly what we are doing – delivering.

“Getting people into electric vehicles is a big part of our vision but to do that charging has to be simple and free of anxiety, which is why we’ve designed our network entirely around the needs of drivers, listening to our customers’ needs and providing the best possible level of customer service to deliver the confidence people need to make the switch to electric transport today, eight-years ahead of the 2030 ban on petrol and diesel cars.”

Gridserve says it wants to revolutionise EV charging across the UK, following the acquisition of Ecotricity’s Electric Highway network in June.

Some of the Electric Hubs are also located in areas traditionally left behind in the EV transition, including Wales and Cornwall, helping to deliver its vision of giving drivers everywhere the confidence to go electric well ahead of the 2030 ban on new petrol and diesel cars.

Since the acquisition, Gridserve has invested tens of millions of pounds in the network to develop the new Electric Hubs, replace the 300+ existing motorway chargers it inherited from Ecotricity, and install 130 additional AC chargers to cater for all types of EVs.

The two new Electric Forecourts for Gatwick and Norwich will follow Gridserve’s blueprint of the world’s first Electric Forecourt in Braintree, Essex.

Gatwick Electric Forecourt

Developed in partnership with Gatwick Airport, the Gatwick Electric Forecourt will be a flagship site, serving passengers, commuters, staff, local residents and businesses that pass through the airport and its surrounding motorway network each year.

Located on the Ring Road South approach to Gatwick’s South Terminal and adjacent to the M23 – it will enable 36 EVs to be charged simultaneously, with high-power chargers that can deliver up to 350kW of charging power, capable of adding 100 miles of range in less than 10 minutes. Multiple charging connectors will cater for all types of electric cars.

The site is due to open in autumn 2022 and will host a café, waiting lounge with free superfast WiFi, convenience supermarket, children’s play area and a dedicated educational space to increase awareness around electric vehicles.

Harper said: “Gatwick isn’t just an airport, it’s an ecosystem of commuters, travellers, staff, taxi drivers, car rental companies, local residents and businesses, all culminating in a transport hub that hosts tens of millions of drivers every single year.

“The Gatwick Electric Forecourt will give these drivers and businesses the confidence to switch away from petrol and diesel cars, making electric journeys to and from one of the country’s most important transport hubs straightforward and sustainable.”

Jonathan Pollard, chief commercial officer, Gatwick Airport, said: “Our new high-powered charging facility will help meet the increasing need for electric vehicle charging infrastructure at the airport, including the growing number of our passengers who own electric vehicles and need fast, convenient and effective charging facilities.

“The new charging infrastructure will also benefit people right across our community, including thousands of staff who live locally, businesses looking to introduce electric vehicle fleets – even those operating buses and trucks – and also local residents who may be considering buying an electric-powered car but were undecided due to the lack of charging facilities.”

The Norwich Electric Forecourt, which is nearing the end of its construction, and scheduled to open in April 2022, will mirror the set up at Gatwick.

David Hall, VP Power Systems UK and Ireland for Schneider Electric, says the announcement from Gridserve will help “unleash” the potential of EVs by reducing fears of range anxiety.

“To support the growth of adoption in electric mobility, which is crucial to achieving ambitious targets to reduce global CO2 emissions, we need readily available infrastructure to support EVs and to ensure the electric revolution is renewable, plentiful, and affordable,” said Hall. “It is also a significant opportunity to rebuild the UK economy with climate action at its core.

“The UK already has more EV charging points than petrol stations, and one in ten new vehicles sold is an EV.  Businesses and transport companies are increasingly playing their part by switching to low carbon, net zero fleets for cars, trucks, and buses, which will be essential for cutting their carbon footprints.

We hope that this announcement will encourage those who were holding back to make the switch and come along for the ride.

“As the popularity of electric vehicles increases, we need to ensure that electric or hybrid vehicles are low-emission, the energy grid needs to be powered by a much higher percentage of renewables. This transition will bring additional consumer demand, effectively bringing the concept of net zero transportation to life.”

Gridserve’s latest sites:

Electric Hubs

Currently in construction: Swansea (Moto), Heston West (Moto), Severn View (Moto), Wetherby (Moto), Burton in Kendall (Moto), Exeter (Moto), Woolley Edge North (Moto), Woolley Edge South (Moto), Thurrock (Moto), Leigh Delamere Westbound (Moto), Reading West (Moto).

