End Of Lease Charges Could Be 30% Higher With PCP Than PCH

Friday, 15. March 2019

One of the fears when taking out either a Personal Contract Purchase (PCP) or Personal Contract Hire (PCH) is the fear of end of lease charges. The Financial Conduct Authority (FCA) issued its report on finance offered by car dealers last week.

 

The report was frankly poor and certainly lacking in content. It concentrated upon the commission taken out by dealers through inflated APR’s but the real problems that consumers face are far wider than overstated APR’s which you can always walk away from.

 

End of lease charges can be unexpected and excessive when you take out a PCP compared to a PCH agreement. Many have taken out a PCP with expectations of buying the car at the end of the agreement only to find that the final balloon payment is much greater than the car is worth.

 

According to themoneysavingexpert.com 80% of cars on PCP are handed back at the end of the agreement. It is only then that they realise the implications. Believing that you will own the car at the end of the agreement you may have the first service at a main dealer but knowing that having the car serviced at any service centre or garage would ensure that the warranty is unaffected you could look to save money and have the car serviced at your local garage. After all you will own the car.

 

However, it’s only when you hand the car back that you realise that there are charges and penalties because you weren’t expecting to do so. And as consumers find out far too late the PCP agreement is very complex with a huge number of vague terms and conditions. For example it will say, ‘the car must be maintained in line with manufacturer’s recommendations’.

 

You may believe this to mean that the car must be serviced every 10,000 miles using either manufacturer’s parts or parts equivalent to manufacturer’s parts. However, the manufacturer’s recommendations will always include: ‘Have the car serviced at a main dealer’. So if you don’t you could end up with a charge. And I’ve seen charges of up to £1,800. I’ve also seen excess mileage charges of 6 pence per mile on PCH but 15 pence per mile on a PCP on the same car.

 

The FCA had a great opportunity to make PCP much more transparent but concentrated on the commission taken by car dealers – sad. By Graham Hill

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Repair Costs Soar As New Technology Is Introduced?

Wednesday, 27. February 2019

According to industry experts, car manufacturers are getting so caught up in the race to launch new technology, they aren’t giving enough thought to, or guidance on, repairability.

 

This is resulting in increased costs and increased time taken in repairs and, in some cases, vehicles being written-off when they should be repairable. Long vehicle off-road times could also have implications for companies and drivers with regard to benefit-in-kind tax.

 

Richard Billyeald, chief technical officer at Thatcham Research, said cars are being brought to market without methods of repair being released. In one instance, repair methods were still not available six months after a car’s launch.

 

“Inevitably there is huge competition in the car market and technology is moving so fast it is in the interests of the car manufacturers to offer new features as quickly as possible. They’re always trying to compete with their rivals but, if there is nobody keeping a check on it, then things like reparability can lose their importance,” he said.

 

Terry Gibson, head of member services at the Independent Garage Association, said it was “not uncommon” for repair methods not to be available from launch, although the issue had been improving over time.

 

However, while it wouldn’t be a major issue for independent garages carrying out simple repairs, it could potentially delay crash repairs where a bodyshop would not proceed without a repair method from the manufacturer.

 

Thatcham wants to put reparability “back on the agenda” this year, starting with tackling “unnecessary” issues, particularly with electric vehicles (EVs), said Billyeald.

 

“You can have a relatively minor parking impact in which you might have done a bit of damage to the bumper or some of the panels –hitting a bollard, for example – and that then trips the fuse in the battery which then requires you to remove the battery and to reset it. Suddenly a £1,000 claim becomes an £8,000 claim – just unnecessary,” he said.

 

The cost of replacing batteries in EVs can also mean that a vehicle becomes uneconomical to repair, although, to put this into perspective the same would undoubtedly be true should a diesel or petrol engine require replacing.

 

Billyeald said that while the battery will not be damaged in every impact, when damage does occur, the battery has to be replaced “in pretty much every case”, unlike a petrol or diesel engine.

 

“It very much depends on whether it is a hybrid or a full EV but the (battery) price range is £6,000 up to £30,000,” he said, the price differential ranging from, for example, a Nissan Leaf to a long-range Tesla.

 

By comparison, it would typically cost between £5,000 and £10,000 to fit a new internal combustion engine (ICE). And in the case of an ICE you could fit a re-conditioned engine.

