Prices for some of the fleet sector’s most popular fleet cars and vans will inevitably rise over the next few months, potentially by well more than a few percentage points.
According to Andy Kirby, customer success director at FleetCheck, there is “no question” that prices will increase, leaving fleets with some difficult choices to make.
Kirby said vehicle production was being hit from a range of factors, from rising raw material costs to much-slowed production – last week saw FleetCheck warn that fleets are facing “worst-ever” vehicle delays as a result.
Kirby added: “Manufacturers are in a position where the prices of the raw materials they use have risen rapidly in the wake of the pandemic while, at the same time, production numbers are being restricted, largely by semiconductor shortages.
“This can mean only one thing for prices and it is notable that, with long lead times being quoted on most models at the moment, that few suppliers will guarantee prices in advance.”
He outlined that fleets had a number of courses of action that they could take.
“The simplest one is to just bite bullet and pay the higher price or increased lease rate, and no doubt many will do this.
“However, others will no doubt make an attempt at controlling costs and there are a number of options open to them, from redrawing choice lists in favour of lower-cost models, to keeping cars and vans for longer in order to spread the cost.
“All of this is complicated, of course, by the ongoing electrification trend. In normal times, the buoyant used car market would potentially be offsetting price increases through higher residual value forecasts, but the rise of the EV is making predictions harder.”