25/08/09

Tax changes coax drivers out of 4x4s, says Masterlease survey

The company car market is leading the charge towards greener vehicles on the UK’s roads as a new survey reveals fleet drivers are steering away from the ‘gas guzzlers’ in favour of lower CO2 models.

Leading fleet provider Masterlease, which looks after more than 60,000 company cars in the UK, has found that the industry has seen a significant shift in the emissions levels of vehicles on Britain’s roads over the past three years.

Demand for lowest emitting vehicles has tripled in the last two years, according to Masterlease while the company has seen a six per cent drop in ‘gas guzzler’ orders.

Fleet vehicles are the newest and most up-to-date models available because they are used as a key benefit to entice the best candidates in an employment package. As such, they represent a future snapshot of the cars that will be on our roads as their technologies filter through to private drivers after their lease life.

The downward trend originally started with the first CO2—based company car tax in 2001, encouraging drivers to select lower polluting vehicles.

More recently, the Government accelerated the pace of change with stiffer Vehicle Excise Duty (VED) on so-called gas guzzlers, and in April this year it adjusted the rules on Corporation Tax which negatively impacted vehicles that emit more than 160g/km CO2.

In January 2007 the average Masterlease vehicle emitted 162.4g/km. This has steadily dropped to 153.9g/km over the past two and a half years and looks set to drop even more.

An overall shift can be seen in the vehicles that Masterlease supplies. Demand from customers has fallen for vehicles falling within the two highest tax bands, from 17 per cent of vehicles in January 2007, to just 11 per cent in April 2009. Conversely, the number of vehicles in the lowest brackets has trebled from two per cent in 2007 to seven per cent in April 2009.

“This is an interesting trend. If there was ever a clearer example of adjustments to the tax system driving driver or company behaviour, this is it, says Robert Kingdom, head of marketing for Masterlease.

“The trend is encouraging in terms of less polluting vehicles as they filter into the private car market. With the Government’s ‘Scrappage’ scheme as well, we can see UK’s roads forming a strategic part of a lower carbon economy, something that would have been unheard of a few years ago,” he adds.

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