Entering construction early next year: Reading East (Moto), Grantham North (Moto), Scotch Corner (Moto), Washington North (Moto), Washington South (Moto), Cornwall Services, Annandale (Roadchef), Magor (Roadchef), Rownhams North (Roadchef), Durham (Roadchef), Watford Gap North (Roadchef), Watford Gap South (Roadchef), Northampton North (Roadchef), Northampton South (Roadchef), Strensham North (Roadchef), Strensham South (Roadchef)

Electric Forecourts

Currently in construction: Norwich Electric Forecourt (opening April 2022), Gatwick Electric Forecourt (opening Autumn 2022).

Planning permission secured: Uckfield, Gateshead, Plymouth, Bromborough.  By Graham Hill Thanks To Fleet News

UK new car sales: Registrations up 1% in 2021, but EV and van sales grow rapidly.

The Ford Transit is the UK’s best-selling vehicle; Vauxhall Corsa tops list of best-selling cars and Tesla Model 3 takes second.

New car registrations grew by just one per cent in 2021 with a total of 1.65 million cars registered compared with 1.63 million in 2020. That makes 2021 the second-worst year for car sales since 1992 and still around 25 per cent down on 2019.

“It’s been a tough old year,” said Society of Motor Manufacturers and Traders chief executive Mike Hawes.

However, while dealership shut-downs due to Covid were a major cause of slow sales in 2020, SMMT puts 2021’s drop almost entirely down to the shortage of semi-conductors affecting new car supply.

While overall sales were down, demand for electrified cars has shot up. 11.6 per cent of cars sold were battery electric vehicles with a further 7 per cent plug-in hybrids and 8.9 per cent full (or self-charging) hybrids.

“More battery electric vehicles were sold in 2021 than in the previous five years combined,” said Hawes.

Petrol still makes up by far the greatest number of cars sold with 58 per cent of all cars registered, with diesel still accounting for 14.2 per cent.

There was even better news in the light commercial vehicle market with 355,000 vans sold in 2021 – up 21 per cent on 2020 and only two per cent down on 2019. Ford’s Transit was also the biggest-selling vehicle overall in 2021.

When it comes to cars, Vauxhall’s Corsa stole top spot from Ford’s Fiesta, which slid out of the top ten altogether.

It’s the first time in 50 years that a Ford has not taken the number one position in the new car registrations chart; Ford’s Puma made it into the top ten in eighth place.

Tesla’s Model 3 was the best-selling electric car and second-best seller overall in 2021, with the British-built MINI in third place and the MINI Electric taking seventh slot in the EV chart.

The supply issues affecting the new car market are expected to continue into 2022 with SMMT currently estimating 1.96 million registrations for the year – still below what SMMT describes as “the usual run rate of 2.25/ 2.3 million.”

“It will be a challenging first half of the year,” said Hawes, “But it will ease. Our advice to customers is to get your order in and they’ll be fulfilled as soon as possible.”

Electric car sales are expected to continue to increase with SMMT expecting another 47 new plug-in cars to be launched during 2022. However, Hawes fired a warning shot at the government and charging industry claiming that the public charging network is becoming a big barrier to EV adoption.

“The pace of the continued take-up of electric vehicles will be about supply, but also assuring customers that this is a technology they can live with,” he said.

“That relates directly to the experience they have with charging; the availability of charging across the nation, but also in terms of the cost of charging and reliability of the charging framework, which we know isn’t as good here as it is in some other countries.

“The car industry is up for the challenge of 2030-2035 – we need all the other stakeholders to play their part as well.”

Top 10 best selling cars of 2021

1. Vauxhall Corsa
2. Tesla Model 3
3. Mini Mini
4. Mercedes Benz A-class
5. Volkswagen Polo
6. Volkswagen Golf
7. Nissan Qashqai
8. Ford Puma
9. Kia Sportage
10. Toyota Yaris

Top 10 best selling electric cars 2021

1. Tesla Model 3
2. Kia Niro
3. Volkswagen ID3
4. Nissan Leaf
5. Audi e-tron
6. Hyundai Kona
7. MINI hatchback
8. Renault Zoe
9. Vauxhall Corsa
10. MG ZS

Top 10 best selling plug-in hybrid cars 2021

1. BMW 3 Series
2. Mercedes-Benz A-Class
3. Volvo XC40
4. Ford Kuga
5. Audi A3
6. Range Rover Evoque
7. BMW X5
8. Volvo XC60
9. Range Rover Sport
10. Seat Leon

By Graham Hill thanks to Auto Express

Drivers are being warned of major changes to the Highway Code, which take effect from Saturday (January 29). Extra warnings were issued to fleet drivers who cover higher mileages

The new rules are aimed at improving road safety for vulnerable road users – pedestrians, cyclists and horse riders.

