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Things in the world of motoring are completely unbalanced when I find myself agreeing, more than once in a decade, with commentator Mike Rutherford. Not only that and just to show that I think about my blog, this item follows on from the last entry explaining that we are suffering a terrible underspend in our roads infrastructure in Britain.

As Mike points out we are around number 70 in the list of countries around the world when it comes to miles of road per capita. In this country, we have around 67 million inhabitants with a road network of jus 263,000 miles. In France, they have 66 million inhabitants with an eye-watering 640,000 miles of roads.

No wonder we spend disproportionate amounts of time sitting in traffic queues! Even Italy with a population of 61 million inhabitants has more miles of roads than us at 300,000. It’s an absolute disgrace that successive Governments have disregarded our roads.

Traffic jams cause increased pollution, make travel times longer and use more fuel but even worse is the way that it makes us all less efficient. The Government has expressed concerns about our efficiency but part of the problem is our road infrastructure. We can’t be doing anything if we are sitting in traffic for hours on end.

Getting back to the statistics, Spain has a population of 47 million with 424,000 miles of roads. Even Scandinavia with a population of just 10  million Swedes has created 330,000 miles of roads. 5 million Finns had a massive 282,000 miles of roads to speed along – that’s a population of 90% less than us with more miles of road than GB.

Australia with a bigger area but fewer inhabitants than GB has 500,000 miles of roads. Finally the US with a population of 328 million has 4.4 million miles of roads. As Mike points out this situation is not only a disgrace it is becoming a joke and extremely embarrassing. We are so bad we are behind Namibia and Estonia.

Now whilst some of the roads aren’t of the highest quality in some countries and some roads are pavementless we are lagging behind most other sophisticated countries buy a large margin. It can take years just to build a few miles of motorway so we really need to get our fingers out now and agree some heavy spending on our roads infrastructure or run the risk of the whole country grinding to a stop.  By Graham Hill

OK, I have this great new way of charging you for the electricity that you use. In future, you will be assessed by the amount of hot water you use per annum. The more hot water you use the more you will pay for your electricity. As a result, the Government will expect you to use less water and less electricity to heat the water. Makes sense?

Probably a bit of a silly example but the point is that linking the two items doesn’t seem like an obvious way for you to pay for your electricity. You pay for electricity as you use it – seems like a bloody obvious thing to do! So what’s this got to do with cars?

Well, a lot of what we spend on roads and the roads infrastructure is collected in various taxes. First Registration, Road Fund Licence and Fuel Excise Duties being the three main ones that come to mind (congestion charging, scaled parking charges are others). So how do we work out the charge? We charge based on CO2 emissions! No allowance for other emissions just CO2.

It just doesn’t make sense and even with the CO2 emissions, it’s simply assessed on how much comes out of the exhaust pipe over a kilometre. I might be travelling just 5,000 miles a year in a relatively high CO2 emitting vehicle but still pay more in RFL than someone travelling 40,000 miles a year in a car with CO2 emissions that are slightly lower. Again – makes no sense! What does make sense is charging per mile for the use of our roads – a bit like using electricity!

And that is what will have to be considered if we move over to either very low emission hybrids or zero-emission electric cars. To leave things as they are will mean drivers will pay nothing towards the upkeep of our roads infrastructure. So the first out of the blocks is the Republic of Ireland, working on a scheme whereby drivers pay to use roads by the mile in order to fill what could potentially be a fairly large black hole in the finances.

Our government is keeping an eye on what the Irish are proposing, to see if theirs is a model we should copy.  Transport Secretary, Chris Grayling, announced earlier this year that whilst he acknowledged that many people felt that pay per mile was the way forward he had no immediate plans to change from the current method of funding our roads.

Unfortunately rather short sighted! Having said that I’m not sure how we would go about collecting the data and making the charges on motorists. By Graham Hill

Probably the most common question asked at the moment without a simple answer. Most lenders will extend their leases these days so the option is there. Most will ask for your current mileage then calculate the extension based on your contract mileage, your average mileage or they may ask what mileage you will cover over the extension period.

In most cases we are seeing an increase in monthly cost so be prepared to pay either the same as you are currently paying or an increase. Some will offer a casual extension whilst others a fixed period extension of 3, 6 or 12 months – or all. The casual extension means that you continue to pay for the car until such times as you no longer need it.

This is particularly useful if you can’t coordinate the collection of the old car with the delivery of the new car or if the delivery of the new car has been delayed. This can often be the most expensive method so expect to pay 20 – 25% more than you are currently paying per month.

