Britain’s most successful car manufacturer, Jaguar Land Rover, joined Volvo in recently announcing their intention to only produce electric or hybrid cars by the end of the decade. This has heightened the sense that the sector is primed for a major acceleration in electric and hybrid proliferation over the short to medium term
What does this mean for you?
There are far-reaching impacts on the car you buy or lease this month, this year, and so on leading up to the death knell for combustion-engined cars in 2040.
In 2016, the hybrid and electric vehicle market made up less than 2% of the UK’s total new vehicle registrations.
Here are 3 key considerations Pike+Bambridge would recommend you think about before changing your vehicle.
1. Are you protecting yourself from the future residual value changes in the vehicle market?
Average used vehicle values have dipped in 2017 by as much as 18%, in part due to a problem of over-supply as the UK public increasingly takes advantage of low interest rates and subsequent cheap leasing offers.
This may be just the beginning. There are now major question marks over the governments tax plans for diesel and petrol vehicles, as well as ‘low-emission zones’ mooted for several major cities.
There is also the element of a new ‘cool’ brand entering the mass-market, with Tesla launching its first Model 3 in 2018. One only needs to look at the impact of Apple’s iPhone on companies such as Nokia to see the potential for major disruption in the high-volume, mid-priced car market.
All of this suggests the traditional method of purchasing a car outright has new risks attached. That being said, which of the myriad of other options should individuals and businesses select? The answer perhaps lies with engaging with independent expertise, whether that be through online research, or a firm such as Pike+Bambridge whose mission is to help change the way the world buys cars, with an advocate by your side throughout the increasingly complex process.
2. If you are considering a low-emission vehicle for yourself or your business, have you maximized the government assistance you can access?
The UK government continues to support electric vehicles through various tax measures, with both lower company car tax costs for such vehicles, as well as continued support through write down allowances for purchasing new low-emission vehicles for businesses.
In Scotland, this is combined with the Energy Saving Trust’s support of up to £35,000 interest free loan for a low emission vehicle for businesses looking to improve their carbon footprint.
There are also grants for businesses to help with the cost of installing charging points at commercial premises.
3. Is a low-emission car practical for you?
Whilst much of the above is attractive, there are still a number of factors that can make switching to low-emission or electric vehicles untenable in the current environment.
You should consider whether you have space/budget for charging stations at home and at work as this certainly makes a big difference.
If you do a high annual mileage, it is likely that, for now at least, the diesel engine cars remain your best option. Hybrid cars do not return anything like the published figures for high mileage uses, and the charging infrastructure for fully electric cars is simply not available in terms of the ‘fast charging’ units.
All in all, the next 5 years represent an unprecedented shift in not only the manner in which we acquire our cars, but more fundamentally, the shift to an entirely new technology, for the first time since the advent of cars over a century ago.
This represents both risks and opportunities, and we advise individuals and businesses alike to engage with independent experts before making their next vehicle acquisition.