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New insurer ‘By Miles’ is set to shake up the car insurance industry. The first pay-per-mile insurance policy is believed to save motorists hundreds of pounds each year. Drivers pay a flat rate annual fee to cover the car against damage and theft when the car is parked. Thereafter the driver is charged per mile whenever he uses his car.

The policy is aimed at those travelling less than 7,000 miles per annum which is around 50% of all UK drivers. The distances are recorded by a telematics device that the owners plug into their cars On-Board Diagnostics (OBD) port. Each journey can be tracked and recorded on a dedicated smartphone app then the driver billed monthly based on the distance travelled.

Motorists taking out a policy will be charged a minimum of £150 per annum and 3.0 pence per mile although the per mile charges stop after 150 miles in a single day or 10,000 miles per annum. James Blackham, co-founder of By Miles said car finance has ‘barely changed in 30 years. Every extra mile you drive adds to the risk of having an accident. We think it’s high time that is reflected in the price infrequent drivers pay’.

Matt Cullen of  The Association of British Insurers approved of the new way to insure cars. Motoring habits are changing as are consumer needs so it makes sense to adapt things like insurance policies. The AA also admitted that it was investigating real-time insurance cover. I think that it’s a great idea and should take off. By Graham Hill

According to the RAC, the UK’s pothole problem is getting worse, not better as it should be by now. The number of cars damaged by pothole strikes is at a 3 year high.

Data released by the RAC shows that 4,091 motorists reported breaking down between April & June 2018, the highest 2^nd quarter in 3 years – as a result of snapped springs, damaged shock absorbers and distorted wheels along with other pothole caused damage.

RAC Chief Engineer said councils were ‘not winning’ the battle against potholes. ‘Despite further emergency funding from central government, their budgets are even more stretched than in previous years. The overall quality of our roads should be getting better, not worse,’ he added.

I fear that it will take a major accident caused by a driver losing control of his car having hit a pothole before the Authorities finally take the situation seriously. By Graham Hill

How many times have you driven along a massive stretch of roadworks with a speed limit of 50 miles per hour only to get to the end without so much as a sniff of a worker? Annoying isn’t it? Well, following complaints Highways England is now looking at the situation with a view to possibly increase the speed limit from 50mph to 60mph when it isn’t putting workers at risk.

The counter argument has been put forward in the past that when long-term motorway roadworks are being carried out the lanes are reduced, a good reason why the limit should be brought down as it reduces the danger to drivers also. But without workers in danger, it is felt that the limit could still be increased to 60mph to improve traffic flow.

As an example, they mention weekends when the limit could be increased to 60mph on Sundays then reduced back to 50mph ready for Monday. They are also looking at the possibility of retaining the 50mph limit when commuting to work but return home with a limit of 60mph and in places where the workers are some way away from the traffic lanes. Jim O’Sullivan, Highways England Chief Executive, said that whilst motorists appreciate the need for road works they also find them frustrating.

They have already carried out pilots with permanent limits of 55mph and 60mph but this is the first time they have considered switching limits – no doubt using latest technology. If they introduce this new scheme it should improve traffic flow. The sooner the better as far as I’m concerned. By Graham Hill

Years ago when I was working in industry I was a Cost and Management Accountant. We manufactured, installed and leased fire alarm and hotel communications equipment. We developed a new fire alarm system to meet the new fire alarm laws that were being introduced into small public buildings, scout huts, church halls, meeting rooms etc.

Our designers came up with a swish control panel which was latest technology with transistors and other miniature gubbins. It made the unit much smaller and also cheaper to make. Before going into production our chairman, himself an engineer, wanted to see this newly designed product line. He collected me en-route to the design department and I went through the costings – he was impressed.

However, when he saw the miniature size of the unit I saw his face drop. He asked the sales director how much we were leasing the unit for and how much we were selling it for cash? After hearing what we were selling the unit for he turned to the head designer and said ‘Double the size of the box’. The designer said, ‘But sir we don’t need to put it into a bigger box’. The chairman’s answer was, ‘You do if we’re going to sell it for £500’. The box size was doubled and the inner workings remained the same.

So what has this lesson in perception have to do with cars? Well, it seems that in these times of miniaturisation the most popular cars are the big and bulky SUV’s. Just about every manufacturer has some sort of 2WD or 4WD SUV in their range with the likes of Audi, Mercedes and BMW having up to five, six or even seven in their line up.

Motoring experts describe them as boxy, raised hatchbacks with high running costs and compromised road handling. Totally impractical, unable to fit into most garages or parking spaces. But the manufacturer’s love them because, without a doubt, they are the most profitable cars in their ranges. Big is best as they charge disproportionate amounts for these cars compared with their smaller saloon car equivalents.