A fixed extension may possibly see a reduction in rental, especially if you are under mileage. You will need to contact either the funder or if you have an agreement through me we can sometimes organise this for you. You will receive a quote and from that decide what period you would like to extend for.

This now brings us to the next very vexing question – should you extend simply because you can’t find a suitable car on an acceptable rate or, if you were to replace your current car with exactly the same car, the rate is currently substantially more? Either way, should you extend in the hope that the rates will reduce in the future? And if you do that how long should you extend for?

We are now in very turbulent times. The industry faces two main challenges. Real world emissions tests and Brexit. With regard to the first challenge the old test procedures (NEDC) and standards have been dumped to be replaced by the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).

The tests are still carried out in laboratory conditions but now take twice as long under tighter scrutiny as a result of cars being tested under NEDC test conditions previously being capable of being ‘fixed’. I’ll mention no names  but VW. Manufacturers have had to carry out substantial design and production modifications in order to make their new and existing models compliant with Euro emissions regulations which has and will increase the cost of new vehicles.

Since September last year till the end of August this year (2018) current models tested under the old NEDC procedures could still be sold but if they remained unsold at the end of August could be forcibly scrapped. As a result, some big discounts have been given away to sell the cars before getting to the point where they had to be scrapped or pre-registered. There has been a little relaxation of the rules whereby a small % of annual sales, if remaining in stock at the end of August, could still be sold in September.

The WLTP tests included options fitted to the car. As we know if a car is fitted with bigger wheels it increases the drag coefficient and, in turn, increases fuel consumption whilst also increasing emissions. The next phase of testing that starts from September 2018 is Real Driving Emissions testing (RDE). This entails the connection of measuring equipment to the car on test and driving it on public roads, measuring the real results, then comparing them to the results achieved in the WLTP tests.

All of this is costing money and could be increasing the cost of new cars as well as delaying deliveries. Land Rover shut down its order book for 3 months and I’m hearing that low sales, because of lack of cars and not so keen finance deals, has resulted in dealerships facing closure. So these uncertain times are causing rates to be very unstable.

We then have Brexit.  On the 29^th March 2019 we officially leave the EU with many suggesting that we could well leave without a deal which means we fall back on WTO rules. The effect of this has been an estimated increase in car costs of 10% or an average increase per car of £2,400. Unknown by many is the level of discount we currently enjoy when we lease our cars.

Some have discounts of up to 45% factored into the rental rates. So one could argue that with so much fat to play with, will we see any major change in the rentals? This brings me to the crucial question, If the rates aren’t where you would like them to be when changing your car now, should you extend your agreement in the hope that you will achieve a better deal in a year’s time?

This is pretty much an impossible question to answer. The real answer could lie in attitude! For years we have been the only European country to embrace leasing as an option to fund cars both personally and through businesses. This has resulted in a lot of ‘dumping’ of cars into the UK for them to be leased.

The beauty of leasing is that the price paid by the leasing companies for their cars don’t affect the price of used cars on dealership forecourts. So manufacturers have used this to move cars that are on run out and even, on occasions, new models that aren’t selling well to put more cars on the road to give the impression that the cars are popular.

As an example, I won’t give makes and models, but some £22,000 (retail cost) cars were offered to me at £11,750 prepared and delivered anywhere in the UK by a main dealer as long as they were only supplied on contract hire. This discount made the cars very cheap to rent on contract hire but the good news for dealers was that by supplying new cars on say £170 + VAT per month lease deals it didn’t affect 12-month-old used cars on their forecourt for £17,000. Imagine what would happen to their used cars if the new cars were offered for cash at £11,750?

So the fact is that we could do without the increase in costs due to no deal being struck. In addition, we are already seeing attempts by manufacturers and leasing companies to push their finance products throughout Europe which will divert extra discounts away from the UK, increasing the pain further as more European countries take on leasing as a product.

So whilst we are so unsure about the future my advice has to be to consider the worst case and if there is anything available that is on an attractive deal at the moment snap it up – even if the car isn’t your first choice. Mine and the feeling of the industry is that we will have to go through some pain, certainly in the short term, that could put the replacement cost of like for like cars well beyond their current rates.

Extend for 12 months and you may see rates through the roof but if you take out a new 3 year lease I’m hopeful that things would have stabilised by the end of the 3 year lease period. But what do I know?

When I was a kid if you saw a label or stamp on anything that said – Made In Japan you would assume that it was cheap and cheerful, not meant to last for much more than a day or two. Oh how times have changed, the country boasts car manufacturers such as the massive Toyota, Nissan, Honda and Suzuki. Electronics masters such as Sony and Panasonic and the highly regarded premium tyre manufacturer – Bridgestone – all made in Japan.

