Meridian Vehicle Solutions has called on the vehicle rental sector to unite to urge the Government to reform Vehicle Excise Duty (VED).
The company believes the current method is “unbalanced” and the system of having a first-year registration charge disproportionately affects the rental sector.
It also feels the rebate system for vehicles that are sold with VED outstanding is also open to question.
Phil Jerome, managing director at the medium-term rental specialist, said: “The daily rental sector performs a crucial role in the economy, supporting businesses, tourists and consumers, while also providing a regular, sustained market for new cars.
“However, the nature of our business means that a lot of our stock is sold at less than 12 months old, so the initial registration charge, which runs into hundreds of pounds for most mainstream rental cars and can add up to thousands per vehicle, unfairly affects us.
“The charge is designed to be paid as part of the purchase of a new car that is then retained for some time but, frequently, this is not how the rental industry model works.”
Jerome added that the rebate system on used vehicles also needs urgent re-examination.
He said: “Effectively, you can potentially pay £2,070 for a first-year VED and only receive a rebate of £11.66 per unused month when you sell the car. In no way can that be justifiable.”
Jerome called on the rental sector to unite to place pressure on the Government in order to urge reform of the VED system, either completely or in its application to rental.
He added: “There is perhaps a tendency in the rental sector to think that VED is a necessary evil that cannot be changed and certainly it is difficult to get governments to alter their views in this kind of area, but we could at least speak with one voice and raise our concerns.
“Certainly, as more hybrids and EVs make their way onto the market, it is perhaps inevitable that the VED system undergoes further reform in the not-too-distant future, and we should be ready with a coherent view and recommendations.”