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How Will Brexit Effect The Cost of Your Fleet Cars?

According to a recent poll, 64.1 per cent of UK business owners expect Brexit to increase the business costs of running a fleet of cars.

Although nobody can be 100% certain how Brexit will affect the cost of owning a fleet in Britain, the early warning signs indicate the decision to leave the EU is going to cost the UK economy heavily.

According to Dataforce, the fleet market is already in decline following the Governments new wave of vehicle taxes implemented on 1 April 2018. Brexit is expected to pile even more costs of owning vehicles outright on to businesses.

How will your company be able to manage a fleet of cars by the time the March 29 deadline comes around next year? These are the pitfalls:

Cost and Availability of Vehicles and Parts

Fleets are more reliant on high-tech parts and devices and many of these parts have to be imported from mainland Europe. The pound has already lost value against the Euro, so parts and vehicles are already more expensive. And things could get worse.

When Britain leaves the EU, we will probably lose the right of free movement of trade. Subsequently, British companies will have to pay trade tariffs on imports which push up the cost of parts, repairs and servicing.

Labour Shortage

Teresa May has already said EU-workers will need a work permit in order to stay in the UK, and only for jobs that pay at least £30,000 a year. The impending migration of EU workers leaving the UK will inevitably leave a labour shortage. This will have a significant impact on the finances of businesses.

First of all, UK companies will find it more difficult to recruit foreign workers and those that do will have to pay more in salaries. That will mean the costs for repairs and servicing go up as well.

There will also be an interim period where there will be a shortage of mechanics available to carry out repairs. The delays will mean small business fleets lose revenue whilst their car is off the road.

No Brexit Deal

A no Brexit deal will also cause complications for UK fleets. If a deal cannot be reached with EU negotiators, the UK will revert to World Trade Organisation rules whereby tariffs would be enforced.

Should this be the case, the cost of living in Britain will increase due to a rise in general inflation. The knock-on effect will be that fuel prices go up, together with the cost of buying and maintaining vehicles.

Brexit could cause major problems for fleets, and UK companies risk losing a significant amount of revenue once Britain pulls out of the EU. The best way to avoid increased costs and the hassle that comes with it is to lease a fleet of hire cars.

For more information and top tips for managing a fleet of cars Contact Toomey 

or download our Free Quick Fleet Guide

The Cost Of Company Cars Under New Legislation

Ouch! Have You Seen The Cost Of Company Cars Under New Legislation

Businesses that own a fleet of cars face additional running costs under new legislation imposed on motorists throughout the UK and Europe. As a result, the business of car leasing is set to undergo some major changes.

In attempts to reduce carbon and nitrogen oxide emissions, car owners face higher taxes and penalties unless they upgrade their car.

The new tax bands introduced in April 2018 and the ‘toxicity charges’ that will be enforced in 2020 will mean businesses that own a fleet of cars will face significantly higher running costs.

And the running costs will be £1000’s!

 

New EU Car Emissions

According to the European Commission, cars are responsible for pumping around 12% of carbon dioxide into the atmosphere. In a bid to tackle pollution, EU legislations order car fleets to be more environmentally-friendly.

Under the so-called Toxicity Charge or T-charges for short, motorists are obligated to upgrade their cars to meet with the latest emission efficient standards.

 

Emission Penalties

Drivers of older vehicles that are deemed to be polluting the air with poisonous nitrogen oxide will be fined £10 a day.

The Conservative London Assembly Member estimates that 9000 car owners will be charged a combined total of £23m.

Furthermore, a growing number of councils across the UK are introducing fines for petrol and diesel cars that use ultra-low emission streets between certain times.

Furthermore, on-the-spot fines of £20 will be handed out to drivers that keep the engine running whilst waiting.

The initiatives are intended to promote more people to buy hybrid and electric-only vehicles in order to help the government meets its target of lowering the number of petrol and diesel cars to below 50% by 2040.

 

Increase in Car Tax

Authorities heightened the pressure on UK businesses to invest in low-emission vehicles in April 2018. New tax rates on cars will mean some cars will incur a small increase in Vehicle Excise Duty (VED) but for new diesel cars being registered there are increases of up to £560!  

Low emission cars 0 – 100 g/km will pay between £0 and £145 a year. For higher emitting cars these rates can increase to £2070 in year 1 with a standard rate of £450 in years 2 – 4.

Not only that, but a “first year” VED road tax rate makes owning a car in bands E-M even more expensive in the first 12 months.

Taxes in the first year incur costs of £130 (band E) up to £1,120 (band M). Low emission cars in bands A-D on the other hand do not pay road tax. Check the cost of your car in the table below:

 

 

Government Drive To Remove Petrol and Diesel Cars

As part of its “Road to Zero” plan, UK policymakers are clamping down on petrol and diesel cars – to such an extent that older cars could be banned from the road entirely.

In radical proposals commissioned by the EU to fight air pollution, diesel cars have been placed into a new system that tests energy efficiency and the quantity of emissions.

Plans to remove older cars from the road were initially introduced by under EU legislation, but the conditions are likely to remain in the UK after Brexit.

The government has promised that at least 50% of new cars on UK roads will be low-emission hybrids or fully electric by 2030.

By 2050, the only cars permitted on the roads will be zero-emission vehicles.

Businesses that have been wrestling with the decision of whether to buy or lease a fleet of cars should be able to reach a decision much more easily now. The lawmakers have made the decision for you!

The crux of the matter is that business owners need to find a better way of managing their fleet of cars in order to reduce overall costs.

 

For more information, we’ve put together a FREE GUIDE which covers everything you need to know about calculating the cost of buying or leasing a fleet of cars.

FREE GUIDE: SAVE YOUR BUSINESS TIME AND MONEY

Our Free Fleet Guide will help you answer some of the following questions:

  • What is the most cost-effective way to manage your fleet?
  • Should you rent them or buy them outright?
  • Is business contract hire including vehicle maintenance really worth it?
  • What are your obligations?
  • How should you train your staff?
  • What are your tax obligations?
  • How do you choose the right hire company?

At Toomey Leasing, our aim is to help our customers stay informed and manage their business vehicles more efficiently. Take control of your vehicle finances today and download our FREE Fleet Guide

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