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Then you probably need to read the findings of Warrantywise when they surveyed claims made on used cars revealing the most and least reliable cars.

 

Most & least claimed-against brands:

Most Reliable – Least Claims	Least Reliable – Most Claims
Honda	Land Rover
Toyota	Jaguar
Skoda	Volvo
Mazda	BMW
Fiat	Vauxhall

 

Most & least claimed car models

Least Claimed Models	Most Claimed Models
VW Polo	Range Rover Sport
Ford Fiesta	Vauxhall Zafira
Ford Focus	Vauxhall Insignia
Ford Transit	Peugeot 207
Audi A3	Vauxhall Astra
Audi A4	Mercedes C-Class
Vauxhall Corsa	Mini Cooper
BMW 3 Series	Seat Ibiza
Nissan Qashqai	Fiat 500
BMW 1 Series	Renault Clio

 

So if you’re thinking of buying a used car and you want one that is least likely to go wrong and potentially cost you money in repairs choose from the least claimed list. On the other hand you could take out a lease on a new car and benefit from a new car warranty. By Graham Hill

If you were told this by the manufacturer of your car and that he would fix the problem if you popped it into your nearest dealer for free, why wouldn’t you go? Or if you needed to check a website to see if your car was one that had the fault wouldn’t you check it?

 

Well in 2013 this problem was identified. Takata airbags were fitted to 66 global models and all could have the fault so a massive recall got underway. In the UK 2.9 million cars were affected but to date, 991,333 cars remain unrepaired – could yours be one of them?

 

You may recall in 2015 Vauxhall hit the headlines as a result of their Zafiras built between 2005 and 2014 possibly having faulty heating components fitted causing the cars to catch light. The affected cars were identified and recall notices were sent out to 234,000 drivers. 30,686 have still not been repaired so any of those could catch fire at any time. Might be a good idea to check your car out if you’re driving a Zafira.

 

As with the Zafira, BMW issued a recall in 2018 on their 3 series built between 2004 and 2011. Again faulty heater wiring could lead to a fire but of the 279,104 cars affected 197,352 remain unrepaired. According to the DVSA there are still 2.39 million cars subject to safety recalls that have still not been repaired, an estimated 1 in 13 cars.

 

According to Auto Express, Edmund King – AA President, said that ‘Generally the recall system in the UK works quite well…’ What? A third of cars that have a potential fault that could result in shrapnel being fired into the face of the driver or passengers doesn’t suggest to me that the system is working quite well!

 

As a result of this highly dangerous situation, the Driver and Vehicle Standards Agency (DVSA) is proposing to align two of their systems, the recall register and MOT test records. They propose that if a car is subject to a recall it is noted in the advisory section of the MOT certificate. If it appears the following year the car should fail the test.

 

Personally, I don’t feel this goes far enough, the recalls should be aligned with road fund licence and if the car hasn’t been repaired the driver can’t renew the tax – surely if the car is a danger to the driver, occupants and other road users they should not be allowed on the road. If we rely upon the MOT test the car will be 3 years old before the note is made on the certificate.

 

If you would like to check to see if your car has a recall go to: https://www.check-mot.service.gov.uk/   By Graham Hill

There are many drivers who would never entertain driving a new car – usually for all the wrong reasons. ‘They depreciate quicker than a used car’ – not necessarily so if you go for a nearly new used car! I’ll have a training video for that! They cost more to service! Some new cars can be 2 years old before they need their first service which is just an oil and filter change. And a new car certainly doesn’t cost more to maintain and is covered for at least 3 years, 60,000 miles by the manufacturer’s warranty.

 

But even worse than this is the number of used cars that are ‘clocked’. This is the name given to the practice of reducing the miles showing on the car’s odometer. It is illegal to do so then sell the car on with the customer believing that the mileage on the clock is genuine.

 

The Local Government Association (IGA) which represents 370 councils in England and Wales found a large surge in the number of vehicles that had been clocked. In fact 0ne in 16 cars are clocked according to the IGA at a cost to buyers of £800 million every year. This is the difference between the value of cars on their genuine mileage and the value on the clocked mileage.

