Getting into the zone
Wednesday, December 21, 2011
From January 2012 the London Low Emission Zone will affect non-Euro3 compliant vans to the tune of £100 per day. James Dallas gets the lowdown on how to beat the charge.
The expansion of the London Low Emission Zone is fast approaching. From 3 January 2012 Transport for London is widening the zone’s net to include vans with a gross vehicle weight of between 1.2 and 3.5 tonnes, minibuses under 5.0-tonnes with at least eight passenger seats, specialist vehicles such as horse boxes and motor caravans and ambulances with GVWs of 2.5-3.5-tonnes.
TfL says this equates to 240,000 vehicles travelling within London each month newly affected by the LEZ. Of these, it reckons nine out of 10 were compliant in November 2011.
Those that do not meet Euro3 emissions standards for particulate matter, which is likely if they are more than 10 years old on 1 January 2012, will be subject to a £100 daily charge to enter the LEZ or face being hit with a £500 fine.
Like the London Congestion Charge, the LEZ is enforced by cameras that capture the vehicle’s registration plate and check it against the DVLA’s database. The charge can be paid online, by phone or by post up to 64 days before entering the zone.
About 80% of the vehicles newly included in the LEZ will be vans.
TfL claims the Greater London LEZ, which covers an area just within the boundaries of the M25, is the largest environmentally controlled zone in the world. It operates 24 hours a day, 365 days a year.
TfL introduced the LEZ for larger commercial vehicles, such as lorries, buses and coaches in 2008. In the first year it claims to have prevented 28 tonnes of particulate matter (PM) from entering London’s air.
But the scheme now needs to be expanded to make sure London meets European standards for air quality. TfL says air pollution is a serious health issue contributing to about 4300 premature deaths a year in London, with the elderly and children particularly vulnerable. It claims the 2012 changes to the LEZ will double the reduction in PM.
Kulveer Ranger, London mayor Boris Johnson’s environment director, says: “The mayor is taking robust steps to deliver cleaner air and improve Londoners’ health. Changes to the LEZ in January are a key part of these plans.”
TfL originally planned to broaden the LEZ to take in larger vans from October 2010 but postponed the move due to the tough economic conditions to give operators some breathing space before they had to comply with the changes.
Ranger continues: “The vast majority of vehicles set to be affected by these new standards are already compliant. However, a small minority of drivers still need to take action to avoid fines,”
He warns that certain options to make vans Euro3 compliant, such as fitting an approved exhaust filter, can take up to three months to complete.
On a van such as a Mercedes-Benz Sprinter or Toyota Hilux pick-up, for example, a filter will cost about £1500 to fit and will then have to be approved by Vosa.
“I urge those affected to take action as soon as possible,” Ranger says.
TfL also suggests operators sidestep the charge by converting their vans to run on pure gas with a spark ignition, using an approved conversion. However, this procedure will cost between £1000 and £2000.
Another option for fleet operators, it says, is to “reorganise” their fleets so that only vehicles meeting the emissions standards enter the LEZ.
Replacement over retrofit
According to the Freight Transport Association (FTA), replacing old vans is likely to be the route taken by the majority, although it reckons four out of five companies with operating centres outside London will re-distribute non-compliant vehicles elsewhere in the UK to avoid the LEZ.
Natalie Chapman, FTA’s head of policy for London, says: “More operators are looking to replace their fleet and looking past retrofitting as the solution because their fleets are coming to the end of their lifespan. Due to the financial constraints of recent years, operators have chosen to stretch the lives of their fleets, but the new LEZ requirements may have forced their hands into replacing their oldest vehicles.”
But Chapman believes the light commercial vehicle sector is well prepared for the changes. Entering the final quarter of 2011, just 10% of operators told the FTA their fleets were not fully compliant with the new standards.
“As only vans over 10 years old will be affected by the changes, on the whole the impact on FTA members, who represent half the UK van fleet, will be limited,” Chapman says.
Deals on wheels
Most of the leading commercial vehicle manufacturers have responded to ‘encouragement’ from the mayor’s office to offer incentives for customers to trade in their old vans for newer, cleaner models.
Market leader Ford initiated a scrappage programme under which owners of vans that are at least 10 years old can get up to £3000 off a new Ford van. Customers exchanging their old vans can get a £1000 discount on a new Fiesta Van, £1500 on a Transit Connect, £2000 on a FWD Transit and £3000 on the larger RWD Transit.
