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Letters to Fleet News’ editor Martyn Moore.

Work together for best solution

Reading “Replacement car scheme warning” (November 6), the service described is “intervention hire” not credit hire.

Effectively, intervention hire is where a vehicle is offered to the driver by the at-fault insurer, whereas credit hire would be provided by a direct supplier partner of the fleet.

The primary difference here will be the understanding of each party as to the precise need of the fleet and certainty (contractual in credit hire) over the vehicle specification, roadworthiness etc.

Priorities should be to establish the fleet’s precise need on a case by case basis, then align the correct vehicle type and specification.

These requirements are often very specific.

For example, Chapter 8 of the Highways Agency regulations stipulate the precise specification of a vehicle for it to be allowed to be utilised in road maintenance work.

Having found such a provider, the real value added approach for fleets is working together to determine the most cost-
effective method of providing a replacement vehicle, including offering credit hire to provide cash flow advantages, intervention hire to provide cost containment benefits or straightforward daily rental.

Not all suppliers will offer all replacement car options and so aren’t always providing the operator with the best solution to meet their requirements.

STEFAN SMYTH
Director, Total Accident Management

Smaller firms can benefit

While understanding GE Capital’s rationale for moving away from the smaller end of the fleet market, “GE Capital moves out of small fleet sector” (November 13), many of these customers will surely be wondering if they will find themselves in a similar position in the future should they move to another leasing company.

With overheads being a key issue for everyone, some major leasing companies without an effective route to market for SMEs may well take this opportunity to follow suit and, as a result, many customers may well look for alternative funding methods.

This sector does, however, represent a huge opportunity for the smaller leasing companies, many of whom have the ability to provide a dedicated account manager and offer a personalised and friendly service.

JEFF EDWARDS
National sales manager, Toomey Eurolease

Concern over capital allowance misunderstanding

I am concerned that there appears to be considerable misunderstanding about the impact of the proposed capital allowance changes which come into effect in April 2009.

The new rules introduce two pools of vehicles – one with
sub-160g/km CO2 emissions in, and those with emissions above 160g/km in the other. Capital allowance relief will be calculated on the value of the pool.

At present, relief arises year-on-year with a balancing allowance to give relief for any further depreciation in the year of disposal.

Under the current rules, if a car is owned for four years, then relief is given for the four years of actual depreciation.

With the proposed changes, it would take 43 years for that same relief to arise.

The impact of this delay in relief means that the lessor will be out of pocket.

These costs need to be built into the calculations and from April 2009 the cost of leasing will remain unchanged or increase.

I cannot see the expected substantial reductions in cost.

ALASTAIR KENDRICK
Director, employment tax services, Mazars LLP

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