 

The bigger issue comes with the need to disconnect the battery when carrying out repairs, a situation experienced recently by Zip Water fleet manager Graham Short. In an article by Fleet News he explained, “I had a Volkswagen Golf GTE where the driver caught the wheel arch on a post; it was minor damage,” Short said. “It went into an accident repairer and they said ‘it’s got to go to VW to have the battery disconnected’.

 

We had to book it in with VW, who couldn’t do it for more than a week. The vehicle went in, the battery was disconnected and it was transported back to the bodyshop for the repair to be carried out. Then guess what? It had to be brought back to VW to be reconnected. The car was off the road for about two months just for minor damage.”

 

A Volkswagen spokesperson was “unable to comment” on Short’s experience but said that around 98% of its dealer network can repair an EV and can deactivate the high voltage system, if it’s not damaged.

 

If damaged, this may need the assistance of a specialist from one of 15 retailer-based battery repair sites or Volkswagen’s technical service centre in Milton Keynes.

 

The centres have been set up to complete more complex battery repair methods using the latest diagnostic equipment and highly-skilled Volkswagen technicians (known as high voltage experts). So much for making the servicing and maintenance of cars a level playing field.

 

Volkswagen said that if the batteries are physically damaged then most would need to be replaced but each repair is treated on a case-by-case basis. The spokesperson added that repair methods are available at launch for each new model.

 

Short has also experienced issues with parts availability – a problem which could become more widespread in the event of a no-deal Brexit.

 

“We had a Nissan e-NV200 hit while parked,” Short said. “It was not a big repair, but the van was off the road for a similar length of time because the parts could only be obtained from Japan.”

 

A Nissan spokesperson said: “Supply of parts for EV models is similar to any other ICE vehicle. We can experience pressure points, as do all manufacturers, but we encourage dealers to notify us of cases involving vehicles off the road so they can be prioritised.”

 

On the issue of EV reparability, “every Nissan dealer must be able to diagnose, service and repair electric vehicles”, the spokesperson said, and “depending on the diagnoses, battery functioning can be re-established by replacing individual modules, the battery casing or the entire battery”.

 

Checking EV battery health, meanwhile, is “a straightforward five-minute operation with the Consult diagnostic tool used by Nissan dealers across Europe”. Service and repair manuals are “published at the start of sales and updated regularly as required”, added the spokesperson.

 

While franchised dealers may be geared up to repair electric vehicles, it is “more challenging” for independents and the smaller bodyshops to invest in training and equipment, according to Billyeald.

 

“If they’ve got to buy equipment to cover all the manufacturers that’s a big ask,” he said.

 

This could potentially leave fleet operators with less choice about where their vehicles are repaired – figures from the FN50 show around 23% of leased cars and 33% of leased vans are repaired by independent workshops, which are typically cheaper than franchised dealers.

 

However, Gibson said: “More and more independent garages are embarking on training their technicians to service and repair hybrid and electric vehicles.

 

“This safeguards the business due to the potential risks associated with the high voltages within these vehicles and also presents them with business opportunities, differentiating them from local competitors.”

 

Fleet Assist, which provides leasing and rental companies with a network of 5,000-plus franchised and independent service outlets, said that “virtually all” have the capability to service and repair hybrid and plug-in vehicles.

 

Halfords Autocentres has trained 357 of its 1,500 technicians to IMI Level 2 in electric/hybrid vehicle maintenance, enabling it to service vehicles across its network of 316 autocentres.

 

Pete Marden, fleet director, said: “This training gives our technicians the confidence to work on these types of vehicles and access fault diagnosis to include battery performance via our Bosch KTS equipment.

 

“In July we introduced a new bespoke Halfords Hybrid Service offer to our customers. To date we have completed over 1,600 such services, around 1% of the total number of services over this period. This is above the percentage of penetration of electric vehicles within the market place so is proving a very successful alternative to the OEM dealer network for our customers.

 

“In the next financial year (April 2019 – April 2020) we plan to add the IMI Level 3 award in electric/hybrid vehicle system repair and replacement qualification to our training plans which will give us the added ability to repair these systems.”

 

However, given the relatively low number of hybrid and electric vehicles in the marketplace, a more pressing issue for repairers is that around 55% of new cars now have advanced driver assistance systems (ADAS), such as autonomous emergency braking, fitted as standard.

