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Friday
Jun272014

Britain diesel costs remain amongst the highest in Europe

Last month we reported that fuel costs remained a major concern for British motorists.  According to a new study by the Post Office, concerns could well be justified.

The study has shown that British drivers are currently paying up to 43p more per litre than other drivers in the continent.  Even drivers in neighbouring France are paying 29p per litre less than UK motorists.

The information – which has come from the Post Office Travel Money annual report into motoring – said that even after exchange rate discrepancies were taken into account, diesel in the continent was cheaper than in Britain in 19 of the 22 countries surveyed.  ‘It does smack of a rip-off’ the report noted.

British supermarkets yesterday responded to the findings by cutting up to 2p off the cost of a litre of diesel, though critics have still argued that a further decrease is necessary.

British diesel prices are 20th out of 22 EU countries, with an average price of £1.37 per litre compared to 94p in cheapest Andorra and 99p in runner-up Luxembourg. Even the sixth placed country – Spain – was measured at just £1.11.

For a family driving 1,000 miles, a drive through France would cost £44.26 less than it would for a family making the same journey in the UK.  The same journey in Andorra would cost £65.56 less.  Petrol price gaps are still present, though less dramatic: the UK in 12th place at a total cost of £1.31 per litre compared to £1.04 per litre in Andorra.  The report said:

‘At £1.37, the UK emerged as one of the most expensive countries for diesel motoring.’

There were some positives noted in the report.  Lower pump prices on the continent combined with a stronger pound against the Euro should mean that UK drivers obtain a bumper summer bonus when driving.  Vice versa, the report advises those planning to drive into Britain to fill up before they arrive.  The report stated:

‘Lower prices in European petrol stations mean that UK tourists on Continental motoring holidays can expect their cars to drive more miles for less cash this year. Fuelled by the strong pound, pump prices have fallen in 20 of 22 countries surveyed.’

RAC Fuel spokesman Simon Williams said that UK garages were dragging their feet, and that their actions smacked of profiteering:

‘Fuel retailers must reduce the price of diesel at the pumps as the wholesale cost is now almost the same as petrol - yet average forecourt prices are still 6p a litre more expensive.

‘Transparent, fair fuel pricing is vital for the economy and to maintain the trust of motorists.  While two thirds of Britain’s 29million cars run on petrol we use twice as much diesel, around 26billion litres a year.’

Ahead of the damning report, Asda was the first to cut costs, cutting up to 2p per litre off their diesel and setting a price cap of 131.7p per litre.  Petrol prices remain unchanged at 127.7p per litre.  The supermarket chain noted that significant falls in the wholesale price of diesel meant that it could pass on cost savings to customers.

Monday
Jun232014

UK Car sales grow for record 27th consecutive month

UK car sales have risen for the 27th month in a row, breaking a record that dated back to the 1980s. 

The availability of easy credit combined with heavy discounting and rising consumer confidence (not to mention fairly solid economic growth) has swelled the demand for new cars within the UK.  Sales in the country are now out-pacing pre-recession levels.

British car buyers have been considered the darlings of the European car industry within the last couple of years, with the rest of the continent still struggling with lower sales.

New car sales in the UK rose 7.7 per cent in May, reaching a total of 194,032 vehicles.  Figures show an 11 per cent increase over those from 2013.

Some market researchers and analysts have questioned the stability and sustainability of the growth, as well as the economic foundations on which it has been built. Recent research has shown that at least eight in every 10 new cars in the UK are currently bought with credit.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Trades, spoke to the Financial Times, saying:

“The new car market has now grown in every month since March 2012, the longest period of growth on record and a reflection of the UK’s ever-improving economic conditions,”

“With SMMT forecasting an overall rise of around 6 per cent over the year, the coming months should see some levelling off in growth rates as underlying demand stabilises,”

Last month, the SMMT increased its sales estimate for 2014 to more than 2.4m cars, compared to the previous figure of 2.3m.

Executives, though, have been keen to stress that the market will begin to flatten out soon, approaching a more steady level of annual demand.

Richard Lowe, the head of Retail & Wholesale at Barclays, attributed the growth to the increase in consumer confidence.

“Looking ahead over the summer months it will be interesting to see if this holds firm, or whether we will see the growth rate drop down a gear,” he said,

“If there is a slowdown, all eyes will be on manufacturers and the actions they take to try to drive the market forward.”

