VEHICLE EXCISE DUTY (VED)
The Chancellor announced the removal of Vehicle Excise Duty (VED) for zero-emission cars with a list price exceeding £40,000, starting from April 2020.
Legislation will be introduced to extend the 100% First Year Allowances (FYAs) for low CO2 emission cars, zero-emission goods vehicles and equipment for gas refuelling stations by four years from April 2021.
Only zero emission cars will qualify for 100% FYA. Cars with CO2s of 1-50g/km will receive 18% WDA, whilst cars with 51g/km and above 6%. The new 50g/km threshold will also apply for determining the lease rental restriction for costs of hiring business cars for more than 45 consecutive days.
100% Leasing allowances on cars under 51g/km and 85% for 51g/km and above.
The Government will provide £403m for the Plug-in Car Grant, extending it to 2022-23. However, at the same time as extending the plug-in grant for electric vehicles, the Government has cut the plug-in grant rate for electric cars from £3,500 to £3,000, and excluded cars costing £50,000 or more.
EV CHARGING INFRASTRUCTURE
The Government says that access to high quality, convenient charging infrastructure is critical for drivers to make the switch to electric vehicles confidently. It has therefore announced £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles, ensuring that drivers will never be further than 30 miles from a rapid charging station. This will include a Rapid Charging Fund to help businesses with the cost of connecting fast charge points to the electricity grid.
The Government has announced the largest ever investment in England’s motorways and major A roads. The second Road Investment Strategy (RIS2) will spend over £27 billion between 2020 and 2025.
It will take forward schemes such as dualling the A66 Trans-Pennine and upgrading the A46 Newark bypass to address congestion, and building the Lower Thames Crossing to increase road capacity across the Thames east of London by 90%. >The Government is also investing £20m to develop the Midlands Rail Hub, progressing plans for a major programme of improvements to rail services across these regions.
The Budget announces a new Potholes Fund that will provide £500m a year, resulting in a 50% increase to local road maintenance budgets in 2020-21. Furthermore, the Budget confirms the development of 15 local road upgrades across the country, helping to reduce congestion.
Company car tax rates are frozen between 2023 and 2025. Fuel Duty has been frozen for another year.
Back in 1990, a young would-be entrepreneur had stepped out of a successful career with the north-east motor group Cowies and embarked on a self-employed career selling cars on finance. By knocking on doors at industrial estates and local businesses.
The Berlin Wall had fallen the year previously, and German reunification was on the cards; the Hubble telescope had been sent into orbit; and in the UK, Margaret Thatcher’s time as PM was about to close and recession was around the corner.
But that didn’t prevent Martin Wilson making his first deal: a Suzuki Super Carry on a finance lease to a florist - the sliding doors on both sides made them ideal for such trades.
That was the first of some 20,000 finance deals signed between the start of trading for Balgores Leasing and its 30th anniversary (on January 26, 2020).
While the company has grown in terms of staff - from one to 20 - it remains at its original site in Harold Wood, near Gallows Corner, in Essex.
Wilson says that first association with selling vehicles to businesses has underpinned the Balgores operation. For example, it now supplies 220 chiller vans to the biggest fish wholesaler in the UK, itself part of a 560 vehicle fleet that Balgores also manages. And while Balgores was happy just to sell a vehicle on finance in those early years, now it’s moving into fleet management for its clients.
But there have been changes in those 30 years. After all, the Ford Mondeo had not even been launched yet.
For the first time ever at Balgores, personal leasing outperformed business leasing in 2019. “When I first went to the US, I couldn’t believe that people had a personal lease. In the UK they were just for businesses. But during the last decade personal leasing has really taken off in the UK. I think that, along with the introduction of electric and hybrid vehicles, is one of the biggest changes I have seen in the 30 years I have been running the business,” adds Martin.
The change has also seen an upshift in the number of funders the business attracts as it has become more successful. Martin says that when he first started he struggled to find finance companies who would work with him.
“We were ahead of the game then. We didn’t fit into any of the categories that finance companies wanted to see. We didn’t have a showroom; we didn’t have a forecourt; no one understood what we were trying to do.”
The company’s consistent success over the last 30 years demonstrates how far-sighted Martin was. Balgores is now a member of the British Vehicle Rental and Leasing Association trade body and regulated by the Financial Conduct Authority. It now has access to seven different funders, providing the depth of financing options businesses and individuals now demand.
That success Martin puts down to always putting the customer first and providing first rate service.
“Many of those original customers from 30 years ago are still with us,” Martin continues. “And much of that success must be down to our staff. We ensure we take good care of our staff and their well-being which I think makes a big difference if you want to be customer oriented.”
Martin points out that many of his staff have remained loyal, in particular Treena King who first joined Balgores in 1996 and 24 years later is still central to the business. Keeping a steer on sales has been Steve Rayner (17 years with Balgores), Phil Slyfield (15 years) and Andrew Milliken (12 years).
While stability is core to Balgores, the brand is not afraid of change and is always ready to embrace new technology.
When Balgores started it was all about cold-calling companies; then it was advertising in publications such as Exchange & Mart; the fax machine then enabled so-called ‘fax attacks’; and now it’s all online with email marketing, a website, advertising on comparison sites and the use of algorithms to monitor the online market and attract new customers.
“We are not afraid of change,” says Martin. “You have to constantly reinvent yourself. It’s not what is happening now that’s important, it’s about what will happen next. I think that’s why Balgores has survived and prospered over these past 30 years. And just because we are celebrating a significant milestone in business, that doesn’t mean we are not constantly thinking ahead.”
It would appear Balgores Leasing is well-positioned to take on the next 30 years.
The electric car market is growing quickly, and with low-running costs, car leasing makes a lot of sense. Chris Lilly rounds-up the pick of the available electric vehicles.
The Passat is Volkswagen’s longest-running badge in its current line-up. More than 30 million have been sold since its launch in 1973.