 

These systems can use a combination of cameras, lasers and radars, which make repairs more complex and expensive, particularly if recalibration is required following an accident.

 

Fleet Assist head of network management Chris Crow said: “There is some marketplace confusion around which ADAS-equipped vehicles self-calibrate following windscreen replacement and which require recalibration.

 

“Automotive glazing is becoming more specialised through the technical nature of glass and many smaller businesses may not have the skillset, the ability to train staff or to invest in the recalibration equipment.

 

“That is resulting in a disconnect between glass fitment and the subsequent technical requirement for ADAS recalibration.

 

“In turn, that lack of clarity may lead to some fleets/drivers being confused as to when and where a vehicle should be recalibrated as some automotive glazing repairers have the capability to undertake the work, while others defer to franchised dealers. That could also result in a potential delay in the necessary work being undertaken as, once again, lead times have, in some cases, increased.”

 

Developments in headlight technology are also having an impact as they often have to be replaced rather than repaired when damaged.

 

Billyeald believes the increase in cost due to manufacturers moving from halogen to xenon technology a few years ago was “not unreasonable” but the recent proliferation of LED technology has made headlights “super expensive to replace”, particularly when matrix headlights, which dynamically move with the steering, are used.

 

“They give you fantastic visibility but, obviously, there are lots of moving parts and the costs are going up in line with that,” he said.

“We’ve seen huge price rises from £100 to a few thousand.”

This presents challenges for leasing companies and their customers.

 

Kit Wisdom, operations director at Tusker, told delegates at the BVRLA Industry Outlook event: “The broken headlamp at the end of contract could be £1,000-plus. The customer is not expecting that because that’s not what they’ve seen previously and, as an industry, we need to be better at communicating that.”

 

Jason King, managing director of Bayfield Vehicle Hire, added: “Low-level damage can spiral out of control. Something as simple as a chip in a windscreen can escalate to an £800 bill. We’re trying to understand ourselves why that is the case and then communicate that back to the customer.”

 

But it’s not just the technology in vehicles making repairs more difficult and expensive, it’s also the materials and joining techniques used by manufacturers as they strive to make vehicles lighter to meet strict emissions regulations.

 

Smart repairs can also be a contentious issue. Car manufacturers, in Billyeald’s view, can be “unreasonable” about where smart repairs are carried out on a vehicle fitted with sensors, which, again, can increase repair costs.

 

“We will be challenging vehicle manufacturers on that,” he said.

Gibson added: “There are instances where the vehicle manufacturers set limits on the type and areas of repair on bumpers to ensure safety systems continue to function as intended. This, on occasion, can lead to debate between garages and insurers, and garages and customers, due to the increased cost of having to replace a component that might otherwise have been a repairable proposition.”

 

Overall, repair bills rose 5% to £3 billion last year, with the average repair bill at £2,137, according to the latest data from the Association of British Insurers.

 

Costs are expected to increase further – the BVRLA Industry Outlook 2019 report predicts an average repair bill of £2,500, although some say it could be higher.

 

Tim Bailey, fleet director of Northgate Vehicle Hire, who worked in accident management prior to joining Northgate in March last year, said he was already seeing average costs of £2,500 and predicted it would “grow even higher than that” this year. He also expects more vehicle write-offs.

However, fleets should consider that, while repair costs are rising, they should see fewer crashes due to ADAS.

 

Billyeald said: “ADAS is all about preventing that crash or mitigating its impact so don’t just look at the cost, look at the overall picture – the number of write-offs and frequency of claims as well as the cost of them.”

 

Bayfield Vehicle Hire has already experienced the cost and safety benefits of ADAS.

 

King said: “We had one incident last year where one of our cars went into the back of an HGV. We thought the car would be written off, a total loss, and wondered how injured the passenger would be.

 

“But when we got in touch with the driver the passenger was all right and when we saw the vehicle it wasn’t too bad. That was partly down to the technology in the vehicle, the pre-collision braking had kicked in and taken over that situation. It could have easily been a total loss.”

 

BIK REDUCES WHEN CAR NOT AVAILABLE

Fleet managers need to keep a close eye on how many days a vehicle is off the road for BIK tax.

 

HMRC rules state that if a car is unavailable/off the road being repaired for a period of at least 30 consecutive days the chargeable benefit is reduced in proportion to the number of days during the year it was unavailable.