So could we see a similar change in attitude towards China? Currently European and car manufacturers from around the world cannot keep up with China’s demand for cars, last year 28.8 million new cars were sold there. So high has been demand that major manufacturers have actually built plants over there and now manufacture in China. In fact, 1 in 4 cars made globally were built in China but to meet internal demand.

However, this growth will eventually start to slow down leaving manufacturing capacity in the factories. With the relatively low cost of labour and raw materials VW is just one company that sees opportunities to manufacture European spec. cars in China and export around the world. They are even suggesting that other countries may be interested in buying Chinese spec. cars. Maybe India and Africa where safety rules are not so stringent.

Jaguar Landrover have similar views. They aren’t looking into this in the short term as the internal demand is so high but further down the line it is very feasible that China could be exporting cars around the world with a variety of badges on the front of the car.

So watch out – the Chinese could be coming sooner than you think! By Graham Hill

Whilst the Government appears to be concentrating on the big issues such as free trade, immigration, security etc. work is still being done on the detail. Auto Express has been asking experts about some of the areas that are worrying Brits travelling abroad.

The first area of concern is driving licences. Will we need a special licence to enable Brits to drive in the EU? Some leaked EU presentation slides suggested that UK licences would no longer be recognised across the EU Bloc. Lawyer, Laura Newton who specialises in motoring and transport, for Rothera Sharp said that this is unlikely.

She believes that the UK driving licence will continue to be acceptable across the EU without additional paperwork required. As she pointed out the UK driving licence is already acceptable outside the EU in Commonwealth countries such as Australia as well as China and the USA where you can use your UK licence for 6 months before it has to be re-issued.

With that system working perfectly well Laura believes that there is no reason why the scheme could not continue post-Brexit. Expecting every driver to apply for an International Driving Licence to permit drivers to drive in each EU country would simply not be desirable or make sense. Added to this is the fact that we will be embedding EU law into UK laws post-Brexit, as they are at the moment, even from a legal viewpoint there is no reason to introduce additional controls.

Even if the UK wants to change or introduce new laws it is estimated that it will take 10-15 years with any changes most likely to be technology related – say automated or driverless cars rather than changes to existing motoring laws. So it’s unlikely that there will be too many arguments against allowing us to use our GB licences in Europe.

The next issue was car safety, would being outside the EU have an effect on safety standards applied to new cars? Well according to the secretary general of the Global New Car Assesment Programme (Global NCAP), David Ward, it will render the UK a ‘Second-hand Dealer’ in car safety. I’m not sure what he meant by that but he went on to say that Brexit meant withdrawing from a complex eco-system of vehicle regulation’, with the UK’s influence in vehicle safety diminishing. Not sure about that either but it looks pretty bad!

On the other hand Matthew Avery who is director of research at Thatcham Research assured us by saying that Brexit won’t reduce vehicle safety because the UK is a signatory to the UN type approval agreement which is the main process governing vehicle safety. He explained to Auto Express, ‘It has almost identical test procedures to those in the EC.’ ‘So even when we leave, our vehicles will still be aligned to the rest of Europe.’

In purely practical terms it wouldn’t make sense to have our own set of safety standards with so many of our cars being sold in Europe and vice-versa. Future EC directives, such as the proposed mandatory fitment of new tech such as autonomous emergency braking are likely to be adopted by the UK anyway. It wouldn’t make sense to have different designs for different countries. Thatcham, at the forefront of safety in the UK, will continue to be a member of the voluntary programme, Euro NCAP whilst possibly setting the bar higher putting pressure on manufacturers to achieve a new UK five star rating.

As was pointed out we don’t have to be a member of the EC to be a member of Euro NCAP. So Brexit will have no effect. Although, not being a member state when safety is being discussed by the remaining members, means that we will no longer carry the same weight as we did as a leading safety member of the EU influencing decisions.

What will happen to car insurance? As it currently stands all UK motorists have basic insurance cover while driving through EC member countries. The question is will Brits have to pay for extra cover if they drive around various EU countries post Brexit? Initially, it was felt by the Association of British Insurers (ABI), that motorists would need to revert to the old ‘Green Card’ system, whereby they had to apply for and pay for a special cover note before travelling to the continent. However, Ben Howarth, ABI’s senior policy advisor, motor and liability, said the paperwork would not be necessary.

