Jo Tacon
The government’s announcement of a
subsidy of up to £5,000 for buyers of low-carbon cars was welcomed
cautiously by the leasing and motor finance industry.
Go deeper with GlobalData
The Department for Transport (DfT)
said the grants would cover up to 25% of the cost of “eligible
electric, plug-in hybrid and hydrogen cars” to a maximum of
£5,000.
The DfT added: “The grant will be
available at the point of purchase directly from the dealership or
manufacturer, so consumers will not be out of pocket or have to go
through a separate application process.
“It will work in a similar way to
the government scrappage scheme; except that you will not have to
scrap your old car.”
GE Capital said that the incentive,
which will be introduced in January 2011 and run until 2014, is
“welcome news”, but that it will have a relatively small impact on
fleets.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIts recent Company Car
Trends report found only 2% of fleet vehicles are electric,
and that alternatively-fuelled vehicles will continue to be
“marginal” in the “short to medium term”.
Concerns over range and recharging
infrastructure also play a part in impeding fleet take-up of
electric cars in most circumstances. But the report also found 54%
of fleet managers list environmental concerns as “an important
consideration”, with 28% investing in hybrid vehicles.
On the retail side, meanwhile,
there is confusion about how the scheme will be administered.
Steve Gowler, managing director of
RCI Financial Services, said: “I am not aware at this point in time
as to the exact mechanics of how this £5,000 government
subsidy/incentive will be administered.
“Assuming it is paid to the
manufacturer who then in turn deducts it from the vehicle invoice
[as per the scrappage scheme] then any financing would be net of
the £5,000.
“If it is somehow paid directly by
the government to the customer then I guess it would be up to the
customer whether or not they wanted to use it as a deposit on any
finance agreement.
“We will have to watch this space
to see the detail of exactly how it will work and this will be the
subject of discussions between the government and the manufacturers
over the next few months.”
Gowler added that RCI is currently looking into various options
for financing electric cars, but was unable to give further detail
on whether finance arrangements for electric cars would differ
substantially from those for conventionally-fuelled vehicles.