The Highway Code sets out information, advice, guides and mandatory rules for road users in the United Kingdom. Its objective is to promote road safety.

Law firm Irwin Mitchell says that many of the rules in the code are legal requirements, and if you disobey these rules you are committing a criminal offence.

“You may be fined, given penalty points on your licence or be disqualified from driving,” explained Peter Lorence, a serious injury lawyer at Irwin Mitchell.

“In the most serious cases you may be sent to prison.”

Although failure to comply with the other rules of the code will not, in itself, cause a person to be prosecuted.

The Highway Code may be used in evidence in any court proceedings under the Traffic Acts to establish liability. This includes rules which use advisory wording.”

What’s changing in the Highway Code?

The changes to The Highway Code are extensive, says Lorence.

Previously the Highway Code had guided for all road users to be considerate towards each other, applying this principle to pedestrians and drivers equally.

“If you are looking to turn into a road and a pedestrian is waiting to cross, you are expected to give way,” Peter Lorence, Irwin Mitchell

The new hierarchy of road users places those who can do the greatest harm with the greatest responsibility to reduce danger to others.

“This is designed to protect the most vulnerable people on our roads,” explained Lorence.

The new rules place emphasis on this hierarchy applying most strongly to drivers of heavy goods vehicles and passenger vehicles, vans, minibuses, cars and motorcycles.

Likewise, cyclists, horse riders and drivers of a horse drawn vehicle have a greater responsibility to reduce dangers posed to pedestrians.

Lorence continued: “One change that should be highlighted in particular is pedestrian priorities at junctions.

“Currently, road users should only give way to pedestrians who have started to cross the road into which they are turning.”

The new Rule H2 of the revised code provides for priority to be given to pedestrians who are waiting to cross the road as well.

“Therefore, if you are looking to turn into a road and a pedestrian is waiting to cross, you are expected to give way,” added Lorence.

“We’re concerned that this significant change poses risks to pedestrians who may assert their rights under the new rules, yet drivers may not be aware of this change.

“It is therefore important for all road users to be aware of the new rules, to ensure everyone’s safety and understanding.”

Rules for drivers and motorcyclists at junctions

Lorence says that there are too many deaths and life-changing injuries as a result of vehicles turning across the paths of cyclists at junctions.

“Drivers may fail to check for the presence of cyclists before committing to their manoeuvre, even when cyclists have been alongside them when doing so,” he said.

The new Rule H3 is designed to protect cyclists from this happening. “It sets out that when turning into or out of a junction, drivers should not cut across the path of any other road user,” he added.

“The guidance now stipulates not to cut across cyclists, horse riders or horse drawn vehicles. This includes where there is cycle lane at the nearside.

“Road users are expected to stop and wait for a safe gap before beginning their manoeuvre. Drivers are tasked with not turning at junctions if it would cause someone going straight ahead to stop or swerve.”

Safe Passing Distances

Close passing represents a serious danger to the most vulnerable road users. “We’ve seen cases of people on bicycles being clipped by fast moving traffic, resulting in catastrophic injuries,” continued Lorence.

“We’ve also seen those cycling in our city centres be dragged under the wheels of vehicles that have attempted to pass them, but done so too closely.

“In addition, we have seen cases of horse riders and horses being hit by fast moving traffic, resulting in deaths and serious injury.

“Due to horses being flight animals that can move incredibly quickly if startled, close passing at speed can also pose dangers to riders and horses, even without an actual collision.”

Rule 163 now prescribes safe passing distances for when overtaking cyclists, motorcyclists, horse riders and horse drawn vehicles.

This includes guiding on at least a 1.5 metre space when overtaking a cyclist at speeds of up to 30mph. More space is expected when overtaking at speeds in excess of 30mph.

If when passing a pedestrian who is walking in the road, drivers are expected to allow at least two metres of space and to maintain a low speed. Extra care should be taken in poor weather.

The guidance also sets out that drivers should not overtake if it is unsafe or not possible to meet the clearances set out.

