The Best Car Finance Blog In The World

Back in 2012 around a quarter of all new car registrations were autos. In 2017 that grew to 1,016,516, around 50%, so clearly there is a strong move towards autos. The reason could possibly be because we spend so long in traffic jams and nothing irritates quite so much as having to put the car in and out of gear every couple of minutes.

Spend half an hour in a traffic jam and the clutch pedal that always seemed light as a feather is now as heavy as a ton weight. Whatever the reason, the demand is increasing but the manufacturers seemed to have missed it. Whenever we have limited stock deals they tend to be mainly manuals unless the cars are executive cars, then they tend only to be autos.

This week we saw a typical example when we had a limited stock deal from VW on Tiguan petrol cars. Half were manual and half auto. That in itself was unusual because most cars of that size on special offer tend to be manuals. Within 48 hours all the autos had gone but we still had plenty of manuals (unfortunately all gone now). Crazy but proves my point.

So come on manufactures lets have access to more autos. They used to be around £30 + VAT more per month but with stronger resale values that difference has dropped to a more realistic £10 + VAT. Personally, I have driven autos for years and certainly wouldn’t go back to a manual. By Graham Hill

Most brokers and dealers have been sending out quotes on cars for delivery after the end of March, when all the new Road Fund Licence and First Registration Fee changes come into force, having not been told that the increases have not been factored into all the quoting systems.

It would seem that a few funders have not yet updated their systems to include the changes, especially to diesel cars and those costing over £40,000.

This could end up with customers having to pay the difference between the old figure and the new one. Not an acceptable situation and one that is causing both dealers and brokers concern and potential problems with customers as they are told of the extra costs.

Like most, I’m seeking clarity, but in the meantime please be aware that if you are looking for delivery of your car beyond the end of March the rate will most definitely increase or you may have some money to pay to make up the difference when the road fund licence becomes due.

If possible take delivery of your next car before the end of March and avoid all the increases.  By Graham Hill

It’s the bain of anyone’s life who takes out a contract hire or PCP agreement and hands the car back to the finance provider at the end of the contract. Alloy wheel scuffs and scrapes are not considered fair wear and tear by the finance companies. Drivers have to get the damage repaired before the car is returned – very annoying. Especially as the repairs can be quite expensive.

If you are like me and you live with scuffed alloys until the end of the agreement you are unlikely to experience warranty problems, relating to the wheels, if you have them smart repaired just before the car is returned. However, Colin Green from Maidstone in Kent did have a problem. It was a corrosion problem with one of the wheels on his Mercedes. Mercedes agreed that there was a fault and replaced the faulty wheel.

Around the same time, Colin found that two of his wheels were scuffed so having taken advice from Mercedes Warranty Team he was advised to have the repair work carried out by a Mercedes Star Partner, someone they approved to carry out repairs to their standard. Which is what he did. A few months later Colin noticed that two of his wheels were now showing the same signs of corrosion that the first wheel showed. He contacted the dealer.

This time they refused to replace the two wheels after asking where he had the car serviced. Having been told that he could use a Star Partner he had the car serviced by a Star Partner service agent. They said that as he hadn’t had the repairs and the service carried out by a main dealer he invalidated his warranty.

As usual this is totally wrong but after Auto Express stepped in Mercedes replaced the corroded wheels FOC as a ‘gesture of goodwill.’ More like they were legally obliged to!! But a lesson to those who like their car looking pristine and have scuffed alloys repaired immediately after it happened. Make sure you don’t breach the terms of your warranty as future claims could be rejected. And so my fight against crooked dealers continues. By Graham Hill

When I read the latest changes to the way that leases would be accounted for in the books of large companies, being introduced by the International Accounting Standards Board (IASB), I started to get Deja Vu! You see when I first came across leasing (contract hire) I was General Manager in a PLC with over 700 vehicles in the fleet that we owned outright.

One of the departments that I was responsible for was Transport and the fleet of vehicles. They were costing us a fortune but more than that they were shown as assets on our balance sheet but the outstanding HP finance was shown as a liability. The net effect was negative. OK, technical bit over.

At the time, contract hire was only advantageous to large companies with cars that were covering big mileages. For most businesses, the off-balance sheet recording of contract hire has been an advantage because without the assets and liabilities being recorded it presents a stronger picture. It is also easier to simply record a monthly rental cost than applying the writing down process to owned assets.

