Fleet News

Leasing heads look at Euro driving licence

HEADS of Europe's biggest leasing and rental associations held a face-to-face meeting to examine important future European legislation that could have an effect on tens of thousands of companies throughout the Continent.

Among issues discussed at the European Car and Truck Rental Association (ECATRA) plenary session, held in Spain, was the impact of plans to create a new European driving licence. Members heard that proposals to create a licence containing a microchip needed to be carefully examined, as it may lead to extra costs for leasing and rental companies, along with their consumers.

ECATRA executives are also examining the potential impact of a new European Directive designed to create standard levels of service in key industries, although it is not yet clear which businesses might be affected.

The meeting also heard that in the Netherlands and Belgium, rental companies had been thrown into turmoil by the announcement from a major credit card company saying that they couldn't charge customers for vehicle damage, without a signature authorising payment.

This would mean that if a vehicle was returned with damage while the rental depot was shut, it couldn't add the charge to the credit card bill, but would have to wait until it received a signature from the customer giving the green light to an additional charge.

They also discussed the impact of Basel II, which could mean that bank-owned leasing companies have to create massive reserves to offset potential liabilities on leases, which would significantly push up the costs of monthly rentals.

Currently, that would mean accounting for 100% of the vehicle's value, but ECATRA is campaigning for a car's residual value to be taken into account, to reduce the amount of cash that has to be set aside.

Discussions are continuing on the impact of any move to force companies to move contract hire vehicles onto the balance sheet and there is also continuing discussion about the 6th Directive which impacts on the way companies account for VAT.

Moves to introduce electronic tolling schemes will mean that a standardised European system should be in place by 2009, with a scheme for cars to be in place by 2011.

The scheme aims to ensure that where tolls are introduced, drivers will only need one unit in their car, wherever they go in Europe, and will be able to pay electronically at all tolls, rather than queueing and causing congestion.

A spokesman at the meeting said: 'The industry is facing a lot of important issues in the future.'

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