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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

I’ve mentioned on many occasions that you don’t need to carry out an HPI or Experian check on a car, before you buy it, in order to keep the car if it turns out to be on HP, PCP or Conditional Sale finance. This is very true.

So you can ignore the threats by the likes of HPI that you could lose your new car along with the money you paid for it if you failed to carry out an HPI check. The fact is that section 27 of the Hire Purchase Act 1964 says that if you have not been advised that the car is on HP by the seller and it turns out that the car was on HP you are an innocent buyer and you keep the car.

I suggest that you carry out a check before buying a car, especially if you are buying from a private individual. Even if title passes it can still be quite painful fighting off a finance company that is determined to get their car back.

So whilst it may seem fairly straightforward from a legal standpoint it isn’t always that simple. For example, if you did a straight swap with the other person, who still had finance on the car but didn’t tell you, title won’t pass. Or if you swapped say a painting or your stamp collection for the car again title won’t pass.

The reason is that some cash needs to exchange. Title will pass if you part exchange your car plus some money for the car on finance. So this is the key, some cash must be part of the deal. 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

I have to say that I fall foul of this one myself. Do you allow your car insurance to auto-renew or do you compare rates? It has been a concern of the regulators for years but they’ve done very little about it. In one report a driver had his premium increased by over £200 with no explanation even though his car and circumstances hadn’t changed.

For ages the insurers have rolled out the same old tired excuses – hikes in Premium Tax Rates, increased cost of repairs and increased vehicle thefts. OK, we can see that but a rise of £200 – get outa here.

Some insurers we know offer cheap 1^st-year rates to capture new customers in the knowledge that a large number won’t shop around and will remain with them in future years when they can increase the premiums. That being the case it opens the door to consistently achieving low rates if you swap every year.

In the meantime, the British Insurance Brokers Association (BIBA) and the Association of British Insurers (ABI) have signed up to an agreement to prevent ‘excessive’ premium hikes when ‘auto renewing’.

Insurers will be expected to be more transparent and advise customers that rates could increase in the future and they will also need to review rates for long-term customers. That all sounds very good but I simply don’t believe them. First of all what constitutes an ‘excessive’ increase?

And in the second place what penalties will be doled out? No answer to either question was forthcoming. Maybe a step in the right direction but in the meantime stop auto-renewing and search the internet for better deals. By Graham Hill

In the course of a week, I’ve had two clients signing up contracts and having to send off their driving licences with the signed documents, only to find that their licences showed their old address.

There are 1.5 million motorists with driving licences showing the driver’s old address. Whilst this has dropped from 2.6 million in 2014 that’s still a lot of people who could be facing fines of £1,000.

You could be stopped for any reason requiring you to provide your driving licence at which time you could be fined if your address isn’t current. As one newspaper pointed out if the police could find a way to identify the drivers with licences showing the wrong address the fines could provide income of £1.5 billion.

If you find the address is out of date you can renew by following the instructions after clicking on the link below. It is free to change your address and you can continue to drive whilst the change is being processed:

https://www.gov.uk/change-address-driving-licence/apply-by-post

Do it now!! 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