 

However, if the driver is in a courtesy car then BIK is charged as though their normal car was available without a reduction. The BIK charge may be adjusted where the replacement car is materially better than the normal car or the employee is provided with a better car under an arrangement.

 

Many thanks to Fleet News for the bulk of that article and the frightening warnings issued by the contributors. The dangers and cost to consumers and businesses is frightening. At the moment end of lease charges are not particularly high but the warning signs are there. Are we being overtaken by technology at the risk of making our cars far more disposable? Or leading to the bad old days of cut and shut, bodging repairs and putting lives in danger? Very sobering.

 

Graham Hill

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Shocking Revelations About Diesel Cars!

Wednesday, 27. February 2019

Latest testing that has been carried out by German automobile club ADAC has shown that some diesel cars emit almost no NOx, during on-road testing – suggesting the latest models are as clean, if not cleaner than their petrol counterparts.

 

So has this been a conspiracy all along? A way for local authorities and the Government to screw diesel car drivers out of money after following Government advice and taking a diesel car then taxing them to the hilt based on flawed information?

 

In fact the latest diesel engines emit significantly less nitrous oxide (NOx) than the upcoming Real Driving Emissions 2 (RDE2) regulations will require, according to this new research.

 

Following stringent testing by ADAC they have discovered that some diesel cars emit almost no NOx, during their on-road testing – suggesting the latest models are not just as clean as their petrol counterparts – but cleaner!.

 

In January 2020, tougher RDE2 rules will be introduced, requiring all new models (not existing models) launched to achieve 80mg/km or less (60mg/km for petrol). This will be a part of Euro 6d.

 

A conformity factor for the on-road test will be allowed, meaning the actual limit is 114mg/km for diesels and 86mg/km for petrols – significantly higher than any of the vehicles tested by ADAC.

 

In January 2021, all cars sold (including current models) must achieve the more stringent figures. The conformity factor will be removed by 2023.

 

Current rules (RDE) require diesel cars to emit no more than 168mg/km of NOx, but the worst performing car tested by ADAC – the Honda Civic diesel – emitted just 101mg/km. Following the WLTP re-homologation exercise that took place in 2018, the introduction of RDE2 will require all car makers to re-test their entire model ranges with an on-road test.

 

Nearly all the cars tested by ADAC emitted less than 50mg/km and the Mercedes C220d had no NOx emissions at all. The Volkswagen Golf diesel performed exactly the same as the petrol version, emitting 14mg/km of NOx. The best performing petrol car, a Suzuki Ignis 1.2, emitted 3mg/km.

 

ADAC performed the tests using a portable emissions measurement device (PEMS), in the same way as the official test. Under the current company car tax rules, diesel vehicles that achieve RDE2 will not require the 4% diesel surcharge to be included in a drivers benefit-in-kind tax.

 

Currently, only the Mercedes A220d and B200d have been officially tested and approved under the regulations. Jaguar has confirmed that the XF range will feature RDE2 approved engines by the end of the year.

 

Diesel car NOx emissions, as tested by ADAC:

Model RDE: NO x
in mg / km
Audi A8 50 TDI 15
BMW 520d Steptronic 5
BMW 520d Touring 1
BMW X2 xDrive 20d 23
Citroen Berlingo BlueHDI 130 7
Honda Civic 1.6 i-DTEC 101
Kia Ceed 1.6 CRDi 22
Mercedes A 180 d 40
Mercedes C 220 d 0
Opel Astra 1.6 D 1
Peugeot 308 SW BlueHDi 180 30
Volvo XC60 D5 AWD 56
VW Golf 1.6 TDI SCR 14

 

Petrol car NOx emissions, as tested by ADAC:

Model RDE: NO x
in mg / km
BMW 218i Active Tourer 8
BMW 230i Coupe 10
Hyundai i20 1.0 T-GDI 4
Kia Ceed 1.4 T-GDI 10
Mercedes-Benz A 200 DCT 9
Renault Megane TCe140 15
Suzuki Ignis 1.2 3
Suzuki Swift 1.2 AWD 4
Suzuki Swift Sport 1.4 9
Volvo XC40 T5 AWD AT8 9
VW Golf 1.5 TSI 14
VW Golf 1.5 TSI BM DSG 4
VW up! GTI 9

 

No doubt like me when I learned of the German tests I found it shocking. How many company car drivers are paying more in BIK tax than they should be and how many people are turning to petrol cars kicking out ozone destroying CO2 in the belief that they are better for the environment?

