GTA boss says greater regional stability is needed before introducing tariffs for electric vehicle rentals

The General Conditions of Contract (GTA) between insurers and credit hiring organizations (CHOs) is a voluntary agreement launched in 1999. They have been developed by the ABI to establish credit hire rates that an innocent driver can reasonably recover in court following a traffic accident.

However, as electric vehicles (EVs) are increasingly deployed on Britain’s roads – Zapmap, for example, found that there were 1.3 million fully electric cars in the UK by the end of October 2024 – some market commentators have called for these vehicles to come to the GTA be included.

This would set loan rental fees specifically for electric vehicles, in addition to those already listed for gasoline and diesel vehicles.

James Roberts, head of insurance sales at Europcar, said Insurance periods that the question of whether electric vehicles should be introduced into the GTA needs to be resolved in the short term, with credit rental companies already planning their fleet purchases for the next two years and beyond.

He said: “There is no denying that demand for electric vehicles has increased in recent months as individuals and companies become more focused on zero emissions.”

“Driver and Vehicle Licensing Agency (DVLA) data for the first quarter of 2024 showed there were more than 1.1 million fully electric cars on UK roads. Other reports suggest that number was over 1.2 million by August 2024.

“Electric vehicles are becoming an increasingly important factor for auto insurers as they plan their growth, maintain their portfolios and manage claims costs.”

Create certainty

For Roberts, “the lack of a specific EV category in the GTA” is a “major barrier” impacting the further development and adoption of electric vehicles in the UK.

He continued: “Insurers and credit hire companies still need this important clarity to remove some of the uncertainty around the reimbursement of loan hire costs.”

“Given that the government may completely ban the sale of new petrol and diesel vehicles by 2030, but hybrid vehicles will be allowed to remain on sale for another five years, insurers must quickly engage with the electric vehicle landscape to support motorists.”

Roberts added that adding electric vehicles to the GTA would “eliminate claims conflicts and unnecessary litigation” and “enable credit rental companies to more accurately predict the profitability of credit rental claims when the customer is driving an electric vehicle.”

A March 2024 study by Europcar found that 74% of claims professionals see the rise of electric vehicles as having the biggest impact on the replacement vehicle market over the next five years.

One respondent also feared that the insurance supply chain would not be able to keep up with the upward trend in electric vehicles.

Roberts said: “As a business, our fleet team is already looking at the shape of the fleet two years from now. To do this, we need greater certainty around access to electric vehicles within the GTA so that we and other companies can better plan how our fleets are designed to meet customer needs.”

Start of the discussion

However, those behind the GTA have revealed it Insurance periods that fees charged for electric vehicle rentals need to be more standardized before significant action can be taken to amend the GTA.

“From the beginning, we tried to bring our insurance and borrowers together to agree on a maximum daily rate.”

James Driscoll, Aviva’s senior claims manager for motor claims and credit hire and chair of the GTA Technical Committee, said: “The long-term aim of the GTA is to be able to add more mutually agreed EV tariffs to the GTA.”

“The challenge is that tariffs need to reflect regional differences in third-party claims for electric vehicles, which we are not currently seeing.

“The GTA reviews the data quarterly and once rates stabilize, we believe insurers and CHOs can agree on reflective EV rates that are fair to insurers and CHOs.”

GTA Independent Leader Stewart McCulloch responded to Europcar’s references, adding: “I’m surprised we have an organization pushing (this) agenda that is not part of the GTA.”

“My message is that you are welcome to join us and participate in the discussion about how we bring electric vehicles to the GTA. The GTA includes a range of electric vehicles and whilst this is not a large number, as a market we are looking at how we can understand where the market is heading in terms of pricing etc.

“From the beginning, we tried to bring our insurance and borrowers together to agree on a maximum daily rate. When it comes to electric vehicles, we need to find this rate at a level that does not impact the customer.”

Unity attitude

McCulloch noted that “insurers cannot try to agree a rate that is consistent with the broader market. We must have a uniform rate across the country.”

He continued: “Currently we have a significant number of electric vehicles in the south east of England, but if you go to the north of England and Scotland the number of electric vehicles available is much smaller.” This is despite the fact that Scotland has the highest number of charging points per capita in Great Britain.

“The example I always use is the BMW i8. It would be hard to get one in Inverness, but there are a large number of them in central London.”

He explained that regional differences between electric vehicle availability and current rental prices are significant – compared to some parts of the country, electric vehicle loan rental prices can vary by around £1,000 per day, McCulloch noted.

“Until the market stabilizes in terms of pricing and we cannot agree on a broad tariff, it would be irresponsible to move quickly and create scale in the GTA,” McCulloch added.

“Our subscribers understand the difficulties that would accompany a rush.

“We’re working a lot on what’s called GTA 2.0. This is intended to remove friction costs from the process and increase trust between subscribers to reduce claims costs and insurance premiums.

“We review the state of the electric vehicle market on a quarterly basis and the next review will be in December. I must say that none of our subscribers have come to me to say that they are dissatisfied.

“If we try to act too early, it will lead to difficulties.”