UK fleets are being warned to review their policies to prepare for the impact of new European fuel consumption and emissions tests.
The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) replaces the outgoing New European Driving Cycle (NEDC) and is designed to provide results that are much closer to real-world figures.
Experts believe it will result in official CO2 figures rising by about 30% for some cars, with fuel economy declining.
While this benefits fleets because it provides a clearer picture of real-world vehicle running costs, it will also impact tax bills.
Vehicle excise duty, company car tax and taxes on fuel perks are all based on CO2 emissions in the UK, which means fleets and drivers could see their costs rise without a review of fleet policies.
Shaun Sadlier, head of consultancy at Arval, said: “The adoption of WLTP is just starting to get underway and the first manufacturers are releasing their figures under the new test.
“By September of this year, all cars on sale must have certification and, from the start of 2019, manufacturers will have to use WLTP figures in all their marketing and promotional material.
“This is something that is happening now and has definite implications for fleets in various areas. Most importantly, because MPG and CO2 emissions figures form such an important element of drawing up choice lists, it could affect which vehicles fleets choose to run.
“Our experience so far is that awareness among fleets is patchy and some are being slow to recognise the implications of the new test. They tend to know about WLTP but not about its imminent arrival nor about the potential impact it could have.”
The most immediate problem facing fleets is simply to ensure that when they are looking at figures for a particular car, they know whether they are NEDC or WLTP statistics.
Sadlier added: “If you are comparing different vehicles, you need to ensure that you know what you are looking at and that any decisions are being made on a like-for-like basis.”
The second key point stems from the fact that the UK government plans to start using WLTP figures for all vehicle taxation from 2020.
Sadlier said: “While this is more than two years away, it is well within the typical life cycle of fleet vehicles that you are buying now. You need to be thinking about the potential impact.”
Arval is creating a comparison tool to model the impact of the new test results on wholelife costs and driver taxation.
Despite the challenges, Sadlier welcomed the change in emissions testing, as it will provide a more accurate picture of vehicle performance for fleets.
He said: “Overall, we believe that that the arrival of WLTP is a hugely positive development for fleets, giving them easy access to fuel and emissions data that is much more meaningful.”
Fleets are having to adapt to a several changes that affect procurement policies in the coming years, particularly when it comes to shifting attitudes to diesel.
The government has introduced a range of measures to discourage the fuel, including changes to road tax being introduced in April which will see the levy for some diesel cars increase by £500 in the first year.
The initiatives have seen fleets begin a broad shift back to petrol vehicles that tend to have higher emissions than equivalent diesels, which could push up running costs and tax bills.
The latest Quarterly Leasing Survey from the British Vehicle Rental and Leasing Association shows that average CO2 for a new lease car rose to 112.7g/km in Q4 2017, the highest level since Q2 2015.
In addition, fleets are struggling to forward plan because the government has yet to publish company car tax figures for 2020 onwards. Vehicles are typically run on a three to four year replacement cycle, so fleets need long-term tax certainty for accurate forecasting.
The BVRLA has called on the government to recognise the importance of the fleet market in driving down emissions and has written to the chancellor of the exchequer setting out how a fair and well-signposted company car tax regime can encourage drivers to choose greener, cleaner vehicles.
It urged against planned increases in taxes for electric vehicles set to be introduced over the next two years.
BVRLA chief executive Gerry Keaney said: “Our members are keen to accelerate the uptake of newer and more efficient vehicles and are already responsible for the majority of plug-in registrations.
“They tell us that the current company car tax regime is making these vehicles less attractive to employees.
“We want to work as a constructive partner with government, delivering a rapid shift to zero-emission motoring, while recognising the need to sustain tax revenues.”