13th November 2017 by John Meadowcroft

The British Vehicle Rental and Leasing Association (BVRLA) expressed its dismay recently when London Mayor Sadiq Khan announced the introduction of an Ultra Low Emission Zone (ULEZ) in central London from April 2019.

 

Not just the BVRLA in fact; several organisations have voiced disapproval over the Mayor’s decision which will charge drivers a fee of £12.50 per day alongside the existing congestion charge (CC) fee of £11.50 if they’re not compliant with European emission standards.

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Petrol vehicles need to comply with Euro 4 emission standards and diesels with Euro 6 standards within the ULEZ. Those that don’t pay the penalty charge of £12.50 will be subject to a penalty charge of £130 in addition to any LEZ or CC penalty charges, according to the Transport for London website, which can be reduced to £65 if paid within 14 days.

The plans to introduce ULEZ have been in place for a while, but the Mayor’s decision to bring them forward 17 months and implement them in early 2019 as opposed to late 2020 is set to hit drivers hard, especially those driving commercial vehicles that regularly pass through the area.

Commenting on the decision, Chief Executive of the BVRLA, Gerry Keaney, says: “The ULEZ will now come into effect seventeen months earlier than originally planned and many commercial fleet operators will face a big financial challenge in trying to upgrade their vehicles ahead of schedule.

“Many of these operators will be small and medium sized businesses that rely on buying second-hand vehicles from larger fleets and can’t afford to go and buy a whole new Euro VI fleet at short notice.”

At the same time, the Freight Transport Association’s head of policy for London, Natalie Chapman, has added her voice against the timing of ULEZ, saying: “By April 2019 there will only be two-and-a-half years’ production of vans available for operators to purchase, with little or no compliant second-hand market which will put pressure on operators already working to fragile margins.”

That lack of Euro 6-compliant vehicles is set to be the main problem amongst commercial drivers and business owners. Euro 6 vans – designed to meet EU regulations by reducing nitrogen oxide emissions amongst others – were only introduced toward the end of 2016, meaning pickings will be slim for businesses looking to invest in a fleet of used commercial vehicles by early 2019.

Similarly for cars, too, with Euro 6-compliant cars hitting the market a year earlier, around September 2015. By the time what is the world’s first ULEZ zone is introduced in London in April 2019, commercial drivers will have to choose between vans and cars that have only been around for two-and-a-half and three-and-a-half years respectively.

The better prepared businesses are for the incoming ULEZ charges, the more in-line they’ll be with European emission regulations, helping them to avoid what many are calling sky-high fines alongside the existing congestion charge.

As there are likely to be a shortage of used, compliant vehicles around when the ULEZ comes into force, leasing a new car or van can go a long way to easing cashflow burdens for businesses that regularly commute to the capital.

Balgores Leasing is able to provide businesses of any shape and size with incredible offers and bespoke deals on vehicles meeting Euro 6 emission standards, whether you’re looking to invest in a single vehicle or a fleet for your drivers.

Consider, too, that if a business, or private individual, has leased one of the last Euro 5-compliant diesel cars on a four-year lease from September 2015, it will be subject to the ULEZ charge for the final six months of the contract. This will also be true for those who have leased a Euro 5 diesel van from late 2016. Those on a three-year lease will be subject to the ULEZ charge for the final eight months of their contract; 20 months if they’ve opted for a four-year lease.

Balgores Leasing can offer advice on the best way to settle leasing contracts early, and also help to organise new, more cost-effective arrangements for vehicles that are ULEZ emission-compliant.

Our expert team is also always on hand to help advise your business on European emission regulation to help your business achieve compliance and reduce your commercial carbon footprint, whether you’re based in the capital or further afield.