 

It’s a disgrace! By Graham Hill

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GH Calls For Changes In Law Regarding Car Recalls

Saturday, 16. February 2019

I’ve mentioned the level of recalls that haven’t been carried out on many occasions but nothing seems to have been done to sort it out. Not all are critical so it’s worth explaining again the three levels of recall. The most dangerous is a ‘Stop Drive Recall’.

 

This is very rare and described as the equivalent to an aircraft being grounded That’s the official line but we’ve seen many instances of cars catching light and the manufacturers dragging their heels over a recall and even then not issuing a ‘Stop Drive Recall’.

 

The second and most common level is a ‘Safety Recall’. The line from the DVSA here is: ‘where a vehicle or component is deemed by our engineers, usually along with the manufacturers’ engineers, to present some safety risks’. Drivers can continue to use cars affected by a Safety Recall while waiting for the issue to be fixed – “Unless informed otherwise,” Neil Barlow of the DVSA explained.

 

The third level is less critical. The DVSA is sometimes involved in ‘non-code actions’ and ‘service campaigns’, where it will assist manufacturers in contacting owners regarding defects that do not present a serious safety risk.

 

The problem is that a large number of recalls remain outstanding which can put drivers, passengers and other road users’ lives at risk. It’s a disgrace. There are some that have suggested that recalls should be part of the MOT test and if there is an outstanding recall the car should fail. That’s fine but the first MOT isn’t due for 3 years so what happens in the meantime? I would suggest that recalls should be checked by those carrying out services.

 

At least there will be some checks before the car gets to 3 years old or possibly the road fund licence should be withheld if there is a recall outstanding. The reason why I’m raising this again is that BMW has just announced a recall on 1.6 million diesel cars that include 268,000 cars affected in the UK.

 

The risk is of fire as a result of the exhaust gas recirculation (EGR) system leaking coolant. In combination with the high temperatures present in the EGR module, this can result in smouldering soot particles. In turn, this could lead to a fire – in very rare cases.

 

The cars affected are 3 Series, 5 Series, saloon and estate, 4 Series and 6 Series Coupe’s and convertibles. The problem is that many of these cars won’t be taken to a dealer for the recall, either because the car has changed hands and the DVSA has failed to reach the new driver, or drivers have ignored the notice.

 

There could be other reasons but this should not stop the lawmakers making it an offence to continue to drive a car that could cause an accident. New laws are needed to make drivers more responsible when it comes to safety recalls. You can check to see if your car is subject to a recall by clicking this link: www.check-mot.service.gov.uk By Graham Hill

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Could Your Car Report You For Drunk Driving In The Future?

Sunday, 3. February 2019

Yes you read that correctly, your car could report you for being in charge of your car whilst intoxicated. We’re not talking about normal cars we’re talking about autonomous cars (driverless). This raises a couple of questions, the first is a major misunderstanding about autonomous cars.

 

I went into detail in a previous report so I won’t repeat myself about ‘drivers’ of autonomous cars but basically if you are one of those that thinks that in a few years time you’ll be able to jump unto your driverless car, go down the pub or club and get absolutely legless then get in the car and tell it to take you home – you’re badly mistaken.

 

If you are in charge of an autonomous car you will need to be as sober as the driver of a normal car. So that’s possibly messed up your plans of being in a state of permanent inebriation.

 

The next question is how and is this big brother gone mad? The how is a patent filed by Huawei on a system that measures sobriety of an autonomous vehicle’s occupants. According to Auto Express the system consists of a number of sensors and processors that monitor the condition of the driver, checking to see if they are in a fit state to take over the manual controls of the car in an emergency?

 

If the system detects that the driver is drunk, it could issue a warning, deactivate the car, or even inform the police. The system not only detects drunkenness the patent describes the car detecting if suspicious items such as weapons or drugs are on board and if the driver is driving whilst using a mobile device (really? One would have thought that if the car can drive itself it would have Bluetooth fitted). It can also sense tiredness.

 

This is the first time that engineers have considered the possibility of using technology to report drivers for offences. Alongside this development, it was reported last year that autonomous police cars of the future could be mini courtrooms. They would be kitted out to test drivers for alcohol and drugs and scan for weapons. Sentences would be delivered by videolink and offenders autonomously delivered to jail.

