WLTP on Contract Hire Vehicles – Will It Affect Me?

Posted on 20th April 2018 By Rob Nugent

Confused by WLTP? Not sure what it is? Is your leasing provider not really sure what’s going on?……………….read below or save yourself some time and get in touch with our experts on 01706 577040

Below is an email sent by our Sales Director to one of our regular fleet customers regarding the new WLTP tests which come in to effect from September 1st 2018.  The tests are new ways of measuring emissions which of course Road Fund Licence is now calculated on. However in many cases the tax position of both the company and company car driver will be changed – and in most cases not in a positive way!

The Transition from NEDC to WLTP – Brief Expansion

The New European Driving Cycle (NEDC) is the current testing procedure for engine emissions and fuel consumption has been in place since 1990 and was last updated in 1997.

This is being replaced by the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).

Relevant timelines at this point are as follows:

All vehicles manufactured after July 2018 must be certified to WLTP.

All vehicles registered in the UK after 01/09/2018 will need to be certified to WLTP but will also require NEDC equivalent emission figures which will be used to calculate first year Vehicle Excise Duty and Benefit in Kind. The NEDC equivalent figures are derived from the new WLTP test and may differ from current NEDC results due to them being more representative of Real World Driving.

Current HMRC plan is to use WLTP emission figures from April 2020 and at this point will be included in customer facing material.

Any vehicles manufactured that are not certified to WLTP must be registered by 31/08/2018.

As the majority of manufacturer order banks are already full for July production a lot have now been closed and will not re-open until vehicles have been tested to WLTP. The first to announce this was Jaguar Land Rover who closed their order bank early last week. A number are continuing to take customer orders, BUT, with the caveat that from order to delivery there is a likelihood that WLTP testing will have done and therefore it is likely that emissions will increase in turn affecting first year Vehicle Excise Duty and Benefit in Kind.

To this end many popular makes and models are closed for ordering. So at this point I am unable to offer valid figures but will monitor the position for you moving forward as I understand that as well as new emission figures there may also be a price increase.

What we Know So Far about WLTP

There seem to a lot of companies out there who are turning a bit of a blind eye to these changes, but we are trying to be as transparent and informative as possible.

I find it hard to believe that only Jaguar Land Rover have tried to communicate their changes and that NONE of the major funders have made any comment whatsoever.

Here are few actual working examples of the changes that WLTP has already highlighted

I have a Land Rover Discovery on order for a client which was initially ordered to coincide with his mid-September renewal date. This vehicle will be produced before the end of July, will not be certified to WLTP and therefore it MUST be registered 31/08/2018 at the latest. He isn’t ‘plate’ sensitive fortunately and happy to take it a couple of weeks early. It could have been a bit of a problem of course.

I have 2 x Lexus CT Hatchbacks that were ordered last month at which point the emissions under NEDC were 94g/km. They have since been WLTP tested and will come through with the new NED Equivalent 101g/km.

This has meant a slight increase to first year Vehicle Excise Duty which on this occasion Lexus have taken on the chin as timing was so unfortunate, BUT, the drivers will see a 2% increase in BIK.

Jaguar Land Rover have this morning announced that the Jaguar F Pace 2019 model year range has now re-opened for ordering, certified to WLTP with NEDC Equivalent emission figures. THESE ARE HORRIFIC. An example:

F Pace 2.0d 163ps RWD Manual

18 MY – 126 g/km

19 MY – 147 g/km (and 152 g/km with any alloy wheel upgrade)

The impact to driver’s clearly massive for this vehicle.

Relevant to Quotations Above

As time progresses, and hopefully almost daily, we will see the introduction of updated pricing and emission figures, but, at this point, save for the previously mentioned Lexus CT and Jaguar F Pace examples the good news is that the full BMW and Volvo rages are already certified to WLTP.

* This means that the BMW 5 Series figures are good to go, and we will not see any further change.

** The Mercedes E Class emission figures could change as they have yet to be tested. If they are like the BMW 5 Series, this will be around 5-7g/km, but we have no further indicative information, so this needs to be taken into consideration in your decision process.

I do hope that whilst this may be perhaps a touch mind numbing I have explained things in an understandable fashion but please do not hesitate to contact me if you/John would like to chat further.

 

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