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Conference terri::cars_uk

Title:Cars in the UK
Notice:Please read new conference charter 1.70
Moderator:COMICS::SHELLEYELD
Created:Sun Mar 06 1994
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:2584
Total number of notes:63384

1340.0. "Ban company cars!..help fix the UK economy." by UKCSSE::PARKERD () Mon Jan 14 1991 13:21

    
    Read an interesting article in the Economist last week which
    talks about company cars in the UK.
    They reach some conclusions which confirm suspicions I have
    had for some time. One of the topics is around UK car prices which
    are around 30% higher than on the continent. When pushed on this
    subject, the manufacturers waffle on about equipment levels, discounts
    etc but never mention the real reason for the higher prices which
    is as follows.
    %age of UK car sales to companies/fleets is 60. In France its 4%,
    Germany 15% and the US have never heard of them! If you are a buyer
    like PHH, Hertz etc you can get some mega-discounts as you are buying
    1000 of this model 500 of that model etc. This is simply the wholesale/
    retail law that operates in any marketplace. When Joe public (me) goes
    to buy a car we can only ever get the one-off price so we subsidise the
    large quantity buyer ie. the fleet operators.
    I lived in France for three years and found the dealers far more
    willing to serve me as an individual as every sale is fought for (96%
    of sales are one-offs)
    
    This fits in with what I found out while living in France. When the
    Rover 200/400 was launched in France the 216GSi went on sale at
    97,000FF (about 10K sterling), the spec is THE SAME as the UK car which
    is about 11.5-12K.
    
    The economist also says that private motorists get badly treated by a
    lot of main dealers who are geared up to service company cars. They
    dont like private motorists who tend to quibble every item on the bill,
    unlike the company car man who's spending someone elses money so 'what
    the hell'.
    Lastly, and perhaps most important, research shows that company car
    drivers exceed the speed limit more than private motorists. I know I
    drive far more gently since giving up the Co Car habit and get better
    economy and I'm sure safety as a result.
    The conclusion of the Economist is that the UK has far more flash/high
    spec cars on the road than our wealth as a nation would suggest we
    should have. Also, this company car 'system' is bad for our economy 
    beacause we import more cars than we otherwise would if drivers had
    to pay their own maintenance an insurance bills.
    This is the real reason we have the most distorted market in the world
    in terms of the prices we pay the % of our wealth we spend
    on a set of wheels.
    
    Dave. 
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1340.1Are UK Tax Levels Higher or Average?WOTVAX::MEAKINSClive MeakinsMon Jan 14 1991 14:2810
 >   This fits in with what I found out while living in France. When the
 >   Rover 200/400 was launched in France the 216GSi went on sale at
 >   97,000FF (about 10K sterling), the spec is THE SAME as the UK car which
 >   is about 11.5-12K.
    
    In making the comparison of prices we need to know the tax rate on cars
    in France.  In the UK we have Car Tax - anyone know the percentage? -
    with VAT at 15% on top (ie a tax on a tax).
    
    So, can someone volunteer the figures for the UK and France?  
1340.2OVAL::ALFORDJIce a specialityMon Jan 14 1991 14:3111
I suspect this is a case of which came first...chicken or the egg...

One of the reasons for the inception and subsequent growth in the company car
market, was and still is, the cost of cars in Britain to the private buyer.

Companies, couldn't afford to have their employees stuck for hours by the
side of the road with a clapped out, broken down banger, which is what most
of us could afford as a private car.

Don't count on the dealers changing their attitudes to the British public...
1340.3Company cars - Import???HOO78C::DUINHOVENWeird scenes inside the colemine...Mon Jan 14 1991 15:0810
    I don't see, what import cars have to do with company cars.
    Years ago I saw a lot of banners screaming: "Buy British"
    If people (and fleet owners) would have done this in the past,
    less cars would be an import car now.
    There are lots of reasons, why there are import cars in the U.K.
    I think company cars is not one of them.
    Eventhough, there (almost) is a british car in every class, for those
    who want to drive British.
    