Here’s where it gets interesting. After absolutely donkey’s years of negotiating the IASB has ruled that contract hired vehicles should, in future, be recorded ‘on balance-sheet’. BUT this rule will only apply to companies reporting under IASB rules, mainly those companies quoted on the London Stock Exchange.

All other companies operate under the UK Generally Accepted Principles (GAAP) which remains as is so the vast majority of firms will remain unaffected. However, as this situation could affect some of the biggest fleets in the country running thousands of vehicles the daily rental market has pricked its ears up.

Whilst January 2019 will see the new IASB rules on leasing come into force another standard, IAS 16 will come into force relating to rental vehicles where the rental period is up to a year. These will remain off-balance sheet for all companies.

As a result, the daily rental companies have got themselves excited because they receive massive discounts from manufacturers – up to 50% off the recommended On The Road price. Despite this discount, the reason why their rates are not lower than contract hire rates is utilisation – which can be as low as 40%.

This means that cars are sitting around costing money for longer periods than they are actually being hired. This pushes up rentals massively. However, if the cars are rented out on 12-month contracts the utilisation is 100% so they could reduce the monthly cost substantially from their daily rate bringing them closer to contract hire rates.

Clearly, if the rental companies brought out such a product specifically for the large fleets, as happened with contract hire, could we see a new product offered, not only to smaller businesses but also to consumers.

Plenty of discussion going on in the industry, both for and against, but with the uncertainty of Brexit a 12-month contract, priced sensibly, has some merit.  By Graham Hill

If you are a regular reader of my musings you will know that little brings my blood to the boil quicker than reading about the abuse of the law by dealers and even finance companies. The problem that many consumers have is that they don’t understand their rights. The 30-day rule, introduced as part of the Consumer Rights Act 2015, isn’t difficult to understand.

If the product, in this case, a car, is of unsatisfactory quality, unfit for purpose or not as described you have the right to reject the goods. The confusion comes when you finance the car on HP or PCP.

Too often the customer turns to the dealer in order to reject the car when in fact, legally, the rejection should be made to the finance provider. The fact that you negotiated the deal with the dealer is irrelevant. The dealer invoiced the car to the finance company. They have then financed THEIR car under contract to you.

In this instance, Auto Express reported a case whereby Jennifer Taylor of Darlington, County Durham took delivery of a Nissan Juke, financed by Nissan Finance. When she took delivery she noticed that the front and rear bumpers were a completely different shade of blue to the rest of the car.

So bad was the difference, first noticed by her dad, she could see the difference in shade from a hundred yards away. Within a couple of days, given the fault, she decided to reject the car. But instead of serving the rejection on the finance company she served it on the dealer.

The dealer carried out a test on the paint (strange given that the difference was easily visible). As a result, the dealer suggested that the bumpers needed a re-spray, costing £954. But they weren’t clear as to who would pay for the respray. As a result, Jennifer sent photos to Nissan head office.

The dealer immediately offered to respray the bumpers free of charge. But technicians warned that they might not guarantee a perfect paint match. Besides that, as Jennifer said, ‘I paid for a brand new car, not a resprayed one.’ Jennifer finally contacted Nissan Finance, explaining that she wanted to reject the car.

After 8 weeks of investigation, Nissan Finance wrote to Jennifer explaining that they still hadn’t come to a decision. When Auto Express finally got involved Nissan Finance, who clearly had done nothing, said that they were in the process of having the vehicle inspected by one of their Field Technical Engineers. They said to Auto Express, ‘If they identify a manufacturing defect with the bodywork, we will work with the customer to ensure a satisfactory solution.’

Can you sense it? Blood is boiling. Firstly a rejection is a rejection. Not an offer to repair the fault. The supplier, in this case, Nissan Finance, has one opportunity to put the problem right – only if you agree to it. Jennifer has rejected the car so a quick inspection should have been carried out which would have obviously shown that there was a colour difference. Rejection accepted!

What has a ‘manufacturing defect’ got to do with anything? That’s for the manufacturer to identify and correct if they need to change their procedures, nothing to do with the car rejection. This whole situation is getting out of control.

When the rejection was rejected the customer should have immediately contacted her local trading standards office and the Financial Ombudsman and made a formal complaint. It’s an example of a dealer and their linked finance provider sticking two fingers up to your legal rights.

