What the WLTP is going on?

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One of the most significant changes to affect the vehicle industry in many years is the introduction of WLTP.

September sees the introduction of the new Worldwide Harmonised Light Vehicle Test Procedure aka WLTP. Everyone has always treated vehicle manufacturers fuel consumption figures with a large degree of scepticism. At CBVC Vehicle Management, as we calculate actual fuel consumption for our fleet managed clients we have modelled Whole Life Cost/Total Cost of Ownership for our clients using the following:

  • Using 70% of the published figures for Diesel and Petrol vehicles and,
  • As low as 35% for high mileage hybrids

Even before the VW emissions “Dieselgate” scandal the EU decided to change the method in how fuel consumption was arrived at. With the new figures giving more realistic figures CO2 emission, figures have increased for each car.

The upshot is a huge amount of uncertainty, not surrounding actual fuel economy because vehicles will keep on doing the same mpg, however there is huge confusion for both drivers and companies.

The last budget saw changes to Benefit in Kind Tax and also Corporation Tax thresholds for Capital Allowances and Lease rentals offsets. These are driven by published C02 rates which under the new system have increased, substantially in a number of cases, and therefore affect drivers and company.

Due to the amount of re-testing required, many manufacturers have suspended building cars in the interim and whilst there is some stock around there is the likelihood of shortages leading to either a shortage of new cars or registration of old models NEDC by the end of August. Currently we cannot quote on a large number vehicles which are waiting to be tested.
This uncertainty leads us to several recommendations:

  • Consider extending contracts on current vehicles as their Co2 and hence BIK and CT offset will not be affected.
  • Consider Flexirent contracts for 6 months whilst the market settles down. A further 6 months will take us through the next budget when we anticipate some answers to future taxation.
  • Look at Re-Lease our used car offering which again have fixed Co2 and hence BIK and CT offset will not be affected. RDE/2 compliant vehicles should then be available in the market.
  • If available in your company scheme, take a cash allowance and look at Personal Contract Hire and ask CBVC to run a cost comparison for you.

For more information contact your CBVC Account Manager.