BROKERS are facing the prospect of further cancelled orders or passing on rate rises to customers, as the coronavirus pandemic affects registrations.
With dealerships closed, dealers have not been able to register vehicles before the end of March. With VED changing to WLTP measurements from April 01, 2020, the knock on effect will be higher monthly rentals.
Graham Lincoln, director of Lincoln-based broker Key2Lease said:
“This cost will increase the average lease by a considerable amount as the Road Fund Licence will be divided over the term. This will result in unexpected increases in monthly rentals for the customer and unfortunately cancelled orders.”
There appears little brokers can do in the current circumstances. While MOT test periods have been extended six months during the COVID-19 crisis, there appears little leeway for cars that have been ordered but cannot be processed by dealers.
View from the chair of the BVRLA Leasing Broker Committee
Alan Carreras, chair of the BVRLA Leasing Broker Committee, and managing director of the Bridle Leasing Group, said:
“I think it’s regrettable that consumers and fleet operators alike are likely to see increases in their lease rentals through no fault of their own, we appreciate policy makers have many pressing matters to attend to; our hope is that this particular issue may lead to retrospective action once the current crisis has abated
“I think a more pressing issue that needs to be considered is the freeing up of vehicle movements. While the sector broadly supports the restrictions on movement imposed by the government, we would question whether a relaxing of these restrictions to come in line with our rental cousins might be considered.
“The leasing broker sector is a broad church and we service consumers, SMEs and often large fleets, some of which are considered critical to the current crisis. Only yesterday I heard of a case where a fleet of vans due to be delivered to a pharmaceutical supply company had been held up. It might be in everyone’s interests to see cases like this exempt from the restrictions so long as vehicle deliveries can be made in accordance with current guidelines.
“And on a slightly selfish note, the relaxation of movements would welcome relief as this could ease potential liquidity issues for all those involved in our supply chain.
“Whilst the support packages advised by the Chancellor in recent dispatches are a huge relief to a great number, our ability to generate income has, like so many since the outbreak, been cut off overnight, and until we are able to start delivering vehicles to end user clients many will have no other source of income.
“But like so many many stories being shared there is a great deal of support from leasing companies, suppliers and brokers sharing advice and resources in a stand of solidarity that we will face this crisis together, returning fitter and stronger, and for some perhaps a little more humble and caring toward each other.”
But home charging grant extended
While the MOT has been extended, we also noticed that the Lex Autolease website, along with its home charger installation provider PodPoint, have cancelled all installations during the current virus outbreak. However, the Lex Autolease website did say that the higher £500 grant would be paid despite the delay:
“The Office for Low Emission Vehicles and Pod Point have confirmed that anyone eligible for the £500 installation grant will still qualify despite the installation being delayed past 1st April.”
Post Budget 2020 the amount of the home charging grant had been reduced to £350.
For those broker customers expecting installation before the beginning of April, this is welcoming news.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.