Ford’s commercial vehicle boss, Steve Clary, claims the Blue Oval is the only brand offering a genuine scrappage scheme to remove, older, higher polluting vans from the roads altogether, and he adds that putting the programme into place was not cheap for the manufacturer.
“We are the only ones who insist on scrapping the vehicle. We maybe pay a couple of hundred pounds for the old van and we’re offering up to £3000 off in addition to the retail offers [on a new van].”
“There’s a cost for us in administrating the scheme with auditors and zone managers,”
With the LEZ charge looming over van operators, Clary says London dealers have experienced a surge of enquiries from owners looking for compliant models. Ford dealers rarely stock vans of more than five years old and Clary says 90% of the customer interest has been for used models that meet the Euro3 standard.
Manheim Remarketing agrees that the publicity given to the LEZ change has driven up demand for used vans.
Tim Spencer, CV auctioneer at the firm, says: “The LEZ appears to be getting more exposure in the press and on social media sites. The impact of that pent up, artificial demand spike when coupled to the current wholesale used van shortage is likely to drive used values higher.”
Citroen has introduced an allowance of up to £3500 to help London-based commercial vehicle operators cope with their liabilities under the revised LEZ.
Under its Go Green and Clean Allowance, which runs from 1 May 2011 to 31 March 2012, the manufacturer is offering a saving of £1750 on a new Nemo in exchange for an old van, £2500 on a Berlingo or Dispatch Combi and £3500 on a Dispatch LCV or a Relay.
But unlike under the Ford arrangement, the older vans are not scrapped. In order to qualify for a discount, operators must be able to provide evidence that the vans they are exchanging are taxed, MoT’d and roadworthy so that dealers can sell them off at auction or to buyers operating outside of Greater London.
Additionally, to get money off a new van, customers must produce the letter from TfL informing them of their obligation to pay the daily charge of £100 to allow them to take their existing van into the LEZ.
Peugeot has announced a raft of cashback deals on new vans in addition to all existing incentives to persuade customers into greener models. Moving up the line-up it is offering £500 on a Bipper, £750
on a Partner, £1500 on an Expert and £2000 on a Boxer. Like the Citroen deal, customers must produce the letter from TfL to qualify for the offer that runs
until 31 March 2012.
Volkswagen Commercial Vehicles is encouraging customers into newer vans by making a deposit contribution towards finance deals on new vans and by providing preferential servicing packages for used models.
Fiat Professional has introduced a combination of VAT-only deposit coupled with a six-month payment holiday and a low rate (1.1% APR) of interest on its new van range.
Mercedes is running a swappage scheme based on a weekly payment of £60, which allows owners to swap into a new Vito.
Renault is offering discounts of between £2900 and £6000 through its swappage scheme while Vauxhall claims to be offering up to £7500 off its new vans.
The Society of Motor Manufacturers and Traders claims the new LEZ regulations could “transform London’s streets”.
Its research found that of the 3.57 million vans on UK roads at the end of 2010, 31% would not be LEZ-compliant as of 3 January 2012. Surprisingly, London exceeded the national average with 37% of vans (85,000) not meeting the new standards.
SMMT boss Paul Everitt says: “As the LEZ deadline approaches, van manufacturers are offering customers excellent value deals on the latest low-emission vehicles. It’s not only emissions that improve when owners and operators upgrade, fuel efficiency also gets better, returning real-world benefits on top of the LEZ savings.”
Everitt anticipates a “slight spike” in van sales as the year draws to a close as customers switch to compliant models. But with the market up about 20% compared with last year, he believes many owners and businesses have already renewed their vans.
A small number of CVs are exempt from the LEZ. These are specialist vehicles built for off-road use but which may occasionally need to use roads, such as agricultural and forestry tractors, mowing machines, farm machinery
and equipment, mobile cranes, and road and building construction machinery. Historic vehicles built before 1973 and Ministry of Defence vehicles are also exempt.
Intriguingly, some ‘showman’s vehicles’ are also eligible for a 100% discount from the charge if they are registered to a person working as a travelling showman and have been modified or specially constructed for the purpose of the show. This could mean the vehicle is used during the performance, used to carry equipment for the performance, used to display animals to the public or has been modified below the chassis level so that it is not possible to fit emission- abatement equipment. If your vehicle meets this criteria you must register with TfL to qualify for the discount.
As yet it is not known how many van operators are planning to moonlight as circus acts in order to avoid the LEZ charge.