What will WLTP, Clean Air Zones, London’s Ultra Low Emission Zone and new VED rates mean for van owners?
The criteria for buying new or used vans will become even more complicated as new legislative factors come into play. While considerations of engine size, payload space and gross vehicle weight remain high on the agenda, buyers now also need to factor in emissions whether purchasing new or used.
Significant changes to where vans can operate and how they will be taxed will come into force between now and 2020, with plenty of new acronyms to decipher and digest ranging from ULEZ and CAZ to WLTP and RDE, not forgetting good old VED (road tax).
As if that was not enough, the way road tax is calculated for vans is also changing.
To help make sense of it all, The Van Expert explains these issues and why they’re important to you.
How will WLTP affect vans?
WLTP, or Worldwide Harmonised Light Vehicle Test Procedure, is the new EU-mandated fuel economy regime. This will see all new cars sold in the UK from 1 September 2018 displaying fuel economy figures based on real-world testing, not best case scenario figures plucked solely from laboratory tests. The same rules will be applied to all new vans from 1 September 2019.
Complementing WLTP will be Real Driving Emissions, or RDE, a real-world emissions test which comes into force for vans in September 2019, with CO2 ratings issued for all new vans.
For van buyers, there’s plenty of unknowns regarding how these regulations will impact new purchases, especially as load capacity is a major factor in determining emissions.
“The biggest question over WLTP for LCVs is how the government plans to calculate CO2 relative to a percentage of gross vehicle weight,” says James Davis, director of commercial vehicles at Manheim Remarketing.
“Until we have this detail, we are unable to predict to what extent vehicle capacity will play a factor; empty, part-loaded or at full payload.”
Furthermore, the new testing regime for cars takes into account different specifications, rather than a blanket rating by engine size. The van world, as Davis points out, is more complex as vehicles can be delivered straight from the factory or undergo conversion work.
“Another question that remains to be answered before implementation comes into full force is whether [the original] base vans will be tested, or whether each individual configuration upon purchase will require testing too.”
Back in 2015, the government revealed its plan to mandate Clean Air Zones (CAZs) in Birmingham, Derby, Leeds, Nottingham and Southampton by 2020.
Local authorities in these cities have been tasked with improving air quality and initial plans to focus on buses, HGVs and taxis have been widened in some to include vans and cars.
The only diesel-engined vans exempt from CAZ charges or restrictions will be those equipped with Euro 6 diesel engines registered after August 2015, or Euro 4 petrol engines registered after January 2006.
Local authorities will determine whether to charge for entry to CAZs or restrict usages during peak times. Charges for non-compliant vans are expected to be in the region of £12.50 a day.
Of the original five cities, Derby and Nottingham have proposed alternative ways to drive down emissions, while Leeds and Southampton are expected to introduce their CAZs by the end of 2019. Birmingham will follow in 2020.
Over time more local authorities will join them with 23 currently earmarked and a further 33 considering what approach to take as part of their strategy to improve air quality.
London’s Ultra-Low Emission Zone
London’s Ultra-Low Emission Zone (ULEZ) is a super-sized CAZ and goes live on 8 April 2019. It replaces the current T-charge (T for toxic) introduced in 2017 to discourage older, more polluting vehicles from driving into central London with a daily charge of £10 in addition to the Congestion Charge; a combined daily rate of £21.50 for those affected.
The daily rate for non-compliant vehicles entering the central London ULEZ will be £12.50 in addition to the Congestion Charge, a grand total of £24. Unlike the T-charge it will operate 24/7.
The ULEZ will initially be launched within the current Congestion Charge Zone but from October 2021 it will be significantly expanded to the cover the inner London area bounded by the North and South Circular roads.
The only diesel vans exempt from the ULEZ charge will be those with Euro 6 units. The minimum standard for petrol van exemption will be Euro 4.
During the Spring Statement in March 2018, the government announced a consultation on reforming the Vehicle Excise Duty (VED), or road tax, regime for vans to incentivise van drivers purchasing new vans to make the cleanest choice.
Van VED is currently levied at £250 per year for vans up to 3.5 tonnes registered since 1 March 2001. A small number of existing vans still benefit from reduced rates since they were early adopters of Euro 4 and Euro 5 standards.
The current proposal sees new van buyers paying VED on a system closely based on the one used for cars, whereby a First Year Rate is set according to CO2 emissions, followed by a standard rate for all LCVs which the government said would be in line with the £250 currently being charged.
The changes will only apply to newly-registered vans, they will not be charged retrospectively.
The results of the consultation will be announced by the government in this autumn’s Budget, with implementation likely to be set for 2020.
Manufacturers only have 12 months to address the challenges presented by WLTP and RDE; the clock is ticking.
For buyers in the market now there are clear benefits in choosing new or used diesels with Euro 6 engines registered after August 2015 as they will be exempt from CAZ and ULEZ charges.
After September 2019 buyers will be able to make more informed decisions as all new vans will be sold with WLTP and RDE approval.