In addition to setting out safe passing distances, the new Rule 72 establishes the right for cyclists to ride in the centre of their lane, to ensure that they remain visible.

Lorence explained: “Cyclists are only expected to move to the left to allow faster vehicles to overtake when it is safe to do so.

“At junctions or on narrow roads, cyclists can maintain their central position where it would be unsafe for a driver to overtake.”

Rule 213 has also been changed to confirm that on narrow sections of roads, horse riders may ride in the centre of the lane and drivers should allow them to do so for their own safety, to ensure they can see and be seen.

Safely passing parked vehicles and the ‘Dutch Reach’

When cycling by parked vehicles, the risk of doors being opened into a cyclist’s path is a real danger and a common cause of collision.

Previously, the Highway Code had warned only for cyclists to watch out for doors being opened. Rule 67 has now been revised to provide guidance on the safe distance to pass parked vehicles; it now suggests leaving a door’s width or one metre when doing so.

For those opening the doors of parked vehicles, Rule 239 has also been updated to include what is often known as the ‘Dutch Reach’.

“When you are able to do so, you should open your vehicle door using your hand on the opposite side to the door you are opening,” said Lorence.

“For example, if you are in the right-hand seat, you would use your left hand to open the door. In doing so, this forces you to turn your body and your head, better enabling you to check over your shoulder and your blind spot.

“This better enables those in vehicles to check whether it is safe to open their door, reducing the chance of opening their door into someone’s path.”

He continued: “These changes are largely very welcome, and we were proud to take part in the Government’s consultation.

“In preparing our consultation response, however, we reflected on our clients’ stories and how the life-changing incidents they suffered could have been easily avoided had these changes been made sooner.

“Nevertheless, we celebrate these changes which represent an important step towards eliminating deaths and serious injuries on our roads.”

Welcoming the changes to the Highway Code, Brake says that the introduction of a road user hierarchy is important for road safety.

Jason Wakeford, head of campaigns at Brake, explained: “It means it is clear that road users who can do the greatest harm have the greatest responsibility to reduce the risk they pose to more vulnerable users, such as pedestrians, cyclists and horse riders.”

The focus on better protecting vulnerable road users in the new Highway Code follows the Government’s July 2021 announcement of £338m for building segregated cycle lanes and walking schemes.

As part of the hierarchy approach, Wakeford says it is crucial that funds continue to be released for safe space for walking and cycling, with 20mph speed limits in areas where people live and work.

He added: “It’s vital that Government works hard to promote the Highway Code changes, to help all road users understand the new rules and our shared responsibility to reduce deaths and serious injuries.

“We urge all road users, particularly drivers, to look at the updated Highway Code, learn about the changes, and do their bit to put safety first.”

Changes the “right move”

Matthew Walters, head of consultancy services at LeasePlan UK, believes that putting the greatest responsibility on those who can cause the most harm in a collision is the “right one”.

However, he said: “We would have liked to have seen the Government do a wide-scale communications campaign, to ensure that all drivers and road users are aware of the new laws and guidelines.

“Without one, we run the risk of many motorists continuing on as normal, which could lead to a higher level of incident.”

For this reason, Walters says that the onus is on businesses to make sure that their drivers are aware of the changes to Highway Code and adhering to them.

He added: “Business fleet managers should be working with their drivers to improve safety across the team and reduce incidents. This includes thorough training sessions and carrying out regular driving licence checks.”

Louis Rix, COO and co-founder of car finance platform CarFinance 247, thinks we are very likely to big debates – particularly on social media – between those who prioritise motorists and those who prioritise pedestrians and cyclists.

“There’s already such a big debate surrounding motorists and cyclists,” he said. “Look at Jeremy Vine, who loudly campaigns for better treatment of cyclists using roads.

“We have cycle lanes in many areas now, but in the places where they don’t exist, drivers need to be patient and treat cyclists with the same respect as other road users.

“The argument among road users around who should be prioritised isn’t going to end any time soon; we have to learn to co-exist on the roads and motorists should lead the way in changing current attitudes.” By Graham Hill thanks to Fleet News

The leasing industry has grown in the past five years, with private ownership falling in Europe from 53% of total market in 2013, down to 42% in 2021, according to research by Jato Dynamics.

The report, ‘An industry in flux: Leasing in the automated age’, showed that leasing has gained popularity – it is estimated that five million vehicles were leased in the UK, last year – with 1.9 million of those being individual or personal contracts.

