Lex Warns Fleets To Order Euro 4 Diesels Early

Drivers tax bills will increase by a few hundreds pounds if their Euro 4 diesel is registered after 31 December 2005.

Lex Vehicle Leasing is writing to all of its fleet customers in the next week to encourage them to get their diesel orders in early - well before the 3% Euro 4 diesel waiver legislation changes on at midnight on 31st December this year.

Lex is worried there will be huge pressure on car makers to increase Euro 4 diesel production in the run up to year end, which they won’t be able to meet in time, with drivers being faced with higher tax bills.

"With many car makers suffering from reduced supply of Euro 4 engines because of shortages of particulate filters, there is already a backlog of orders for some Euro 4 models," explained Steve Jones, Lex Vehicle Leasing’s pricing manager.

"With the added demand by companies to get their drivers into Euro 4 cars registered by the end of the year, there could be many cars that don’t meet the 3% waiver cut-off point. This will lead to drivers being faxed with higher tax bills," he added.

The difference for some drivers between driving a Euro 4 diesel registered in 2005 compared to 2006 over a typical three year contract ranges between £600 and £1400 on a typical fleet car.

Lex has estimated that around 100,000 drivers taking delivery of a new company car in the first quarter of 2006, could be looking to bring their order forward to the end of 2005. Based on these estimates it believes the impact on the car market could well be greater than anyone anticipates.

"Car sales in 2005 have been noticeably slower than 2004, but if 100,000 orders are brought forward from the first quarter of 2006 into the last quarter of 2005 the car industry could be heading for another strong year," explained Jones.

"However, before car makers start getting excited these 100,000 orders will be missing from the first quarter of 2006, which could indicate that car sales will be down next year," he added.

23 June 2005 Staff

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