Stan Ayling, the Inland Revenue's head of commercial operations, said: 'Cars above 1,400cc are not paying their way, and are losing half their value in 11 months.' This depreciation is outstripping the £700 per car saving achieved by selling cars in under a year while their warranty is still valid.
As a result, the Inland Revenue is moving towards a two-tier system in which smaller cars will be fast-cycled and larger cars kept for longer periods. 'A fast cycle policy is a question of being flexible,' said Ayling.
'If I put the 1.4s on an 11-month cycle and the rest on a two-year cycle, I can still change if the market changes. Drivers love changing their cars once a year, and in the public sector, where you cannot give people perk cars, there is still a 'perk' in having a new car every year even if you are paying the full cost.'