According to Audi’s product marketing chief, Jens Meier, the SUV proliferation has helped to benefit the wider car manufacturing industry. As he explained to Auto Express, the increased profit generated from SUV sales is helping to finance development work in the sports car division, cars such as the TT, RS5 and R8. He sees their advancement in sports car design as a bi-product of SUV success.

Very often the SUV’s share the same platform with saloon cars in the range along with engines and other mechanicals but the big skin adds substantially to the perceived costs by customers who pay more for the jacked up versions whilst the manufacturers wring their hands with joy. My old boss had it right all the time! By Graham Hill

Traffic on UK roads is at an all-time high according to the latest statistics from the Department for Transport (DfT). Car traffic reached 254.4 billion miles in 2017 with overall traffic up by 1.3% on the previous year to 327.1 billion miles.

Van traffic increased to its highest level also, up 2.7% to 50.5 billion miles. Cycle traffic showed the biggest increase in percentage terms, up 3.1% to 3.3 billion miles. Bus and coach traffic dropped by 3.4% from 2.5 billion to 2.4 billion miles.

Finally, motorcycle traffic remained pretty much the same. So what does this tell us? Best to ask a few experts, some of whom apparently hold the view that traffic patterns will be changing as people change from car ownership to car usage. I agree with the switch away from car ownership but rather than a mix and match between using a car, train, bus, plane, autonomous vehicle, cycle, walking etc I see the move from owned cars to leased or rented cars with the exclusive use of the driver.

I can’t envisage a time when the vast majority of the population would be happy to plan every trip rather than walk out in their onesy and slippers, jump into their car, drive to Tesco Express and buy an emergency pint of milk, loaf of bread and bar of chocolate rather than wait for a bus either way or order an Uber.

Having said that, I have friends in London who have never owned a car so what do I know. Better turn to those in the know. According to the SMMT new vehicle sales dropped to 2.5 million in 2017 down for the first time in 6 years. They are predicting a further drop this year of 5.1% to 2.4 million new vehicles.

Christoph Domke of KPMG predicted that if this trend continues we will also see a decline in manufacturers. We have 27 at the moment but he suggests that within 10 years this could decline to just 10. An interesting statistic was the rise in access to a car in each household. In 1951 it was as low as 15% but in 2016 that had jumped to 77%.

However, dig a little deeper and it can be seen that families in the lowest income level fare much worse with just 44% of households having access to a car. This has led to confusion. Lowest income families may actually be leading the way to Mobility as a Service (MaaS) the latest buzz expression. Behind the expression is the mix and match of cars, trains, taxis, car shares, autonomous cars etc.

But lower-income families use public transport more because of necessity rather than a planned structured approach to mobility. So will we ever see the day when the majority, if not all, vehicles on the road are driverless and driven by electricity? Motorbikes create a challenge I think, not only to become driverless but also to be spotted and avoided by driverless cars. I mean some motorbikes are capable of 180 miles per hour – that is bloody fast.

On the other hand specialist company MaaS Global launched its app called ‘Whim’ in the West Midlands in April 2018. It offers multi-modal transport alternatives to car ownership. Within the first month there were 3,000 downloads of the app which combines access and payment for various types of transport including public transport, car hire and taxis.

The general consensus was that this could work well in larger towns and cities but it wouldn’t be so attractive in rural areas where public and even private transport links are nowhere near good enough for such a scheme to work. Time will tell! By Graham Hill

For most people WLTP probably doesn’t mean a lot but for anyone in the motor industry it’s been an absolute pain over the last 12 months. It stands for the Worldwide harmonised Light vehicle Test Procedure. It’s an attempt to get all vehicles properly tested, following the VW emissions debacle, making it more difficult to fiddle the results.

New model cars for this year had to be approved using the new testing criteria. The tests were still carried out in the rolling road laboratories but instead of self-testing examiners were in attendance to oversee the testing and the tests were more involved and took much longer.

A few failed but when the new models were designed they took the changes into account so most successfully got the approval they were looking for at the first time of testing, keeping them in the same emissions brackets. However, the next phase was to test existing models which caused major challenges as they were found to be way out.

An even bigger challenge was not so much carrying out modifications on the production lines in order to make new cars (but old models) compliant and back to their previous readings, it was the time it was taking to wait for a re-test. The authorities hadn’t allowed for the massive increase in test facility requirements for not only cars that had previously been tested but the re-test requirements.