Out of the manufacturers in the UK, Renault saw the biggest levels of growth, with a remarkable 65 per cent increase in the number of sales.  This was mainly driven by a 92 per cent increase in sales of the budget Davia brand.  Toyota and Volkswagen also saw their sales expand by 21 per cent and 15 per cent respectively.  Ford was the most notable firm to register a fall in sales, seeing a reduction in 9 per cent per month.

Monday
Jun022014

British motorist caught driving 149mph

A British motorist was caught driving at 149mph on the M25 in Kent, it's been revealed. 

A Freedom of Information request by the Institute of Advanced Motorists (IAM) to police authorities asked for the location and speed of the fastest motorists caught by speed cameras within the last year.  Other notable speeders included a driver in Gateshead, who was recorded doing 96mph in a 30mph zone, and a motorist who reached 127mph on the A413 by-pass in Wendover, a road that carries a 60mph area.

Thirty-three of the 39 police authorities in England and Wales responded to the request by the IAM. The highest speed for any driver on a 50mph road was measured at 119mph on the A414, with the highest 40mph road speed coming from a Lincolnshire driver caught doing 113mph. 

IAM Chief Executive Simon Best noted that travelling 149mph meant travelling at nearly two-and-a-half miles in a minute.  Mr Best said:

"If anything goes wrong at that speed, you're unlikely to walk away and you are a grave danger to the innocent road users around you."

"Speed limits are a limit. They are not a target to beat.

"Unfortunately, this message has not got through to many motorists and it's clear that efforts to make speeding as socially unacceptable as drink-driving continue to fail.

"The current guidelines on sentencing for excessive speeding offences are out of sync with modern roads, modern vehicles and society's view of the value of lives lost in crashes."

The driver responsible appeared at West Ham Magistrates Court in March, and received a six month driving ban as well as a fine for £600 and a costs and victim surcharge of £150.

As part of their response, Kent Police stated that 66,357 people had been handed speeding notices during 2013, a substantial increase on the 34,438 recorded in 2010.

The news comes at the same time as a new survey that claims nearly three-quarters of experienced drivers would fail their driving test if they were forced to take it again.

The survey - which has been released by insurance firm Direct Line - saw 50 experienced drivers take mock tests at 10 different locations.  The average driver recorded 16 minor faults - one more than would be allowed during a test.  The survey's drivers also recorded an average of three serious or dangerous faults: faults that would see them fail a real-world test straight away.

Ensure that you stay safe by keeping your car in perfect condition.  ASM's Vehicle Parts shop will help you keep everything tip-top.

Friday
May092014

How a regulatory change could raise company vehicle tax by 30%

A new regulatory change could lead to businesses having to increase their vehicle tax budgets by up to 30 per cent, if the latest reports are to be believed.  Today, we’re going to take a look at the changes that are being slowly put in place, and the impact that they could potentially have.

What are the changes?

The plan is to introduce a new vehicle emissions test dubbed the Worldwide Harmonised Light-duty Test Procedures (WLTP).  It’s believed that the current New European Driving Cycle (NEDC) has been failing to provide a realistic picture of fuel consumption, and the new measures could help to increase the accuracy of the data.

Why has the NEDC been failing?

It’s believed that a number of factors have been contributing towards an ever-growing gap between the official figures and the real world of motoring:

  • During the process, the test car very rarely reaches motorway speed. What’s more, fuel consuming resources such as lights and air-conditioning aren’t turned on during the test.  The figures in the lab simply aren’t an accurate portrayal of modern driving patterns.
  • Flexibilities and tolerances within the test procedure can actually be exploited in order to reach lower consumption figures.  For instance, speed within the specified corridor for the test but kept at a level just below the target speed will result in lower fuel consumption than speeds just above.
  • The inertia load applied to the rolling road (designed to simulate real world vehicle inertia and aerodynamic drag) can be varied only in subtle steps.
  • Small reductions in weight – such as removing the standard spare wheel – can be enough to get the car onto the next lowest inertia load band.  As a result, a car can be moved into the next lowest inertia load band, and experienced lower loads in the test than when on the road in the real world.  Indeed, International Council on Clean Transportation (ICCT) research indicates that a car is five times more likely to be just under the inertia limit than just over.

The Society of Motor Manufacturers and Traders (SMMT) has already acknowledged that the current regime is failing, with previous chief executive Paul Everitt noting that figures at the moment are based on “an average, of an average of the worst possible average”.

What effects could the changes have?

If WLTP was officially introduced, the impact could be substantial.  Though existing cars would not be re-tested – the tax would apply only to new models – company car drivers and employers, who currently pay tax according to a vehicle’s own CO2 emissions, could see their tax liabilities rocket by as much as 35%.  Drivers would be faced with the choice of trying to find the extra cash to pay the tax bills, downsizing or simply finding an alternatively fuelled vehicle. 

