Fleet News

New Cars Inquiry offers threats and opportunities

THE Competition Commission's New Cars Inquiry holds the possibility of both threats and opportunities to the UK leasing industry. On the one hand, the remedies statement letter seems to back the concept of personal contract motoring schemes by asking for views on whether manufacturers: 'should be prohibited from discriminating in the terms offered to contract hire companies according to whether the latter's customers are businesses or private hirers.'

This highlights the distinction that car firms draw between fleet and retail business, and their belief that any driver outside an orthodox company car scheme is a private motorist for whom they have devised a raft of retail products. Extending fleet-type discounts to this PCP market would cannibalise dealer sales and reduce manufacturers' control over the destiny of their vehicles.

But if the commission forced manufacturers to abolish discrimination in the terms offered to contract hire firms depending on the end customer, the flood gates could open for PCPs, as bank-owned contract hire firms extended corporate rates to their customer base. In the shorter term, however, the remedies statement further undermined used car values as the result of a trickle-down from falling new car prices.

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