 

But more important for me is the potential danger of driving a car that has had the mileage adjusted. Many service and maintenance alerts are mileage based so by winding back the mileage it can throw out the alerts which means you could be driving a car that is seriously dangerous not only to the driver and passengers but also pedestrians and other road users.

 

This situation has been in existence since before I learned to drive with my dad and that was a very long time ago. And the same loophole still exists in the law. It is technically illegal to sell a car that has had the mileage clocked it is still legal to alter the mileage of your car. The EU was to introduce a law in May making it illegal to advertise the electronic devices used to clock cars but that legislation has been delayed.

 

Councillor Simon Blackburn from the LGA said ‘Car clocking is a major rising fraud, that not only rips off motorists but can have dangerous implications. The proposed EU ban on mileage correction services needs to be made part of UK law as soon as possible’. Automotive data company, HPI, found one in 16 cars had a mileage discrepancy, with the number of clocking incidents rising by 25% between 2014 & 2016. Something needs to be done urgently – lives could be at risk.

 

In a final piece of research I have found a warning from Autonet Insurance Group saying that if you buy a car that has been clocked, so the declared mileage to the insurer is incorrect, you risk making your insurance cover invalid. So you need to make sure you take every precaution to ensure that the mileage is correct. You have been warned. By Graham Hill

In May this year, we saw some major changes to the MOT test, the biggest of all was with regard to emissions. If the tester saw any smoke emitting from the exhaust he was obliged to fail the car. Something that most people felt uncomfortable with as it’s a tad arbitrary relying on the discretion of the tester.

 

As a result, according to the Driver & Vehicle Standards Agency (DVSA), MOT failures amongst diesel cars has increased by 4 fold between May and November 2018. In total 238,871 diesel cars failed their MOT test compared to 58,004 during the same period in 2017. I have to say diesels have always struggled to get through the emissions section of the MOT test but the failure rate is now 17%, up by 10% over the previous testing regime.

 

Having said that the diesels weren’t alone as there was also an increase in petrol cars failing the new emissions test, up from 292,468 in 2017 to 505,721 this year. A total of 750,000 failed the emissions tests between May and November, up from 350,000 over the same period last year.

 

The smoke test appears to be the biggest reason for failure. Any diesel car fitted with a particulate filter (DPF) must now pass the visual smoke test. If it emits smoke from the exhaust of any colour it will fail. In the case of petrol engines if the exhaust emits either dense blue smoke or clearly visible black smoke whilst idling for more than 5 seconds – again that’s a fail.

 

Vans are even worse when it comes to failing. The DVSA pointed out that as a result of the new emissions tests the failures have rocketed from 3,585 in 2017 to 19,648 this year. That’s a rise of 448%. Whilst the number of emission test failures have increased the overall failures have remained pretty much the same.

 

Total tests were 8.2 million petrol and 6.6 million diesel. The one question that hasn’t been answered was how many cars had to be scrapped because they couldn’t get the emissions clean. A frightening thought if you’re driving a used car. A pretty good reason to stop buying used cars and go for new cars. By Graham Hill

As a consumer, you are probably aware that you have a very strong position in law whenever you have disputes with a supplier whether or not finance is involved. When it comes to cars your position is stronger if you have taken out finance because you have even more Acts of Parliament to protect you.

 

But what if you are a sole trader, partnership or SME without the resources of a large corporate? Certainly not enough money to take on a large dealer group when you believe that the car isn’t fit for purpose or as described and the only course of action is to go to court.

 

What many small business owners are unaware of is that the Financial Ombudsman Service (FOS) is available not only to consumers but also small business owners. At one stage the facilities were available to sole traders and small partnerships only but this has been extended to limited companies provided they are what is termed in EU law as a Micro-Enterprise.