 

The theory behind this is that Bobbies could return to the beat whilst the new cars increased the prosecution rate by removing the courts from the system. Makes you wonder where this is all taking us? By Graham Hill

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Is Our Consumer Credit Legislation Fit For Purpose – I Think Not!

Wednesday, 23. January 2019

This year I’m on a campaign to change our consumer credit laws, especially in the areas of motor finance. We have two products that account for the vast majority of new car finance, contract hire and Personal Contract Purchase (PCP). Contract hire accounts for about 85% of company acquisitions whilst Personal Contract Hire (PCH) is now starting to take market share away from PCP which has recently dropped from 85% of consumer new car registrations to 80% in 2018.
However, PCP is now being used by more people to finance used cars, estimated to increase the number of live PCP contracts to around 5 million. The point is that we have two major finance products that are fudged in legal terms. Legally there are no such products as PCP or PCH even though they represent the largest number of agreements.
Take out a Hire Purchase agreement or personal loan agreement and you are pretty much covered for all eventualities by the UK laws that govern them. But take out a PCP or PCH and you are referred to the Consumer Credit Act which was never set up with Contract Hire or Contact Purchase in mind. This means that the providers can pretty much include any terms they like into the contract without fear that they are breaking any laws.
 
Look at the top of a PCP agreement and it will show it as a Hire Purchase Agreement – which it isn’t, it’s a Hire Purchase agreement with a load of conditions. The same with PCH, it will show it on the documents as a Hire Agreement Regulated by The Consumer Credit Act 1974, at a time when PCH didn’t exist. So each finance providers cave pretty much free reign to include any terms and conditions the see fit to include. 
 
Two examples of confusing situations come to mind which cause all sorts of problems with consumers. The first is one that relates to PCP and what is known as Voluntary Termination (VT) which is the ability under clauses 99 and 100 of the Consumer Credit Act to hand your car back once you have paid 50% of the total owed.
The problem here is that the lenders don’t like it because it can lead to losses, especially if the car has covered very high mileage. As an example say you VT’d the car after 2 years of a three year contract. Your contract mileage was 10,000 per annum so you should have only covered 20,000 after 2 years but let’s say you covered 28,000 miles. Your excess mileage is 10 pence per mile so you should be charged a pro-rata excess mileage figure of 8,000 miles at  say 10 pence + VAT = £960.
 
This is the argument put forward by lenders. In fact this is incorrect and flies in the face of the Consumer Credit Act that was created before such things as excess mileage. So the law states that you can hand the car back to the lender irrespective of the mileage. However, when Renault pushed for payment from a customer and the Financial Ombudsman Service got involved they found in favour of Renault. It would be so easy to include a few changes to current legislation or introduce new legislation that dealt with PCP and set down a rule. It would save lots of confusion.
 
The issue that comes to mind with PCH is the extension of contracts. Every leasing company that allows for an extension (not all do) have a different way of calculating the lease extension rentals, which is wrong. There should be a standard method to remove confusion and make the extension transparent. I have a case against Mercedes Benz who increased my monthly payments by 20% for an extension even though my mileage was running at much less than my contracted mileage. Laws should make life less complicated – not more!
 
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By Graham Hill

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Personal Contract Hire (PCH) vs Personal Contract Purchase (PCP)

Friday, 18. January 2019

I’ve already opened this week’s email with some of my views on the legal implications but aside from those PCH is definitely gaining traction. It took quite a while for consumers to get their heads around PCP with the idea of either handing their car back to the finance company, buying it or using it as a part exchange. With over 5 million live PCP contracts running it is clear that people are getting it.

 

However, of those who took out PCP’s on new cars, not willing to consider any other alternative because they still had the option to buy the car at the end of the lease if they wanted to, they then felt that they were misled by the dealer. They believed that there would be some equity in the car at the end of the agreement which could be used as part of the deposit on the replacement car. In many cases drivers have ended up giving back the car to the finance company because the car wasn’t worth the balloon payment let alone providing some equity.

 

In fact according to themoneysavingexpert.com 80% of those who take out a PCP hand the car back at the end of the agreement. So having had that experience they then realise that they could have saved a considerable amount of money by taking out PCH with no option to purchase. So whilst PCP looked great on paper it isn’t surprising that there has been a massive growth in PCH over the last 12 months whilst PCP has dropped for the first time ever.

