Fleet News

Fleet discounts in the clear as Byers announces new car price laws

FLEET discounts have been officially given the all clear with the publication of new legislation designed to cut car prices by up to £1,100. The Department of Trade and Industry has revealed a six-point plan for bringing down car prices in the UK following a lengthy investigation into the industry by the Competition Commission.

The Supply of New Cars Order 2000 calls for dealerships to be given the same volume discounts as fleet buyers and manufacturers will be banned from discriminating between private customers or fleet driver in the supply of cars to the contract hire industry.

The legislation is to be introduced by September 1, in time for the X-registration plate, which will bring a sigh of relief from an industry desperate for an end to the uncertainty before the plate change is introduced.The key points are:

  • It will be illegal for a supplier to discriminate between fleet customers and dealers which buy stocks of cars outright

  • It will be illegal to discriminate on the price charged to contract hire companies, depending on whether the customer is a fleet or private driver

  • It will be illegal to withhold supplies of new cars from a dealer on grounds relating to the price at which the dealer was selling the car

  • Bonuses for dealers based on the sales of pre-registered cars will be banned

  • Manufacturers will be banned from deterring any dealer from importing cheaper cars from abroad

The announcement ends a year of misery for the motor industry and uncertainty for fleets - but the industry remains deeply divided over the long-term effects of the order.

The legislation is designed to address claims of unfair practices by manufacturers, who were alleged to be overcharging private buyers to offer fleet buyers high discounts. But the order does not demand a specific fall in new car values and instead sets out a framework for providing a level playing field for all car buyers, both fleet and private.

The Order could mean a tax bonanza for fleet car drivers, as list price cuts will mean a fall in their BIK tax liability.

Stewart Whyte, director of the Association of Car Fleet Operators, said: 'It won't end uncertainty. It is completely based on list price. This is divisive and a needless waste of time and energy.'

Christopher Macgowan, chief executive of the Society of Motor Manufacturers and Traders, said: 'It is clear that common sense has prevailed at the DTI.'

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