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NO ROOM FOR SHOWROOM EXCESS

Spring may be in the air, but fleet managers will be trying to avoid the icy chill of the new ‘showroom tax’ with drivers due for new executive vehicles next month, argues Masterlease.

The impact of the recession and previous Government tax bandings on company cars have dramatically altered choice of fleet vehicle away from so-called ‘gas-guzzlers’ to more eco-friendly sub 160 g/km CO2 cars.

But from April this year higher emitting new vehicles will see a dramatic increase in VED at the showroom.

Currently a ‘Band M’ vehicle – a Range Rover or Porsche Cayenne, for example – would attract £405 on registration, but the first year rate from April will more than double to £950. Also in the second year, although the rate drops, at £435 it will still be £30 higher than current bandings.

Conversely, very low emitting vehicles – sub 100 g/km will be zero rated and alternative fuel cars including gas-propelled vehicles, and those capable of being propelled by petrol and gas or electricity and petrol/diesel (hybrids) will be charged at a marginally lower rate.

“It is the Government’s stated intention to use motoring and related taxes to influence driver choice towards lower emitting vehicles.  The changes to Vehicle Excise Duty are the latest measure, with the introduction of an incentive/penalty payable upon vehicle registration,” says Clive Forsythe, Sales and Marketing Director for Masterlease.

“The reality of the situation is that we have already witnessed a shift toward lower CO2 vehicles and improvements in engine technology mean that vehicles that perhaps would have been in the higher bandings are no longer classified as such.”

“However, there will always be an executive demand for larger vehicles as drivers are often motivated by different reasons including status and brand considerations,”   says Forsythe.

“If you have a large fleet of middle range vehicles, there are obviously savings to be made and lower emitting vehicles also make a positive statement as far as the environment is concerned,” he adds.
 
Masterlease has written to all of its customers to remind them of the changes including a comparison table for those in the market for new vehicles post April 1.

“These changes in the vehicle tax system will of course impact Masterlease and our customers.  If fleet managers have not already reviewed their fleet policy and choice lists now is the right time, particularly for those vehicles emitting 160g/km CO2 or more which – in line with last year’s changes to capital allowance and lease rental restriction – are the most affected,” says Forsythe.

Masterlease’s quotation systems were updated from 1st February to include the impact of the new first year rate.  Where negatively affected, the company has pledged to make every effort to deliver vehicles currently on order before 1st April. 

Ends