My advice to all is to take out legal cover when you take out your car insurance and make sure that you are covered for such circumstances. A couple of letters from lawyers will soon sort things out! By Graham Hill

Of course, they are making the right noises but are they making the right noises for the wrong reasons? I rarely supply electric cars, even with all the publicity surrounding the benefits to the environment and low running costs.

The original argument was that they were too expensive and the range wasn’t sufficient. Whilst we have managed to supply some electric cars at heavily subsidised rates, in some cases at lower rates than their petrol and diesel equivalents, they were still not taken up in numbers, even when the potential customers rarely took their cars on long trips. Mainly driving them around their local town. Even then, they still refused to lease them.

Look below the surface and you can see that if all drivers reverted to electric cars the Treasury would lose an absolute fortune. On the other hand, thanks to mayor Khan and Chris Grayling, we have suddenly found diesels demonised as destroying the environment and an opportunity for the Chancellor to hit diesels hard with initial registration tax and initial road fund licence.

In addition, for years, the Government encouraged manufacturers to develop diesel engines capable of achieving close to 100 miles per gallon, resulting in businesses turning virtually 100% to diesel cars. As a result of the Government’s changed green policy towards diesel engine’d cars they have now hit innocent company car drivers with added benefit-in-kind tax because their companies have provided them with diesel cars, as was recommended by the Government. I believe that there’s a stitch up going on here.

Am I right? Am I being unfair on the Government? Well, one of the reasons why I have come to this conclusion is a report I read regarding the installation of EV charge points installed in 2017. Top of the list was France with 11,987, next was Germany with 7,937 followed by the UK at an abysmal 2,833. 4^th was Switzerland, just behind the UK at 2,716 with Norway 5^th at 2,116.

As usual, it is my view that whilst the Government strongly supports a cleaner environment and a wholesale move to electric cars in public, it is secretly holding back the growth of electric cars in order to screw over drivers of petrol and diesel cars through increased taxation in the short term. By Graham Hill

Following complaints and serious concerns expressed by drivers on Smart Motorways the Highways Agency has had a rethink and decided to place refuge areas, wherever practical, at distances of 1 mile and not 1.5 miles as is the case at the moment.

They will also extend a system, currently in operation, that automatically detects broken down vehicles in live lanes. Highways England will also install more refuge areas in locations  ‘with the highest levels of potential live lane stops’ and paint them orange to increase driver confidence.’ That’ll work then, nothing like a lick of orange paint to increase confidence eh!

Clearly something had to be done following a survey carried out by the AA that found 80% of respondents saying that they felt that smart motorways are more dangerous than traditional motorways. The automated breakdown detection system will be rolled out to all smart motorways across the country following a successful trial on the M25.

Smart motorways are now being accepted more but Highways England have found motorists still using lanes that have been blocked off with a red X signal. Whilst they have not been charging motorists for breaking the rules to date, in future they will incur fines as well as penalty points, due to begin this year – you have been warned. By Graham Hill

On the 20^th May this year new rules come into play. Special attention is being paid to diesel cars and new defect categories will come into force. New categories will be Minor, Major and Dangerous. Major and Dangerous will cause the car to fail the test. Cars with Minor defects will be allowed to pass but the faults will be recorded on the MOT certificate and online MOT record in the same way as ‘advisories’ are at the moment.

The new tighter rules have been put in place to stop those driving older diesel cars with particulate filters from having the casing opened and the filter removed rather than replace it. In future, if a diesel car, fitted with a particulate filter (DPF) emits ‘visible smoke of any colour’, during the metered tests will be given a ‘Major Fault’ and will fail their MOT.

Testers will also need to check the DPF canisters more carefully and if there is evidence of them being opened and re-welded, removed completely or otherwise tampered with the tester must refuse to test the car unless the owner can prove that it was done for ‘legitimate reasons such as filter cleaning.’

The changes have been brought in by the EU with the categories Major, Minor and Dangerous being applied, in future, to all cars across the EU. The wording of MOT certificates will be altered to reflect the changes. Unlike the current scheme if faults are found that could show that the driver is driving a dangerous car or in breach of the Road Traffic Act he could be prosecuted. That should produce a few headlines!

Some believe that the new rules will create even more confusion. For example, if a steering box had a leak it would be regarded as a minor problem and the car would pass its MOT. However, if the leak from the box is enough to be dripping that would lead to the fault being regarded as a major fault and result in a failure – really!!