    Hans
1340.4Blame the GovernmentWOTVAX::MEAKINSClive MeakinsMon Jan 14 1991 15:107
> One of the reasons for the inception and subsequent growth in the company car
> market, was and still is, the cost of cars in Britain to the private buyer.
    
    I'm sure there are many reasons, but I believe a major contributor was
    government incomes policy in the 70's (or 60's?).  No pay rises were
    got around by giving cars instead.
    
1340.5SIEVAX::CORNESometimes you get the Elevator, sometimes the ShaftMon Jan 14 1991 16:2411
>    I'm sure there are many reasons, but I believe a major contributor was
>    government incomes policy in the 70's (or 60's?).  No pay rises were
>    got around by giving cars instead.
 
Well, we could solve this at a stroke. No rules on pay rises these days!
Give all company car drivers a pay rise to cover the cost of DIY, and let
us go and DI..

I think the UK new car sales figures would plummet even further!  

Jc  ;-)
1340.6Quotes from the Economist article.UKCSSE::PARKERDTue Jan 15 1991 13:3831
    
    Time to quote from the Economist and get some more debate going
    Extracts Reproduced without permission
    
    ".......Any foreign manager arriving in Britain is amazed to find that
    the permutations of Ford Sierra, Vauxhall Cavalier and the like he must
    offer his staff now define the pecking order in British society. He
    ignores them at his peril.
    The epidemic took hold in the 1970's, when high rates of income tax and
    an attempt by successive governments to control pay made the company
    car a good way of rewarding people surrepititiously.......
    This pattern of car ownership is without parallel in the world.....
    Like that other British obsession, houses, the disease is sponsored by
    the state.....despite a ten fold increase over the past decade the tax
    on company cars is still just a fraction of the true value of the perk.
    ......Millions of British motorists are driving around in cars more
    plush than they would ever choose to own were they handed the extra
    money and told to spend it themselves...There is mounting suspicion too
    that Britian's market in cars, parts and servicing has been poisoned by
    this system. Private car buyers have become second class citizens.
    ......The company car phenomenon is part of the reason why prices in UK
    stay stubbornly above those on the continent. The parallel is with
    health insurance in the USA, where companies insure their staff-and
    medical bills are out of control....."
    
    BTW I was wrong about equipment levels, ours are the highest in Europe
    but the Economist says the manufacturers can add the "goddies" for very
    little extra cost and even base models pre-tax prices are 30% higher in
    Britian than in Belgium.
    
    Dave
1340.7Dispelling a mythGRANPA::63654::NAYLORPurring again.Wed Jan 16 1991 22:3328
>> and the US have never heard of them!

Not really true.  There a mega-DECwrecks running around over here, as well as
Big Blue Wagons and so on.  The main difference between the US and the UK is
that when you get your Taurus or Chevvy, all you get to choose is the colour
(color?) as all the cars are standard models with radio, a/c, power steering,
automatic fitted.

There is one BIG difference - the attitude of the dealers.  When you take your
DECwreck into a dealer here, he's not interested in YOU as a customer because
you didn't buy the car from him.  So, your service is not as good as the private
buyer.

FYI, there are 2 schemes running - Plan A and, wait for it, Plan B.  Plan A
gives you a company car at a cost of $25 per week and you get to choose a
Ford Taurus (monster Granada) or a Chevrolet Celebrity (big Carlton).  The
lease company pays for everything except petrol.  Plan B pays $200 per month
into your pay packet (taxable) and you get to buy your own car which has to
adhere pretty much to the same guidelines as the old UK scheme (when you could
run your own car).  There's another scheme called Plan D which pays you to slap
Digital stickers all over your pride and joy, but it's limited to certain
functions.

Now, as to saving the economy, I'd suggest the topic title should be changed to:

	"Ban company cars!..help fix Digital's economy.

Brian