Cars that were tested under the old regime must be sold by the end of August so we’ve seen some extra discounts but we’ve also seen orders and production lines shut down whilst manufacturers have carried out modifications to their engines and exhaust systems in order to make their latest production compliant.

In an effort to reduce the burden the DfT has allowed 10% of the manufacturer sales or 2,000 vehicles that haven’t made it through the new emissions tests to be registered after 1st September,

However, this takes us to the next challenge. The Real Driving Emissions Tests (RDE). This compliments the WLTP tests and takes us a little further towards accurate emissions tests. The RDE tests require that standard cars be fitted with test equipment for testing on real roads in real conditions.

They check amongst other things low and high altitudes, year-round temperatures, additional vehicle payloads, up and downhill driving, urban, rural and motorway road driving. So it looks like we’ll be in for even more disruption as we move to the next ridiculous level.

The fact is that everyone drives differently which provides widely differing emissions and performance results. And that’s all before we Brexit. More pain for the industry and customers. By Graham Hill

I’ve been in this industry for over 30 years and it worries me greatly the levels of incompetence displayed by those at the sharp end. I don’t blame the sales staff, it often stems from the top. Directors and senior management struggle with basic product knowledge that spreads like a cancer throughout the organisation.

Whether it’s an independent dealership, dealer group, bank owned finance company, manufacturer-owned finance company or independent their basic knowledge is abysmal. Unfortunately, this attitude spreads throughout the organisation which means that customers are incredibly poorly informed and likely to make wrong financing decisions or the right decision but unaware of all the implications and the potential true costs.

I broke the story over 2 years ago that the PPI claims industry was eying up the car finance industry and the new regulations that were being introduced by the relatively new FCA. They were getting a sniff that all was not well inside the industry and there was potential for mis-selling claims.

If you think of what happened when a PPI claim was successful, people were having all their premiums returned. Could this mean that customers could have all their payments returned and the car given back as a result of being given bad information by an ill-informed or crooked salesman? The first test cases will give us an idea.

In the meantime, I see false reporting in the press and idiots masquerading as experts giving poor advice to consumers. There is little doubt that I am rapidly becoming the most influential person in the UK when it comes to vehicle finance. My appointment as non-executive director of one of the most progressive PR companies in the UK will help this along. Especially as the company chairman is as gung-ho as I am and supports me.

To illustrate my point I’m not going to mention names in order to avoid any unnecessary legal challenges but the Chief Operating Officer of one of this country’s largest dealership groups wrote a pile of nonsense in response to a poorly written piece in the Times. He, first of all, criticised the paper for the warning about potential problems with the claims industry. Defending the indefensible!

He then rants on about the difference between PCP and Personal Contract Hire (PCH) making a big issue about PCP not being a lease. This is fundamental. It is a form of HP agreement and HP agreements are leases – idiot. Any finance other than a loan is a form of lease. If someone else owns the goods whilst you have the use of them – it’s a lease! That’s basic accounting something one would expect someone in his position to know.

With HP or a PCP you only own the goods when you have paid all the money owed plus an option to purchase fee. If you want to read my views of the industry and reveal masses of PCP secrets go to Grahamhilltraining.com and register to download my PCP report. I’m explaining just about everything once and for all. Next on my target list is PCH. By Graham Hill

As most of my customers know you don’t pay your initial rental until after the car has been delivered and you have had the opportunity to inspect it. There is a reason for this and it’s not because my funders are really good eggs and don’t like taking money off you before you receive your car.

I’m sure they would love to but that would mean that by taking money from you before delivery the transaction would fall inside the distance selling rules. That would give you 14 days during which for any reason whatsoever you could return the car and ask for a refund.

That would prove to be very costly so it’s avoided. Of course you can still return the car if it’s faulty or not as ordered but not because you changed your mind. However, many people now buy new and used cars online unseen which means that the transaction falls within the scope of the Distance Selling Rules provided the car was bought from a dealer or trader (not privately).

You have 14 days starting the day after delivery of the car to reject it as long as you haven’t physically seen the car. If the whole transaction is completed online then you just visit the dealer to collect the car it is still a distance sale.

However, some sellers will issue terms and conditions for you to sign or tick online. You must read them as some are now including a term that states that the contract is only concluded when you collect the car, i.e. on the trader’s premises.

This takes the transaction outside the Distance Selling Regulations, so no cooling off period after you’ve driven the car away. If you have bought the car from a private seller online the distance selling rules don’t apply so no cooling off period. By Graham Hill

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

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

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

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

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

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

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

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

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

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

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

Do it now!! By Graham Hill