The Government has made it clear that it wants to keep us within the Motor Insurance ‘Free Circulation Zone’. He explained that this would mean that drivers and hauliers should not have to pay for Green Card documentation from insurers when they travel in EU member states after Brexit. Apparently, this is a significant development, and once the Commission has agreed it, which is expected, it means that drivers, haulage operators and insurers will not face the considerable administrative disruption associated with the issuing of Green cards and also avoid border checks.

The ABI advises that drivers check their policies post Brexit as they may not carry the same level of cover that they are forced to carry whilst part of the EU. What is it they say? The devil is in the detail – and so it is with Brexit! By Graham Hill

I was reading a report prepared by road safety charity Brake, about the mental health of company car drivers the other day. The report was rather worrying because it was calling for companies to up their game in this area and identify earlier mental health problems that could affect their drivers.

However, as I read the report I started to think that this situation affects all drivers not just company car drivers so whilst companies could have checks in place, what checks are there when it comes to non-company car or business drivers? The report points out that whilst a happy driver with a positive attitude is not necessarily a safer driver, nor does it mean that a driver with mental issues will not make a perfectly good driver but psychologists have shown that poor attitude and a negative state of mind can adversely affect driver safety.

There is also little information regarding the state of a driver’s mind following an accident. So when an accident occurred as a result of a car going out of control the blame is often put down to tiredness or distraction rather than a sudden attack of depression. This can take the driver into a very dark place leading to suicidal thoughts. And this is worrying.

Companies have and will encourage employees to talk about mental issues which still carries a stigma. Brake wants companies to take this further and in the same way that businesses ensure that their vehicles are properly maintained and roadworthy similar checks on their drivers should also be put in place with drivers’ mental health assessed.

In a response reported in Business Car, Alison Moriarty, road risk and compliance manager for Skanska agreed with the views expressed by Brake but added potentially risky conditions for drivers which included depression, that could make them unconcerned for their own and others’ safety, and anxiety, which could cause sufferers to experience periods of unintended helplessness close to a state of paralysis – potentially dangerous when drivers may need to take split-second decisions to avoid a crash.

A string of recommendations was made to make it easier for employees to discuss mental problems and the importance for businesses to understand and react to the issues when identified. All good news which will hopefully make driving safer but the same checks and balances should also be applied to non-business drivers. Whilst it is believed that business drivers spend more time alone with little interaction with others with whom they can discuss their feelings the same must apply to those who don’t drive as part of their job.

I find it all very worrying. Maybe crashes need more investigation into the mental health of those involved and in-car telematics could be used to check for erratic behaviour. More certainly needs to be done in this area until all cars become driverless. By Graham Hill

As you know, if you read my newsletters, you will know that phase 1 of the exercise has been underway for nearly 12 months. Worldwide harmonised Light vehicles Test Procedures (WLTP) were introduced last September. After the 1^st September this year the same Euro 6 rules will apply to all vehicles but only vehicles that have been tested under the new WLTP rules and meet the Euro6 requirements can be sold.

This means that some cars that have only been tested under the old NEDC test procedures can no longer be registered. This meant that we expected a massive surge in the pre-registration and sale of the old model tested cars – it hasn’t happened. The manufacturers and dealers have been canny enough to make sure they weren’t carrying lots of old tested cars and vans meaning that they haven’t been applying massive bonuses as some expected them to do – me included!

Now bear with me because it gets a little confusing. The easy bit concerns the brand new model cars, let’s call them 2019 model cars. They have been re-designed to receive the approval so the CO2 and mpg figures are now more accurate and as a company car driver you will pay benefit in kind tax per the latest CO2 readings.

If you are driving a pre WLTP car they will still be tested and the new CO2 figures declared which, in most cases, are higher than the old NEDC figures. So to avoid sudden increases in BIK tax the revenue came up with a formula to apply to the new figures that will take the readings back to roughly where the old NEDC figures stood, known as the NEDC correlated figures. This will last till 2020.

The complication gets worse when the Real Driving Emissions test (RDE) is introduced from 1^st September. This involves equipment attached to new cars to measure emissions and mpg in real world driving conditions as opposed to the WLTP tests which are carried out in laboratory conditions. At the moment the Government has neglected to explain how the RDE tests fit in with the WLTP tests when it comes to all areas of vehicle-related taxation between now and 2020. In fact they haven’t released details relating to taxation post 2020 so anyone looking to take out a lease for a business car could be in for a shock when they receive their tax bill. It’s a disgrace! By Graham Hill

They are coming! In a survey carried out by the British Vehicle Rental and Leasing Association (BVRLA), they found that 40% of small and medium-sized companies were unaware that CAZ’s would be introduced into UK towns and cities as early as next year. I would hazard a guess that even fewer consumers would be aware of the changes.