It’s also possible that employers might choose to ditch company car provision completely, and instead offer their employees a cash equivalent.  Figures from Fleet News indicate that that 64.4 per cent of fleets would completely forgo real-world figures if not doing so meant a substantial increase in tax.

The other potential consequence is that it could lead to a two tiered tax system, with employers having to pay significantly more in both Class 1A NIC and VED and employees being forced into a significantly higher benefit-in-kind tax bracket should they choose to continue to drive the same car.

The opposition

Currently, the most ardent opposition to the changes has come from the car industry itself.  A report in the Financial Times, for instance, has suggested that the European Automobile Manufacturers Association (ACEA) is currently lobbying for a 2021 implementation date at the very earliest. 

The group’s secretary-general Erik Jonnaert said:

“Looking at the scale of the task required, ACEA believes 2017 is incredibly ambitious.”

It seems likely that the changes could end up proving very costly for carmakers.  Currently, the EU has set a pan-European sales weighted average new car CO2 emissions target of 95g/km by 2020.  Those manufacturers who miss the target are currently facing penalties of up to 95 Euros per g/km of CO2 over target for each car registered.

As well as this, the ACEA has also recognised the tax implications of the WLTP, saying:

“Managing the change to the WLTP must be addressed. This includes the labelling of vehicles, how to deal with old test cycle and WLTP CO2 and fuel consumption test figures without confusing customers, how to apply the WLTP for the purpose of the legal monitoring against a future CO2 fleet average figure, and how governments will ensure that any CO2-based taxation scheme fairly addresses vehicles between the periods when the old test cycle is phased-out and WLTP is brought in.”

What is the future?

The WLTP was given the green light by the UNECE in March, with the latter organisation saying:

“WLTP better simulates real driving conditions, with more modern and realistic driving scenarios and considers other widely used factors such as air conditioning and seat heaters that drive fuel consumption upwards.

“It also closes many of the loopholes that existed in the current test method in order to create accurate, consistent and repeatable results on fuel consumption which are thus more difficult to manipulate.”

Currently, UNECE estimates that the figures for fuel consumption under the WLTP would be between 10 and 20 per cent higher than those under the currently test cycle.  The ICCT, meanwhile, suggested that it could be up to 30 per cent higher.

This useful table (put together by the guys at Fleet News) gives some indication as to how the new regulations could impact you financially:

Wednesday
Apr302014

Fuel Prices Still the Major Motoring Concern

With the freeze on fuel duty in this year’s budget, motorists had every right to be relatively pleased.  However, new research from the British Car Auctions (BCA) has shown that the price of fuel is still the biggest concern for UK drivers.

70% of those surveyed by the BCA stated that fuel costs remained the issue that worried them the most. Unfortunately, this is by no means the first time it’s caused concern: fuel prices have been topping the motoring worry table since at least 2010.

Commenting on the new figures, Tim Naylor – the editor of the BCA Used Car Market Report – said:

“With nearly three quarters of respondents to our survey using their car every day, clearly every aspect of the cost of motoring is a worry.”

“The cost of fuel remains top of the list of concerns – despite the fact that the AA has reported a steady drop in prices over the last year. The reality is that fuel prices today are still much higher than they were just a few years ago – and for many motorists it’s hard to forget when unleaded was under £1 a litre. According to our research over one in five are convinced the fuel retailers are failing to pass on potential savings and a quarter of drivers are frustrated by the lack of action by the Government to tackle the cost of motoring.”

The current top five concerns about motoring costs (in order) are:

  • The price of fuel
  • The cost of vehicle tax
  • Insurance costs
  • Vehicle maintenance and servicing
  • Parking

Over half of the motorists surveyed by the BCA stated that if driving costs continued to increase, they would consider using their car less for non-essential travel.  Over a quarter of those surveyed said that they would walk more, and one in five claimed that they would make use of their bike instead.  Another quarter claimed that they would increase their use of public transport.

Mr Naylor was keen to emphasise the reasons for motorists feeling more pressured by rising motoring costs:

“More than one in ten drivers feel pressured by rising motoring costs because they need their car for work.”

He also highlighted the fact that more than half of those surveyed said that they had seriously considered changing their current car for a more fuel efficient model within the last year or so.

Fuel duty has always been a substantial concern for British motorists.  A 2010 survey by the AA showed that 53% of drivers saw fuel as their major problem.  At the time, illegal drivers were the second biggest concern, but no longer seem to be a significant worry.