There are mixed views regarding the new categories. My view is that they are not workable as there will be no consistency between MOT centres as testers take a different view to each fault they find. What may be Minor to one could be dangerous to another. We will see. By Graham Hill

According to What Car these are the top ten reasons why drivers call out breakdown services (in 2016)

1. Battery (433,964)
2. Puncture (328,863)
3. Alternator (65,118)
4. Engine (63,870)
5. Clutch (57,153)
6. Starter Motor (48,910)
7. Engine Control Unit (34,756)
8. Ignition Coil (29,287)
9. Gearbox (20,789)
10. Contaminated Diesel (19,711)

Very few of the above can be fixed at the side of the road so you would need to make sure that the cover you have is sufficient. Most new car policies that come with the car for either the first year or sometimes 3 years plus will be quite a good cover but some may only recover you to the nearest garage if you breakdown so check that. On the other hand your car insurance may cover you for a hire car so no need to include it in the breakdown policy.

Check the policies to make sure that you are sufficiently covered. Some policies will cover you in any car in which you are travelling so make sure that you are aware in case a friend’s or relative’s car breaks down and they don’t have a membership of a breakdown service whilst you are in the car.

Oh and make sure you have the number of the breakdown service in your phone, you don’t want to be fumbling about for the number when you break down in the middle of the night. By Graham Hill

According to Cap HPI, one in 16 cars on our roads has been clocked, i.e. had their mileage adjusted. The number of instances of clocking has increased by 25% over the last 3 years with over 40% of dealers having bought a second-hand car that they later found to be clocked. Cap HPI have estimated that an average family car can increase in value between £2,000 and £4,000 after wiping off 60,000 miles from the mileage reading.

The RAC agreed with the Cap HPI findings saying, ‘Our vehicle check data shows that discrepancies with MOT recorded mileages are on the increase for vehicles more than 3 years old.’ The cost of clocking to buyers has been estimated to be £800 million with an estimated 5 million cars showing incorrect mileages.

Years ago someone would climb underneath the car, attach a drill bit to the speedo cable and run the mileage forward till the desired mileage was reached after starting again from zero. Or someone would remove the speedo and with a screwdriver fiddle about with the counters but that often left telltale scratches on the dial and the counters. Not that I ever did anything like that.

It was as wrong then as it is now. But not illegal as long as you told the new owner that the mileage has been adjusted – yeah right. The trouble is these days mileages can be adjusted with a laptop and connector within a few minutes. There are companies out there who will ‘adjust your mileage’ for £100. Frankly, it’s a disgrace.

As always the press has turned on those taking out PCP agreements who realise how much the excess mileage bill will be at the end of the agreement and decide that it would be cheaper to adjust the speedo reading. As a result, it has been suggested by the press, that 3-year-old car are being returned to the leasing companies with an adjusted mileage. Of course years ago the only reason why cars were clocked was to increase value. These days it is suggested that it’s because drivers are trying to avoid excess mileage charges.

The fact is that years ago we had no warning lights in the cockpit. We either had the car serviced whenever we reached the service mileage or at the end of the year, whichever came sooner. Or, as was the case with this struggling accountant, we waited till we heard a crunching noise from the brakes, clutch, suspension etc. and got them replaced. So whilst we were being conned out our hard earned money by the clockers they weren’t putting lives at quite so much risk as those clocking these days.

As I’ve mentioned before, many of the safety systems in modern cars are triggered by the mileage on the car when repairs or replacements are necessary. So if a driver has had the mileage changed on a modern car he or she could be putting theirs and other’s lives at risk by throwing out all the safety alert systems that rely on mileage.

So if you are considering clocking – don’t! And if you are buying a used car check the service history for dates and mileages, look carefully at the condition, worn carpets on a low mileage car is always a giveaway. Test drive the car and ask the seller questions if you have concerns. Don’t get caught out by a dealer who puts a caveat into his sales agreement that states that the mileage isn’t verified.

Another trick of the trade is to show one mileage on the car when you test drive then adjust it back to the original true mileage when you collect it so that they can’t be prosecuted for selling you a car showing an incorrect mileage.

The crazy situation is that clocking can put lives at risk. I, like others feel that the Government should make the selling of the equipment that they use to adjust mileages online illegal and the clocking of cars by anyone other than a registered garage, who only does so after a fault is repaired, to be made completely illegal. As usual our laws are not fit for purpose. By Graham Hill