Fleet News

RV warning over diesel sales boom

USED car values formed the heart of a major debate on the fleet industry organised by vehicle funding and management specialist VELO, amid fears that increasing demand for diesel vehicles could damage their residual values.

The event, called 'Fleet Cost, safety and policy - defining the issues' took place at the Ford College at Loughborough University and was aimed at helping fleet decision-makers with some of the most important issues they will face this year.

At the event, Ramesh Notra, economics editor for CAP Network, said that since 1995 vehicle list prices had fallen by an average of 10%. He also predicted an increase in the market share of diesel vehicles over the coming years, bringing the UK closer in line with European sales figures. However, he warned this may impact on future residual values.

Sales of diesel vehicles to fleets have rocketed by more than 50% as company car drivers look to reduce their benefit-in-kind tax bills under the new carbon dioxide-based benefit-in-kind tax regime.

Industry experts have predicted there could be 150,000 ex-fleet diesel cars hitting the used car market by 2004/2005.

Also at the event, Richard Dykes, former chairman of the Work-related Road Safety Task Group, urged fleet operators to incorporate a comprehensive health and safety strategy into fleet policy.

Alastair Kendrick, director of PAYE and NI Solutions at Ernst and Young, examined the future development of tax-efficient employee car ownership schemes.

The event was the fifth in VELO's regular programme of business seminars. VELO chairman and chief executive, Nigel Stephens, said: 'This is a time of great change for fleet operators with developments and alterations in many areas.

'In the light of these changes, UK firms are being urged to reassess fleet policy and provision, in order to engineer the right financial and human resource strategies. 'It is vital that fleet operators seek expert advice when reviewing their position or changing fleet policy and our business seminars provide an ideal forum.'

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