fleetwise newsletter

QUARTERLY REVIEW SUMMER 2017

  1. CLOUDS ON THE HORIZON IN MOTOR FINANCE
     
  2. WHY LEASING CARS IS GOOD FOR THE COUNTRY
     
  3. VOLVO SHOWS THE WAY

CLOUDS ON THE HORIZON IN MOTOR FINANCE

The Financial Conduct Authority, in its new business plan, has revealed its intention to investigate the vehicle finance market. It will look at current methods of funding and the administration. The FCA expressed the view there may be a lack of transparency as well as potential conflicts of interest. But it was its third point which triggered warning bells with lenders, namely the FCA's view that there may be irresponsible lending in the motor finance industry.

We all know where 'irresponsible lending' ends up, payment protection insurance and the like.

The FCA will "conduct an exploratory piece of work to identify who uses these products and assess the sales processes, whether the products cause harm and the due diligence that firms undertake before providing motor finance."

Following this review the regulator will assess whether and how to intervene in the market. You have not heard the last of this.

WHY LEASING CARS IS GOOD FOR THE COUNTRY

Air quality is a matter of life and death. It is estimated that in the UK, poor air quality is responsible or contributes to the early deaths of 40,000 people each year. Lease cars now account for an ever increasing share of all new car registrations. Drivers have seen an affordable, easy way of financing a new car every few years with the result that the leased car fleet in total has lower CO2 emissions and a higher than average uptake of electric vehicles.

The average car on the UK car fleet of 30 million cars is eight years old. As a group they emit significantly more CO2 than the average leased car. Leasing cars saves lives.

VOLVO SHOWS THE WAY

Volvo Cars have announced that all the models it introduces from 2019 will be either hybrids or powered solely by batteries. It is the first mainstream car manufacturer to question the future of the internal combustion engine.

Volvo's decision is the boldest move by major car company to commit themselves to technologies which represent only a small share of the total vehicle market. Combating urban pollution is increasingly viewed as essential and Volvo have acknowledged the fact.

While most major manufacturers can offer hybrids and battery-powered options, no one has been willing to give up cars powered solely by petrol or diesel. Volvo's move is a brave indicator and a sign that a new era is on the horizon. In the United States, Tesla, which has made only limited numbers of electric cars, amazingly surpassed Ford and General Motors this year in terms of stock market value. It may be an indication of where investors think the industry is headed.

How big a risk Volvo has taken remains to be seen. The company evidently feels a much bigger risk would be to stick with internal combustion engines. It is also worth remembering that Volvo is owned by Geely Automobile Holdings of China, which already produces battery-powered cars for the Chinese market. It could give Volvo a head start , The decision by Volvo to focus on electric vehicles could ultimately give it and Geely a head start. Volvo's battery-powered vehicles will be produced initially in China, but eventually also in Europe and at a new factory currently under construction in the United States.

Cars that run solely on battery power are still rare in most countries because of high purchase prices, lengthy charging times and limited ranges. However, the advance of the self-driving car will also encourage a shift to battery power because it is simpler to link self-driving software to an electric motor than to a conventional engine.

Although no other traditional car manufacturers have declared their intention to follow Volvo and Tesla, virtually all of them are investing in hybrid and battery technology. We shall see.

THE QUARTERLY QUOTE

Skoda Octavia Diesel Hatchback 1.6 TDI Cr SE L 5dr

£199.00 per month Stunning Value
Business Users - Full Maintenance Contract Hire 3 Years, 10,000mpa, 9+35
Phone 01908 262662

Skoda Octavia Diesel Hatchback 1.6

For further advice, information or quotes call Oliver or Karen on 01908 262662

Vehicle Leasing and Contract Hire
2 Cosgrove Road, Old Stratford, Milton Keynes, MK19 6AF
T: 01908 262662 | F: 01908 262213 | E: sales@webcars.co.uk

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