 

To qualify as a Micro-Enterprise you must have a turnover of less than 2 million Euros AND employ less than ten members of staff – even if you are a limited company. Now here’s the interesting thing. If you look through consumer credit legislation it pretty much excludes businesses. But the Ombudsman isn’t constrained by the law and will sometimes find in favour of a supplier or customer based simply on his sense of fairness.

 

The thing is that even if it doesn’t go your way you don’t have to accept the Ombudsman’s decision. You can still go to court if you have the money to do so, whilst on the other hand, if you are successful the other side must accept the decision of the Ombudsman if you choose to accept the ruling.

 

So in future don’t despair if you aren’t being treated fairly by a dealer or their finance provider. Register a complaint with the FOS. By Graham Hill

A new police unit has been set up to deal with dash cam and helmet cam footage showing drivers committing offences as part of a Government road safety initiative.

 

The announcement of the creation of this new unit was made by the Department for Transport (DfT) as a 2-year plan to make roads safer. In their announcement, they stated that it is intended, ‘ to combat road rage, encourage greater mutual respect between road users and protect the most vulnerable’.

 

The task force does not yet have a name but will be a ‘national back office’ serving police forces. An initial investment of £100,000 has been put in to test the waters. No information is yet available as to how the public will get the video footage to this team but according to AutoExpress they feel the new scheme will operate in the same way as Operation Snap that was introduced in Wales.

 

When piloted it reduced the time taken to review footage from up to 15 hours (really?) to just 15 minutes. There are 7 offences that the public can report using video footage as follows

Dangerous Driving

Driving Without Due Care & Attention

Careless Driving

Using A Mobile Phone

Not Wearing A Seatbelt

Contravening A Red Traffic Light

Contravening Solid White Lines

The DfT says that dash cam footage and video from motorcyclist and cyclist cameras could lead to investigations for ‘other offences where the driver is clearly not in proper control of the vehicle and which could lead to collisions’. By allowing drivers to submit video footage they believe that they will be able to increase detection rates at no extra cost.

 

The 2-year plan also includes allowing local authorities to issue tickets to drivers parking in cycle lanes with penalties from £70 to £130 in London. Councils will also be encouraged to spend 15% of their local transport budget on cycling and walking infrastructure. Personally, the whole thing concerns me as I can see a rapid increase in road rage. By Graham Hill

A Government Select Committee investigation has revealed that hand car washes can be ‘modern slavery in plain sight’. As a result of which they have called for them to be licenced. The Environmental Audit Committee’s probe into working practices at hand car washes (HCW) was told they play host to a ‘spectrum of exploitation’.

 

They raised concerns regarding the non-payment of minimum wage, workers at risk of trench foot and chemical burns. And untreated wash water having toxic effects on plant and animal life. As a result, the industry and various Government bodies launched a pilot Responsible Car Wash Scheme earlier this year with washes urged to sign up to a set of standards and display a Reasonable Car Wash Operator logo at their sites.

 

The Environmental Audit Committee recommended a trial licensing scheme for HCW’s to tackle the ‘widespread and flagrant rule breaking’ across the industry. The committee says that authorities should start by ensuring that car washes in supermarket car parks are compliant with labour laws. Much more to come I suspect.

I’ve done this myself and got really angry in the worst town in the world for driver convictions (in my opinion) – Croydon. I was fairly close behind a bus travelling through the town and as we crossed over a crossroad into the same road without seeing any sign to show that the road opposite was simply a two-way bus lane. Of course by the time I saw that the road was simply a bus lane it was too late. A No Entry sign showing ‘Except buses, taxis and cycles’ underneath would have been handy.

 

So I wasn’t surprised to read that drivers were fined £42 million for driving in bus lanes last year. One road alone generated £1.48 million in fines. Last year there were 888,760 notices issued. In London the fines for driving in a bus lane reached £7.57 million with Ealing council responsible for more than 40% (£3.1 million) of London’s total.

 

In Glasgow drivers were fined £6.52 million whilst Cardiff drivers had to part with £5.59 million for driving in a bus lane. Confused.com were behind the figures collated after a Freedom of Information request. It also found out that 39% of drivers admitted driving in a bus lane whilst 48% said they had done so unwittingly. 41% said that they had done so because of unclear markings or signage – I know what they mean.

