It’s a load of scrap

The car scrappage scheme – it seems to doing rather well. It has stimulated car sales to the extent that we’re already halfway through the government’s grant allocation of £300m with orders reaching 154,927.

The majority of the ‘cash for clunkers’ has gone towards stimulating sales of smaller cars. Hyundai has done well with its i10 model, the manufacturer entering the best selling top 10 car makers for the first time ever in July.

Removing older cars – and vans – has also had the desired side-effect of lowering CO2 emissions (as well as providing drivers with safer cars equipped with anti-lock ABS brakes, airbags and, in some cases, anti-skid ESC technology).

According to the Department for Business, Skills and Innovation, new cars bought under the scheme have CO2 emissions that are 25% lower than the cars scrapped. The average CO2 figure for scrapped cars is estimated to be at least 179g/km, compared to a much lower 134g/km emissions average for cars bought through the scheme. In terms of company car tax, that’s equivalent to swapping a petrol car in the 23% company car tax category for one in the 15% company car tax band. That’s a big drop.

If you think you and your business could benefit from the £2000 incentive (£1000 each from the government and participating car makers), then it’s worth thinking about it fast before the funds are exhausted.

To qualify for the scheme, your existing car or small van (not exceeding 3.5 tonnes) must have been registered in UK on or before 31 August 1999 and currently you must be the registered keeper (and continuously for 12 calendar months before the order date of the new vehicle). 

The new vehicle can be a car or small van up to 3.5 tonnes and must be declared new at first registration in the UK with no former keepers.  It must be registered to the same registered keeper as the vehicle to be scrapped. Your local dealer will take care of the paperwork for you.

Clogged up diesel particulate filters

A friend of mine runs a small business called Turning Circle Solutions. I helped Tim, as I have before, with his choice of car. With two Audi A3s under his belt, Tim wanted a change and I helped him draw up a short list.

Eventually Tim settled on a rather plush Jaguar X-Type estate diesel.

So far so good. Until Tim’s Jaguar went into limp home mode one day. It’s the classic issue of the Diesel Particulate Filter (DPF) clogging up.

DPFs are useful because they remove most of that horrendous black tailpipe soot produced by diesel engines. However, as the soot collects, it also needs to burn off at a high temperature. This has to be done on the motorway where a consistently high speed generates the necessary heat for burn off to take place.

But, unless you mix your town driving with motorway work, then you could experience exactly the same issue as Tim. And a replacement DPF can cost up to £1000.

My advice is to consider what you need the car for before you place your order. Small businesses shouldn’t automatically consider a diesel is the best solution just because it has become almost the de facto choice for company car drivers on large company car fleets.

If your driving is mainly town or urban based then you would be much better off with an economical petrol car. If you do have mixed driving requirements, make sure you regularly combine longer journeys with the shorter ones. Otherwise you could come unstuck.

Like Tim.

Seat belt anniversary

Let’s hear it for seat belts. This remarkable life-saving device is now 50 years old. And our thanks must go to Volvo. And, in particular, Nils Bohlin.

Nils, an engineer, had been working for SAAB’s aero company where he had designed the catapult seat for the Swedish fighter aircraft J35 Draken. But then he was recruited by Volvo.

For Bohlin this must have been a radical adjustment: at SAAB his job was to throw people out of a speeding vehicle; at Volvo, his job was to keep people in their place.

In 1958 Volvo patent Nils Bohlin’s three-point safety belt. His design had four important properties: 1) The system consisted of a lap belt and a diagonal belt; 2) the belts were anchored at a low attachment point beside the seat; 3) the belt geometry formed a V shape with the point directed toward the floor, and; 4) the belt stayed in position and did not move in an impact.

In 1959, the three-point belt was launched in the Volvo Amazon (120) and PV 544, making Volvo the very first car maker in the world to equip its cars as standard with three-point safety belts.

According to Department for Transport research, annually about 565 people die in traffic accidents by not wearing a seatbelt. In 2007, over 300 of these might have survived had they been belted in. Combined with airbags, the 50-year-old three-point seatbelt is a major life saver.

So thanks Nils – and Volvo.

Ralph Morton

Editor, www.BusinessCarManager.co.uk

Business Car Manager is the business motoring magazine for small businesses. You can access it for free by logging on to www.BusinessCarManager.co.uk.

Using best practice is something we could all do better. But particularly, it seems, when it comes to being a small business and running business cars efficiently.

Even though a scary one in every 56 businesses will cease trading this year – an increase of 59% according to accountants and business advisors, BDO Stoy Hayward LLP – small businesses appear less inclined to follow some of the best practice from larger enterprises.

And while larger companies favour contract hire as a means of providing company cars, most small businesses are still wedded to the idea of ownership. And some 33% don’t even have a company car policy.

Now, while I’m a great believer in having and financing the cars that suit your business, I believe strongly that not all small businesses are aware of the alternative funding methods out there available to them.

For example, a canny small business might be quite happy purchasing used cars because: a) they save on the depreciation;  b) it provides them with an opportunity to have a smarter car than they could afford new. For example, my landlord, Peter Edney, runs his own small accountancy practice, but purchases used Mercedes. His latest is a very smart 11-year-old SL V8.

But I bet many small businesses aren’t alive to the fact that ownership of new cars ties up capital that could be more readily used in the business – especially now, when cash flows are so tight.

On the other hand, leasing a car – whether through contract hire or personal contract hire – gives you access to a brand new car for a fixed monthly sum, while keeping other lines of credit (bank loan, overdraft and so on) open for purely business use. At the end of the two-, three- or four-year term, the car is returned. And a new lease on a new car started. Small businesses should talk to their local dealer business sales or a BVRLA approved contract hire company for more on the benefits of leasing.

The forgetful zone

While we’re on the subject of research, I came across this from Continental Tyres: on average a third of most people’s journey will be zoned out. In other words, unaware or inattentive of the actual traffic conditions around them.

The research found the average driver is on the road for 45 minutes a day and that they are in their own little world for 17 minutes of this time. They make an average of three trips in their car each day. They are distracted at least three times on each journey and for at least four seconds each time. At just 40 mph a car will travel over 18 metres every second.

I spoke to Continental’s Guy Frobisher about the results. “Our fast-paced lives can mean little time to fit everything in, but driving is no time for multi-tasking,” Guy explained. “Our advice is to avoid distractions like eating or drinking or making a phone call, even if hands-free. You could prevent an accident.”

I couldn’t agree more.

For the record, here are the most common driver distractions. But the one that scares me the most is number 11. If your small business doesn’t have a company car policy – particularly for mobile phone use – then now is probably the time you should.

TOP 20 DRIVING DISTRACTIONS

1.     Re-tuning the radio/inserting a CD into the player

2.     Talking to a passenger

3.     Looking at scenery

4.     Eating

5.     Listening to loud music

6.     Reaching into the glovebox

7.     Looking at houses

8.     Drinking

9.     Other drivers in cars next to you

10.    Passengers asking questions

11.    Texting

12.    Trying to unwrap a sweet

13.    Talking on the mobile phone

14.    Looking at a hot girl/bloke

15.    Shop windows

16.    Kids in the back seat shouting, or playing up

17.    Trying to read a map

18.    SATNAV

19.    Looking at billboards

20.    Singing

Ralph Morton – Editor of www.BusinessCarManager.co.uk

Business Car Manager is a business motoring website dedicated to small businesses. You can access it for free by logging on to www.BusinessCarManager.co.uk.