The survey also found that 38% were unaware that CAZ’s would involve charges for all but the most modern and least polluting diesel cars. The BVRLA advise that the charges in some cities could be as high as an eye-watering £100 per day for an HGV and £12.50 per day for other vehicles such as taxis and vans.

In addition, some local authorities have announced plans to charge drivers of more polluting diesel cars a CAZ-entry fee. Leeds, Derby, Nottingham, Southampton and Birmingham have been told to introduce CAZ’s by 2020 whilst a further 23 local authorities have been earmarked for CAZ implementation and a further 33 are considering what approach to take as part of their air quality strategy.

If you live or drive into London you could be in for a shock! From April 2019 they will be introducing a 24/7 Ultra-Low Emission Zone which is then set to extend to an area 18 times larger than its initial size by 25^th October 2021. No that isn’t a typo, it is 18 times the size!!

I agree with Gerry Keaney, CEO of the BVRLA who said to Business Car, ‘Unless more is done to publicise the impact of these various CAZ’s and mitigate their impact, hundreds of thousands of businesses across the country will be hit with a regional road transport tax that will bring additional cost and confusion at a time when firms are already dealing with Brexit-related economic uncertainty.’

I also agree with the BVRLA who have called for policy-makers to introduce a range of measures to help fleets to transition to cleaner vehicles. This should include restricting the use of CAZ’s to essential areas keeping them as small as necessary.

With the widespread introduction of CAZ’s, there needs to be an element of standardization introduced. This should include such things as signage, communications, exemptions and application. It seems wrong that you should be able to travel into one town centre in your car without a fee whilst being charged in another.

One suggestion is to award mobility credits to drivers of older diesel cars that will allow them to travel at reduced rates on public transport, car hire and car share if they agree to scrap their old polluting cars. Personally, I can’t see that happening, especially if the drivers live in the country with poor transport access.

If someone had said to you just 5 years ago that technology will have progressed to the point where you could get out of your car, in front of your garage or beside a parking space, press a park button and the car would park itself – you’d have thought they’d overdosed on something dodgy!

Apparently, the technology has been about for years but the law has prevented car manufacturers from fitting it to new cars because in order to drive or park a car you must be behind the wheel. Some manufacturers have an app that you can use on your mobile device to park the car so even though you could still be sitting in the car it’s still illegal to use a mobile device whilst in control of a vehicle.

After representations from motor manufacturers, insurers and haulage companies the Government held a consultation on changes to the Highway Code and relevant regulations earlier this year. As a result, changes have been introduced that allow drivers to use a remote control parking device if they are within 6 meters of their vehicle.

Whilst still not 100% clear it would seem that you could use the remote parking on your mobile device if sitting in the car because you have passed control of the car over to the car itself. This will be great for larger cars, having to negotiate tight parking spaces as well as parking your car in a garage that isn’t wide enough to park the car and open the driver’s door.

This is now law and some manufacturers already have these devices available such as Mercedes, Peugeot and Jaguar. Many have applauded the new technology believing that it opens up more parking spaces that may appear too tight but with the aids fitted could shoe-horn your car into the space available. Personally, I feel people should learn to park and as my dad used to say – ‘just something else that can go wrong’. By Graham Hill

Mercedes announced earlier this year that their Plug-In Hybrid Electric Vehicle (PHEV) E and C Class cars would be diesel-electric as opposed to the majority of PHEV’s which are petrol-electric. As most people know, diesel cars already emit less CO2 than their petrol equivalents so by adding the diesel engine to a 90KW electric motor the CO2 emissions reduce even further.

So whilst some manufacturers reacted far too quickly (in my opinion) to the adverse reporting on diesel engine emissions by removing diesels from all future development some are embracing the combined benefits of diesel-electric compared to petrol-electric. But as with normal diesels the picture is far from clear. No thanks to the Government.

For example, Peugeot had a diesel-electric plugin but due to poor sales announced in 2016 that it would be dropping it. In 2012 Volvo had a diesel-electric plug-in but dropped it in favour of petrol-electric followed by recent announcements to go all-electric next year (2019) with every car they sell having an electric motor.

Audi and Landrover favour a diesel-electric in the larger 4WD models although the new Land Rover models will be produced with petrol-electric combinations. Then there is Kia who announced earlier this year that they would be jumping on the diesel-electric boat with the launch of a Sportage and Ceed with diesel-electric power in 2018.

Confused? Yeah – me too! By Graham Hill