Fleets are extending leases and turning to short-term hire in an effort to combat problems ordering vehicles due to the new emissions testing regime.
The situation has been described as a “nightmare”, with fleets saying cars are disappearing off price lists, while others are subject to extended delivery times thanks to a backlog of orders.
All cars are being transitioned to the WLTP (Worldwide harmonised Light vehicle Test Procedure), with newly type-approved models subject to the test since last September, while all other new cars must be rehomologated by this September.
WLTP replaced NEDC (New European Drive Cycle), which had been criticised for failing to represent real-world fuel consumption.
The Government has announced that WLTP CO2 figures will not apply to first-year vehicle excise duty (VED) and company car tax until April 2020.
However, it is not expected to reveal how it will help fleets mitigate the expected increase in CO2 from the new test until the Budget in November.
In the meantime, fleets are seeing vehicles that have undergone the new test being given a new ‘NEDC-correlated’ value that is, on average, 10% higher, putting some cars into higher benefit-in-kind (BIK) tax brackets.
Manufacturers, for their part, have attempted to play down the issue, but Volkswagen admitted earlier this month that its main factory in Wolfsburg, Germany, faces temporary shutdowns later this year, owing to the new emissions test.
It is planning “closure days” to prevent a build-up of vehicles that have yet to be approved for sale.
The manufacturer says it does not have enough testing equipment to cope and fears a backlog of cars will ensue.
At a meeting with unions, chief executive Herbert Diess admitted that meeting the new requirements and getting new cars approved for sale was proving a challenge.
“We will only build vehicles after the works holiday that fulfil the new standards,” Diess told staff. “The deliveries will take place gradually as soon as the necessary approvals are there, but many vehicles will have to be warehoused.
“To make sure their numbers don’t become too large, we will have to plan closure days through the end of September.”
The main rate capital allowance threshold and lease rental restriction both fell from 130g/km to 110g/km from April.
Meanwhile, the 100% first-year allowance threshold reduced from 75g/km to 50g/km from the same date, with the allowance applicable until March 31, 2021.