Fleet News

Cash warning over new V5 legislation

FLEET decision-makers could leave their companies in a financial black hole unless they act on major changes to vehicle legislation introduced this week, experts warn.

From the start of February, a valid V5 registration document is needed to tax any vehicle as part of a Government initiative to combat vehicle crime.

But the move has threatened to wipe millions of pounds off vehicle values if fleets try to sell cars without a valid V5.

Already about 90% of buyers at auction have specific instructions not to buy any vehicle without a V5 logbook, warns Manheim Auctions. Andrew Shepherd, senior group auctioneer at Manheim Auctions, said that percentage would rise this month.

Yet on Monday, British Car Auctions revealed that almost 17% of vehicles sold were still being presented without a valid V5, although this figure had dropped from 30% at the start of January.

Used car experts Plex predicts that vehicles without a V5 could fetch 15% less at sale time, while Glass's Information Services warns the new rules will also create a two-tier market for used vans, covering those without documents and those that have them.

Tony Styles, senior editor of CAP Black Book, said fleets were still sending vehicles for sale without the right documents. He claimed finance companies which took residual value risk for vehicles being used by fleets were facing heavy financial losses.

He said: 'Cars without a V5 will be severely penalised in the used trade market. While the whole industry faces a challenge in getting vehicle paperwork in order, it is finance companies which are most at risk.

'This is because they have no physical control over the documents and will rely on operators to keep them safe.'

It can take up to six weeks to obtain a replacement V5, experts claim, which would mean a car depreciating on a forecourt for two months before it could be sold. Styles said fleets should consider postponing replacement cycles until they had the correct documents.

But he added: 'This issue was raised many months ago and if fleets are only realising they have to do something now, then they deserve to have problems. If you don't have your documents in place, then you could be in for a nasty shock.'

A spokesman for the Driver and Vehicle Licensing Agency said: 'Thieves often tax stolen vehicles to make them more attractive and appear legitimate to buyers.

'These changes are intended to stop criminals getting tax discs. We are telling drivers – don't buy a car without a V5.'

  • For details on the changes to vehicle registration legislation, log on to www.dvla.gov.uk.
  • Leave a comment for your chance to win £20 of John Lewis vouchers.

    Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

    Login to comment

    Comments

    No comments have been made yet.

    Compare costs of your company cars

    Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

    What is your BIK car tax liability?

    The Fleet News car tax calculator lets you work out tax costs for both employer and employee