Age Discrimination and the Equality Act

What is happening?

The Equality Act, which received Royal Assent in April 2010, aims to make any discrimination by age unlawful in the provision of goods, facilities and services. The Act prevents businesses from imposing higher costs or age restrictions on customers that are deemed a higher risk allowing all products and services to be open to all customers for the same price regardless of their age.

The Act is being implemented on a piecemeal basis and provisions relating to the public sector, recruitment and promotion, equal pay are already in place.

The legislation relating to age discrimination is still being consulted on and legislation is due to be introduced in April 2012.

What is the impact on rental companies?

If the Act is implemented without an exception for car rental it will be illegal for rental companies to vary, add a supplement, or charge a different rental rate directly because of the age of the customer or restrict the type of car the customer can rent.

The Government Equality Office does not currently consider that a specific exception for car rental from the regulations should be provided. However, they consider it is likely that rental companies should be able to objectively justify the following practices:

Requiring a minimum level of driving experience to rent a car, because inexperience is a key issue in the likelihood of accidents. For example, a customer may be required to have held a full driving licence for at least 12 months;
Not renting cars to people with motoring convictions, points on their licence or who have had accidents within a certain time period, from a risk exposure and road safety standpoint; and
Charging higher prices, deposits and excesses to people in age groups which are statistically more likely to have accidents, in order to reflect higher insurance premiums and the cost of repair if the car is involved in an accident.

The BVRLA is concerned with the uncertainty around the above approach and is still pushing for a specific exemption for vehicle rental.

The BVRLA in its response to the Government Equality Office has demonstrated again that an exemption for vehicle rental is necessary and has estimated that the costs of renting to all younger drivers would be in the region of £34.54 million per annum for members.

To access the response sent in May 2011 please click the link below:

Consultation response – May 2011

What is the impact for leasing companies?

The Government Equality Office has agreed that financial services companies will be able to differentiate the way in which they provide their products to older/younger people where it can be justified. For example, car insurance companies will be able to use age as a determining factor when pricing their products and finance companies will be able to use age when determining credit risk.