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WLTP? Who needs more initials?

By Ross Williams

Alpha Contracts Leasing Ltd

BUT what does it stand for? ‘Who leased the Porsche?’ ‘Why lease the Passat?’ or ‘Who (doesn’t) love a trouser press?’

Boringly, WLTP stands for the Worldwide Harmonised Light Vehicle Test, and just what is that I hear you ask? And more importantly why are you boring me with this information?

Why? Because over the next six months or so the new car market will be dominated by the problems in the manufacturing sector being caused by the introduction of WLTP in the UK on September 1 2018, which is already having an adverse effect on new vehicle supply with some manufacturers actually closing order books for a short while.

Vehicle emissions and fuel consumption figures used to be calculated using the New European Driving Cycle (NEDC) which was designed in the 1980s. Due to evolutions in technology and driving conditions, it has become outdated, and dare we suggest open to manipulation by manufacturers. The European Union developed a new test, called the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). While the old NEDC test determined emission and fuel consumption values based on a theoretical driving profile, the WLTP cycle was developed using real-driving data, gathered from around the world. WLTP, therefore, better represents everyday driving profiles.

The result of applying WLTP means more accuracy in the figures, but unfortunately for a company car driver that means their measured CO2 will increase, because the previous test understated the figure. This increase is expected to be in the region of 15 per cent, so if your current car had a CO2 of 99 gms the new version of the car will have a CO2 of about 114 gms. In real terms this would increase the amount of tax paid on your company car by about three percentage points in the BIK table. For a basic tax payer this could mean paying anything upwards of £150 per annum more.

The tax position will not change for current cars but going forward it makes the choice of your next new car more important, and perhaps it would be an idea to choose your replacement and try to get it delivered before September 1 this year to take advantage of the current CO2 ratings.

Look out for next month’s column and see what more fallout the WLTP effect will cause.

For advice on all car and van funding options why not speak to one of the team at Alpha Contracts Leasing and we can provide advice about your choices, where each type of fuel fits in your fleet and how the Benefit in Kind tax rules affect your choice of vehicle. Call us on 01604 756620.

Safe motoring

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