 

Confused.com’s motoring editor, Amanda Stretton, suggested that bus lanes present the most confusing challenge to motorists. She also suggested that the money raised should be used to improve signage and questioned the level of fines as motorists felt they were ‘unfair and excessive’. The High Street in Oxford was the road that generated the most revenue at £1.48 million. Potentially because only buses, taxis and cycles are permitted to enter sections of the street between 7.30am and 6.30pm.

 

You’ve been warned. By Graham Hill

I’m about to add the following to the downloadable report following a note from a PCP customer.

 

The Decreased Monthly Rental Scam

 

A consumer ordered a car on a fairly long lead time and was asked to pop into the dealership when he had a moment as they have found a way to decrease his monthly rental. He called into the dealer to be shown a new set of documents and the good news that his monthly rental had dropped by over £10 per month, all he needed to do was sign up the new documents. Great news you would think.

 

But upon closer inspection of the documents he found that the cost of the car had increased by £500 and the final balloon payment had also increased but by £1,000. On an APR of 4.9% he also noticed that he was paying an extra £100 in interest charges.

 

The argument here is that there has been a price increase since the original contract was signed and because the used car market is looking very buoyant the leasing company has decided to increase the resale value.

 

This is good for the dealer as he would have fixed the purchase price so the increase of £500 goes straight into his pocket and he still receives his commission for arranging the PCP. It also adds another £500 to his total amount funded which attracts a volume related bonus, based on the amount financed, at the end of each quarter or year. So we have a happy dealer.

 

Now the next part is a little harder to explain. The finance company is invariably the manufacturer’s own operation so there is a very tight relationship between the two. And this is where a lot of people get confused, and this includes, I believe, the Governor of The Bank of England. Let me explain. Let’s say you pop into Curry’s and buy a TV for £499. It obviously doesn’t cost Curry’s £499, if it did they would soon go out of business. It would have cost them say £300 making them nearly £200 profit.

 

So it makes a lot of sense that the finance company also makes a fairly good markup when it ‘sells’ a PCP agreement. I’ll quickly run through the process then I’ll sum up so that if you are faced with this conundrum you can make a value decision.

 

Example: Your original agreement stated:

Purchase price (After deposit etc.): £30,000

Balloon: £12,000

APR: 4.9%

Monthly Repayment: 36 x £587.67

Total Payable: £21,156.12  (Depn £18,000, Interest £3,156.12)

By the way I’ve used a standard PCP calculator to work out the interest charges.

Fairly simple so far and please bear with me as I’m simplifying what is a very complex set of calculations in the books of the lender. They will use expressions such as cost of funds, yield, interest spread – I’ve ignored that and am explaining as simply as I can.

 

In the books of the lender:

Purchase price: £30,000 – this is paid to the dealer for the car

Manufacturer’s subsidy, bonuses etc.: £3,000 (This is an amount paid by the manufacturer to the leasing company)

Net cost to the lender: £27,000

Balloon: £11,000 – This needs some explanation as even the Governor of The Bank of England may have this wrong. Let’s say that the car is expected to be worth £12,000 at the end of the agreement as shown on your contract. To stand the car in their books at £12,000 would be like Curry’s selling their TV’s for what they pay for them – commercial suicide.

They have to allow for the cost of collection, preparation, admin and selling costs. So this would require the lender to stand the car in their books at something less than the balloon on your agreement. I’ve suggested £11,000

Let’s say the cost of money (interest) is the equivalent to 1.9% APR

Having allowed for the £3,000 contribution from the manufacturer let’s look at income vs cost:

Interest Paid By You:                         £3,156.12

Cost To Lender:                                  £1,100.00

Net Income To Lender:                      £2,056.12

 

Depreciation Paid By You:                 £18,000

Depreciation Allowed By Lender      £16,000

Net Income To Lender:                      £  2,000

 

Lender’s Income From Disposal         £   1,000  (your balloon £12,000 – book value £11,000)

Total Net Income                                   £5,036.12

 

If you now recalculate the figures again (let me know if you would like all of the workings)

The dealer now receives £30,500 – an extra £500

With the balloon increasing to £13,000 you now pay £17,500 depreciation (£30,500 – £13,000)

With the change in figures you now pay £3,264.44 in interest charges.

