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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

£500 Overspend On Petrol: Drivers can spend £500 per annum more than necessary depending on where they fill up.

Daily Insurance Claims Hit £33m Per Day: Car insurance payouts ran at £33m every day in 2016 whilst premiums hit a record high.

1.4 Million Drivers Attended Re-Training Courses: Drivers who were caught committing motoring offences attended courses raising £54 million for the police in the process

9,050 Drink Drive Casualties: The highest on record since 2012 with 2016 7% higher than 2015.

Council Parking Revenue Up To £1.58 Bn In 2017: New figures revealed that this produced a surplus of £819 million.

1,024 Children Banned From Driving: Even though they weren’t old enough to drive

39% Drop In Phone Penalties: Motorists caught using a mobile phone whilst driving dropped from 49,694 in 2016 to 30,470 in 2017. This was put down to fines and points doubling. Or maybe it’s down to fewer police and hands-free fitted to more cars.

109 Driving Instructor Investigations: The DVSA cracked down on inappropriate relations between driving instructors and students.

Superfluous Road Signs: 4.3 million road signs were shown by the Department for Transport to be superfluous.

15% Of Motorists Report Being Blinded By Headlights: According to research carried out by the RAC

The Average Fine For Car Theft Was £198: With 80% of crooks receiving a fine rather than a jail sentence.

The Average Age Of Cars On UK Roads Is 8.1 Years: The Department for Transport revealed that the average age increased from 7.8 years in 2015 and 6.8 years in 2003.

8,000 Crooked Car Washes: The CarWash Advisory Service estimated that 8,000 of the 20,000 hand car washes are involved in illegal activities.

5.65 Million Parking Tickets Handed Out In 2017: The Government has pledged to clamp down on private firms.

Pothole Claims Run At £1million Per Month: The AA revealed the scale of the claims.

89,000 Vehicles Stolen In 2017: Vehicle theft went up from 56,000 in 2016 to 89,000 in 2017. Blamed on police cuts and thieves managing to crack keyless technology.

80% Of New Cars Were Bought On Finance: According to Auto Express I gave tips on PCP deals along with revelations. An influencer!

London Reduced Speed Limit: Sadiq Khan said that all roads managed by Transport for London would have a 20mph speed limit

Drivers Overspend £3.4bn On Repairs: Green Flag indicates that drivers spend £3.4bn more than they need to.

20% Reduced Reaction Times: University of Bath reported this drop in reaction time as a result of a hangover.

£106 million Government Investment In EV’s: This investment in vehicle and battery development was matched by £500 million investment from industry.

27% Of Those Killed On Our Roads Were Not Wearing Seatbelts: 1,793 people lost their lives on the roads in 2017, 27% were found not to be wearing seatbelts.

Audi Fined £700m For False Emission Figures: German authorities imposed the fine on Audi for ‘deviations from regulatory requirements’ over V6 & V8 diesel engine emissions.

Diesel MOT Failures Hit 238,871: Following new MOT rules – a fourfold increase.

2.3 Million Cars Clocked: One in 16 cars display a false mileage reading with the Local Government Association calling for the ban of mileage correction devices.

So there you have it – some of the major issues and statistics of 2018. What will 2019 bring us – well we will find out soon enough! By Graham Hill

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

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 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 am often quoted in the press when it comes to things like new car registrations and why diesel sales are up or down compared to petrol sales. I haven’t of late because many of the journalists, not all I would hasten to add, simply put out a story that they want to rather than the truth. Oops sounding like Trump there for a moment!

 

It isn’t all the fault of the journalists, often it is the fault of the so-called experts they approach for a comment other than myself. The sort of people who have probably never spoken to a customer or a member of dealership staff. They simply guess, then before you know it the guess becomes the truth.

 

One of the biggest problems in all the commentary is the fact that behind the comments are usually statistics and they don’t come with sufficient explanation – leaving it to the ‘experts’ to interpret the figures. Take new car sales in August and September this year. Quite correctly, following the announcement that new car sales in August were up on previous Augusts, the headlines picked up that due to the new WLTP emissions test rules cars had to be sold by the end of August – or any unsold cars that didn’t meet the new levels could be forcibly scrapped.

 

Not surprising that any cars in stock were heavily discounted. Hence the spike in sales – all fine so far. In the meantime, cars were being tested, failing, modified then retested in order to meet the new standards. In the case of Jaguar Landrover, they shut down their order book and stopped making cars that hadn’t been emissions approved.

 

So when Joe Public walked into their local dealerships to buy a new car on the new registration for September there were no bloody cars. So they either bought second hand or they placed an order for a new car. So orders and new car sales in September may have been on target or even up on previous years (I’m not saying they were) the ‘experts’ immediately searched for reasons.

 

Things such as Brexit, EU manufacturers turning their backs on the UK, the economy not as strong as was thought, consumers and businesses not confident about the future. When all they measured was sales and not orders it’s not bloody surprising – there were no damned cars to register – good grief.

 

And don’t even get me started on the diesel vs petrol debate. Such appaling information on the issues related to either petrol or diesel emissions confuses everyone. And whilst the debate goes on London and other cities see a bit of a cash cow and treat all diesels as destroyers of the universe and tax them for entering the city and parking. Whilst environmentalists report an increase in CO2 emissions last year for the first time since records began. That’s the stuff that petrol engines generate more than diesels.

 

On the other hand a lifetime of breathing in NOx whilst walking down the street has been statistically proven to shorten lives – by an average of 3 minutes. Look, I’m not making light of car emissions and their effect on health but as with new car registrations and all other statistics – can we please add caveats to the stats. in order to bring some reality into the comments? Probably not – they won’t make such exciting headlines! By Graham Hill