 

I will be explaining much more over the coming weeks so watch this space as I reveal some of the closely held secrets of the industry. By Graham Hill

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New Car Sales Down In 2018 But Not Disastrous

Friday, 18. January 2019

The usual headlines appeared as soon as the new car sales figures were announced. Headlines such as New Car Sales Fall Off A Cliff made it seem like new car sales had dropped by 50% from the previous year. They didn’t, the drop was 7% or 100,000 cars dropping from just over 2.5 million in 2017 to just under 2.4 million in 2018. So not the disaster that reports would have you believe.

 

With an average of 200,000 new cars being registered every month keeping us in second place to Germany in the EU is hardly a major disaster. Believe it or not Jaguar increased by 4% but then their problems, along with their sister marque, LandRover have suffered from a drop in demand in China, the US and Middle East.

 

It seems that the main drops were amongst the volume producers such as Ford, Vauxhall, Nissan and Audi. Changes to the emissions regulations threw a massive spanner in the works. Manufacturing slowed as some manufacturers struggled to meet the emissions levels with some stopping production altogether. Then having sold off all the pre-emissions tests cars there were no new cars in stock to sell so drivers either extended current agreements or took on a used car.

 

So my feeling, given the circumstances is that new car sales in 2018 were pretty buoyant. My real concern was over alternative fuels. But first a few words about diesel cars. 62% of new cars bought in 2018 were pure petrol cars compared to 32% pure diesel. You may think this is a good thing given the reports about emissions and the need to get diesel cars off our roads. The fact is that it is old diesel cars that we need to get off the road. New diesels are virtually particulate (soot) free and whilst NOx emissions are a little higher CO2 emissions are lower so in terms of damage there is very little to choose.

 

The question that never seems to be raised is that of mileage. Clearly, if people drove their cars less they would reduce emissions irrespective of the fuel used. The sad news is that just 5% of new cars registered in 2018 were either diesel/electric or petrol/electric hybrids. And even worse for the environment was that just 0.7% were pure electric cars. This of course wasn’t helped by the Government removing the grants completely from hybrid cars and reducing those on electric cars.

 

The car industry was in good shape last year but the move towards a better environment is flagging badly! Something needs to be done and the Government needs to give better direction to diesel/petrol drivers as we are about to see warnings in the press again about the Ozone layer as a result of the increase in petrol car drivers increasing CO2 emissions. By Graham Hill

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Brexit – Throwing The Baby Out With The Bath Water

Friday, 18. January 2019

Before you think I’m getting all political – I’m not. I’m talking about one of the major successes of EU membership and that is safety systems on cars. Across the whole of the EU safety standards have been set to protect drivers, passengers and other road users – very successfully. But will this still be the case after Brexit when we take over the rules and regulations ourselves?

 

My hope is that we will continue to maintain the high standards that, like many EU laws, we were responsible for in the first place. If you drove around Spain or Italy in the 70’s and 80’s you would have taken yours and everyone else’s lives around you in your hands the moment you got behind the wheel.

 

But with the introduction of consistency throughout Europe when it comes to car safety you can feel relatively safe in every country you drive in. But will this apply moving forward? There have been times when the UK manufacturers have questioned some of the enforced safety features imposed upon us by the EU but will that mean that there will be two levels of safety applied when we build cars in the UK?

 

Safety costs money so if the car manufacturers can save money – will they do so, especially if the safety feature doesn’t count towards the global NCAP safety tests. If we export to Europe we will need to meet the EU standards but will they apply in the UK especially as we are more and more price driven? As an example take the Indian car market where above all else cost is the main factor followed by cost to run, mileage and performance.

 

Safety is way down the list of priorities so manufacturers manufacture to meet the needs. And that includes European manufacturers. In a recent case a VW Polo was reported to be given 0 stars on the global NCAP test without it affecting sales. I believe they improved the safety of the cars and as a result achieved a higher score but that was a good case of car manufacturers meeting demand. In the UK Polos achieve either 4 or 5 NCAP safety stars.

 

By removing ourselves from Europe I sincerely hope that we don’t remove ourselves from some of the good things they were responsible for. I wouldn’t like to think that it would be safer to drive a new car in Europe than in the UK. By Graham Hill

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Your Airbag Could Fire Shrapnel In Your Face!

Friday, 11. January 2019

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

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