The lender leaves the balloon at £11,000 in his books so as a result of the increase in cost of the car (£500) now has to pay £1,114.80 in interest charges, up from £1,100.

So let’s look at the effect on the books of the lender again if you sign the new contract:

Having allowed for the £3,000 contribution from the manufacturer let’s look at income vs cost:

Interest Paid By You:                         £3,264.44

Cost To Lender:                                   £1,114.80

Net Income To Lender:                      £2,149.64

 

Depreciation Paid By You:                 £17,500

Depreciation Allowed By Lender      £16,500

Net Income To Lender:                      £  1,000

 

Lender’s Income From Disposal         £   2,000  (your balloon £13,000 – book value £11,000)

Total Net Income                                £5,149.64

 

To Summarise

Sorry if you felt the need to work your way through the figures but this is the complexity of a PCP. I guess the first thing to take away from this, as mentioned elsewhere in the report, is that the calculations that appear in the books of the lender are different to those on the agreement.

Next is your decision:

First of all, if you have signed a regulated agreement with another party who has also signed, then following the legal period of grace it is ‘executed’ so you can refuse to sign a new agreement.

 

But should you sign a new agreement? You pay the same deposit followed by 36 payments that are about £10 per month less than the original agreement so money in your pocket which is fine if you simply hand the car back at the end of the agreement.

 

However, if you want to own the car at the end of the agreement you will now have to stump up another £1,000. The car may well be worth it with a trade value about the same as the final balloon but you still have to find the extra money. So whilst you may have saved 36 x £10 = £360 you now have to pay an extra £1,000 making the net loss £640.

 

As you can see PCP calculations can be very complex and it is easy to manipulate them to make it look like you are getting a better deal than you thought you were. If it was me I’d sign the new agreement and hand the car back at the end of the agreement unless there was still some equity between the balloon and the car value – which I would still take.

 

Note to the Bank of England: If you ever had fears about the stability of the motor credit industry take a squint on page 40 of the Ford Credit Europe (FCE Bank) accounts 2017. They show total interest income of £647 million less expenses of £181 million leaving a nice little profit of £466 million or 72% of income. So unless I’ve missed something I wouldn’t worry too much. By Graham Hill

I’ve warned about this before but since the tightening of Data Protection rules with GDPR it’s worth mentioning again. It all started a few years ago when the wife of a well-known football player part exchanged her car for a new one. When she sold the car she didn’t think of clearing down the information stored in her in-car telephone book.

 

The dealer who bought the car as a part exchange realised that he could access the telephone numbers and seeing that there were many mobile numbers of A-list celebrities he offered them to a National newspaper. When it came to light what had happened, after journalists were contacting the celebrities, a court case ensued. The dealer argued that as he bought the car he also bought the data stored in the car. The onus was on the previous owner to remove anything that wasn’t included as she would have done with any personal effects.

 

Data protection rules were not so tough at the time but even so the dealer was seen to be breaking data protection regulations and was fined. Since then, of course, the amount of data stored on your car has increased. Addresses, places you have visited along with telephone numbers and in some cases driving style. You may think that most of this information is pretty benign but it may not be.

 

If you own company cars or you are a company car driver there is an onus on the employer to ensure that they protect driver’s personal data. There is a now a company that will cleanse ex-fleet cars and remove all data but they only deal with company cars. If you are concerned about your data stored in your car you can always remove it yourself or ask your local dealer to remove it for you before you return it at the end of your lease or PCP or part exchange it.

 

If the car is part exchanged the dealer is responsible for ensuring that the data is removed before selling it on. With fines of up to 2% of global annual turnover this could end up having a major effect on employers and/or dealers. By Graham Hill