Separate research from Fleet News recently showed that, after two consecutive years of decline, the FN50 – the UK’s top 50 leasing companies by risk fleet size – had stabilised over the past 12 months with a slight rise in the number of funded cars and vans to 1,663,421 (up by 1,101 units).

Jato said the rise in demand for leasing can be explained by evolving priorities for consumers – where individuals previously thought it was important to own a car, perceptions have shifted where the focus is now on the usage of a vehicle.

David Krajicek, chief executive officer at Jato Dynamics, said: “The leasing sector has evolved significantly in recent years.

“Impacted by many factors – such as technological advances, digitalisation, and changing consumer priorities – OEMs and leasing companies must now ensure they shift away from manual processes and adapt to changing customers’ wants and expectations.

“Those that fail to respond to this evolution risk damaging business relationships, sales prospects, and their chances to succeed in the increasingly competitive market.”

Leasing rather than ownerships poses benefits including lower maintenance costs, greater flexibility and the ability to upgrade to new models and technology – which is important as consumers now expect to consistently access new products and services, according to Jato.

Research from Salesforce found that three quarters (75%) of consumers’ site search queries are new each month. The growing desire for new products and features can be linked to the rise in popularity for leasing subscriptions, rather than committing to one, single vehicle for several years, said Jato.

In 2020, 72% of customers expected to be able to apply for a leasing contract entirely online, according to reserach by Capgemini. Jato said the research highlights that automation has a role to play in the automotive sales processes.

With the leasing marketing growing, creating a seamless customer experience through digitalisation and automation will be the ‘vital’ next step for OEMs and leasing service providers to accelerate their sales and profit margins, Jato said.

By Graham Hill thanks to Fleet News

The decision to cut the plug-in car and van grant by up to £1,000 and change the eligibility criteria has been criticised by the fleet and leasing industry.

The Department for Transport (DfT) said the reduction would make its “available funding go further” and help more businesses and consumers make the switch.

Announcing its Net Zero Strategy in October, the Government confirmed £620 million funding for zero emission vehicle grants and EV infrastructure, including funding for local EV infrastructure, with a focus on local on street residential charging.

The additional money for the plug-in grant, however, came after ministers said the grant would reduce as electric vehicle (EV) adoption rates increase.

It also warned that it was “unlikely” it will be able to give advance notice of cuts to the plug-in car and van grant after a reduction in the grant for the purchase of electric vehicles (EVs) was announced without any notice in March.

The electric car grant was cut from £3,000 to £2,500 and models that cost more than £35,000 were excluded.

Mike Hawes, chief executive of trade body the Society of Motor Manufacturers and Traders (SMMT), said: “Slashing the grants for electric vehicles once again is a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a 10-year high and pandemic-related economic uncertainty looming large.

“Industry and Government ambition for decarbonised road transport is high, and manufacturers are delivering ever more products with ever better performance. But we need to move the market even faster – from one in a hundred cars on the road being electric, to potentially one in three in just eight years – which means we should be doubling down on incentives.

“Other global markets are already doing so whereas we are cutting, expecting the industry to subsidise the transition, and putting up prices for customers. UK drivers risk being left behind on the transition to zero-emission motoring.”

Richard Jones, managing director at Lex Autolease and Black Horse at Lloyds Banking Group, said that the industry understood policymakers will need to continuously review the grants available as the uptake in EVs continues to accelerate. 

However, he told Fleet News that the announcement to reduce the eligibility threshold from £35,000 to £32,000 for electric cars impacts around 60% of the vehicles available in the market, increasing rentals on new orders on a 36-month agreement by around £70 a month overnight.

He added: “We hope that Government departments and industry bodies continue to work together to maximise the opportunities to encourage EV uptake and reassure manufacturers that the UK is leading the EV charge.”

Jon Lawes, managing director of Hitachi Capital Vehicle Solutions, agreed. He said: “Last minute cuts are counter intuitive to achieving the ambitious targets set by Government to reduce carbon emissions and has the potential to dampen the strong demand for zero emission vehicles we’ve seen in recent months.”

Despite the growth of EV registrations, Lawes says the market remains in its “infancy” and total cost of ownership (TCO), especially across LCVs, can be “challenging” for fleet operators who need to adopt.

“The Government rationale to reducing eligibility at this juncture for the second time this year is confusing, as we know financial incentives to encourage EV adoption are an important factor within the vehicle renewal decision making process,” he said.

