LCV Week: How will double cab pick-ups be classed?
Never before in my living memory and 25 years in this industry have so many factors lined up to influence the fortunes of new and used vans.
In this series of blogs I consider the latest acronyms to hit our industry ULEZ, CAZ, WLTP and RFL to name a few. One thing is for sure, there are more questions than answers and it’s going to be a fun few years!
I’ve been saying for some time that the double cab pick-up sector is one to watch. With every mainstream OEM now playing in this sector, with historic volumes registered ramping up, the popularity of this sector is clear.
It is openly acknowledged now that HMRC are reviewing specific CV’s for a BIK review, the majority being high specification lifestyle 4x4 pick-ups (but also cab-in panel vans). The logic is that their specification puts them on a par with executive and premium cars. I believe the Government has to be very careful in this area. For one they must carry a tonne to be classed as a CV, no executive car is engineered to do that. I would suggest, without being disrespectful, the suspension set up alone does not give these CVs a car like ride or driving experience. Whilst they may be used for leisure purposes out of working hours so too can any van. These vehicles are not the lightest, and therefore not the cheapest to run. When combining BIK, WLTP and the current RFL consultation - this triple whammy, If it were to combine, would severely impact this popular sector.
So to the current Government consultation on CO2 banded van VED. Unless I am missing something it’s not about downsizing as it is in cars to smaller more fuel efficient and low emitting models. A commercial vehicle is bought for one thing only – its ability to carry a payload and do a job. The nature of that payload determines the size, shape and GVW. Van operators don’t have an alternative to swap to petrol or alternative fuel. Diesel suits their operations.
I believe VED for LCVs is viewed by operators in the same light as fuel price; it’s a background running cost that is generally accepted. I also believe that cost should remain fixed. It shouldn’t penalise an operator that correctly specifies a vehicle for the job. I believe it should remain fixed as WLTP will force manufacturers to address engine efficiencies and the Government is already financially penalising pre-Euro 6 van and truck operators through the rollout of CAZs (a national zone has to be their ultimate goal, Wales and Scotland are already considering it).
There is logic to say, as in the 4x4 and prestige car sectors, that new buyers currently just wrap up the VED costs in the funding and if they can afford the car then the first year and subsequent taxation fees are largely inconsequential. Manufacturers and dealers can offset by discounting the transaction price; logically this will happen anyway to “shift” any challenging configurations into the market. However, considering the HMRC’s current BIK review for “executive” specifications on these lifestyle double cab pick-ups – when combined with WLTP for new or used Pre-Euro 6 examples - how many business users who dual purpose these vehicles for work and play (using the vehicle as a family car on weekends and evenings) will want to swap out and separate their car from van? I believe extending car BIK to this sector of commercial vehicles would be harmful. I believe this will be further compounded by higher RFL rates and first year registration fees.
It is openly acknowledged now that HMRC are reviewing specific CV’s for a BIK review, the majority being high specification lifestyle 4x4 pick-ups (but also cab-in panel vans). The logic is that their specification puts them on a par with executive and premium cars. I believe the Government has to be very careful in this area. For one they must carry a tonne to be classed as a CV, no executive car is engineered to do that. I would suggest, without being disrespectful, the suspension set up alone does not give these CVs a car like ride or driving experience. Whilst they may be used for leisure purposes out of working hours so too can any van. These vehicles are not the lightest, and therefore not the cheapest to run. When combining BIK, WLTP and the current RFL consultation - this triple whammy, If it were to combine, would severely impact this popular sector.
So to the current Government consultation on CO2 banded van VED. Unless I am missing something it’s not about downsizing as it is in cars to smaller more fuel efficient and low emitting models. A commercial vehicle is bought for one thing only – its ability to carry a payload and do a job. The nature of that payload determines the size, shape and GVW. Van operators don’t have an alternative to swap to petrol or alternative fuel. Diesel suits their operations.
I believe VED for LCVs is viewed by operators in the same light as fuel price; it’s a background running cost that is generally accepted. I also believe that cost should remain fixed. It shouldn’t penalise an operator that correctly specifies a vehicle for the job. I believe it should remain fixed as WLTP will force manufacturers to address engine efficiencies and the Government is already financially penalising pre-Euro 6 van and truck operators through the rollout of CAZs (a national zone has to be their ultimate goal, Wales and Scotland are already considering it).
There is logic to say, as in the 4x4 and prestige car sectors, that new buyers currently just wrap up the VED costs in the funding and if they can afford the car then the first year and subsequent taxation fees are largely inconsequential. Manufacturers and dealers can offset by discounting the transaction price; logically this will happen anyway to “shift” any challenging configurations into the market. However, considering the HMRC’s current BIK review for “executive” specifications on these lifestyle double cab pick-ups – when combined with WLTP for new or used Pre-Euro 6 examples - how many business users who dual purpose these vehicles for work and play (using the vehicle as a family car on weekends and evenings) will want to swap out and separate their car from van? I believe extending car BIK to this sector of commercial vehicles would be harmful. I believe this will be further compounded by higher RFL rates and first year registration fees.
At the other end of the spectrum, with HGV, the rule of thumb is the more weight and the more axles on the road the higher the RFL, with a 44 tonne 3 axle artic and 3 axle trailer paying £700. A sub 3.5t Euro 5 LCV pays 20% of that. There could be an argument to review LCV upwards based on GVW but god forbid an unscrupulous operator being incentivised to swap into a small van with lower CO2 and GVW then doing the job of a big van. I remember a story where the DVSA (VOSA as was) pulled over a 3.5t LWB high roof panel van which, on the weighbridge, came in at over 9 tonnes; it was stacked full of carpet.
The biggest threat is if these CO2 RFL standards were ever backdated; seen previously in the car market before being reversed, where an 8 year old family MPV cost more to tax than a premium 4x4 in its second year. The demand and values of pre-deadline vehicles strengthen and those registered immediately post deadline soften. It doesn’t make them unsaleable, just a more challenging proposition; a short term bubble. Thankfully the Government have ruled that out. As I said earlier the CAZ and ULEZ will target the existing older higher polluting vans.
Share the CV Love
James Davis
