Fleet News

BT halts car buying - moratorium on company cars to weather residual value storm

ONE of Britain's biggest fleets, BT, has halted the purchase of new cars for its staff amid continuing confusion over the future of new car pricing and collapsing used car values.

The move by the outright purchase fleet, which has 16,000 cars and 35,000 vans, comes amid a flurry of price-cutting by manufacturers which has re-ignited fears about the impact on residual values, following Friday's introduction of the Government's Supply of New Cars Order 2000.

Used car values are already touching record lows after more than a year of attacks on new car prices by the Government and pressure groups, culminating in the Order. Amid the furore, BT announced that staff due for new company cars will have to wait until April next year in a move from a three-year to four-year replacement cycle. The extension allows BT to weather the storm of uncertainty over prices and residual values and to make more definite financial predictions on the cost of running its fleet ready for the new tax year.

BT has its own team selling vehicles direct to the trade and to existing company car drivers. As part of an overhaul of fleet policy, the telecommunications giant will also review its fleet choice list to prepare for the arrival of CO2-based company car tax in 2002. The moratorium on car replacement is expected to affect several hundred drivers out of a total of 16,000, although BT refused to release exact figures. The firm insisted the move did not affect its 35,000-strong van fleet and said drivers would have the option of keeping their current car, or opting for a cash for car scheme.

A spokeswoman said: 'As anyone in the fleet industry knows, this is not a good time to be buying new cars. This is not any sort of move against company cars. They are still a key part of our reimbursement policy. However, while the issue is under review, we are not replacing company cars due for renewal until April. This will affect hundreds of cars, rather than thousands.'

The firm said that the move did not affect its relationships with current suppliers, with Vauxhall and Ford the largest by volume.

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