“In light of these changes, we are working closely with our customers to recalculate their TCO so they can readily factor this development within their decision making.”

Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association (BVRLA), said that financial incentives, such as the plug-in grant, had proven vital to fleets and consumers making the switch to an EV.

“Subsidies cannot run forever, but the fleet sector relies on certainty, reducing these grants will have a negative impact on this,” he said.

Electric car subscription service, Onto, also believes the changes risk slowing down electric car adoption rates, ultimately putting the climate change goals at risk.

Co-founder and CEO of Onto, Rob Jolly, said: “We heard at COP26 the government’s focus was on getting people into electric cars quickly, and yet this decision will only slow down the adoption of EVs.

“We know that range anxiety is the number one consumer concern and reducing the cap to £32,000 means customers have no choice but to buy smaller cars with smaller ranges.

“We understand that the money-pot is finite and the grant must be lowered £1,500 to make economical sense, however we strongly disagree with the reduction of the cap – in fact it should have stayed at £50,000 to give consumers choice and help them make the switch.”

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle dealers in the UK, says the cut is “extremely disappointing” and warned it could “derail” the progress.

She added: “Cutting the grant strongly disincentivises EV adoption across the UK. This, in turn, will exacerbate the unequal, regional EV uptake gap.

“While the market share of EVs is growing at an impressive rate, it is premature to reduce the levels of this support to the consumer and send the wrong message to the public, especially as other G7 nations continue to ramp up consumer support.”

Tanya Sinclair, policy director for UK and Ireland at ChargePoint, said: “We understand the Government’s broad programme of grants and incentives was always designed to stimulate the early EV market and, over a decade since their inception, the EV market continues to develop at pace.

“We look forward to the Government announcing a long-term, more sustainable successor to the grant schemes which can incentivise EV uptake, such as fiscal incentives and road pricing.”  By Graham Hill thanks to Fleet News

McCarron Coates is warning drivers that the world of insurance claims is evolving, with the cost of vehicle repairs now outweighing those of personal injury claims for the first time in many years.

The shift in balance between the two main components that make up the total claim value is not down to any changes in legislation, such as the 2021 Whiplash Reforms, but due to the soaring cost of vehicle parts and repairs, says the fleet insurance specialist.

The costs, it explains, are partly driven by difficulties in obtaining parts post-Brexit, while repairs costs also have an element of inflation within them due to overall labour shortages.

However, for the most part, McCarron Coates says it is because there are few simple repairs now, with so many different and interlinked electronic components within vehicles that any reasonably significant prang is likely to see many parts of a vehicle needing to be replaced.

The issue is exacerbated when the vehicle is an electric vehicle (EV).  The battery is a hugely expensive part of an EV and any damage to it is likely to result in a large repair bill or even a quick total write-off, it says.

The cost of an EV claim is also influenced by repair delays, with an EV repair taking significantly longer to complete than one on a vehicle with an internal combustion engine (ICE).

Sometimes, an EV has to be sent to a specialist repair centre, meaning the time off the road – and time during which an expensive hired vehicle might be required – is even longer.

McCarron Coates believes some insurers have not yet been able to accumulate enough knowledge with which to calculate the right level of insurance premium for the EV risk and so are levying extremely high compulsory excesses, of a level of around £1500, rather than the £500 we might expect to traditionally see on a fleet policy.

“The cost of vehicle repairs is driving up overall claims costs and that is not good news for any fleet operator, as it will translate into higher premiums in the months to come,” said Ian McCarron, director at McCarron Coates.

“Operators need to make sure their fleet bucks the trend, by enhancing their risk management, addressing the reasons for accidents and trying to keep their vehicles out of the repair shop.

“That, in turn, will increase operational efficiencies within the business and reduce the amount of time that the business has to give to claims handling.”

The insurance broker’s advice to fleet transport operators is to do all they can to manage their risks on the road better, seeking to avoid the accidents that could land their vehicles in the repair cycle, for some time.

The focus should be on enhanced driver training, an analysis of individual drivers’ weak points, so that these can be addressed, and on the use of telematics, to help increase driver awareness of the hazards around, it says.

McCarron concluded: “It is essential that fleet operators act now, instilling a better driving culture and the principle of trying to keep the vehicle, its driver and all other third parties safe, at all costs.”  By Graham Hill thanks to Fleet News