Fleet News

CA calls for radical car selling changes

THE UK's biggest leasing and rental companies could start retailing new cars within three years, according to the Consumers' Association. In a report called 'The forecourt revolution: the future of the car industry', published this week, the CA claims that car buyers will abandon the traditional dealer-related buying process.

It claims they will instead source cars from abroad, from the internet or simply buy more nearly-new cars unless radical changes are made to open retailing to new market forces. These forces could include large fleet companies, according to the CA, which has previously criticised corporate buyers for distorting the market through discounts and buy-back arrangements.

'Fully 80% of new car sales are to corporate bodies, with some degree of direct price negotiation with the manufacturer,' said the report. 'Within this, 20% of the market is with large fleets. Agreed price buy-back contracts and lease and contract hire charges based on forecast residual values create a vested interest in new car prices not coming down.'

CA senior policy researcher, Phil Evans said: 'I would never blame a fleet buyer for negotiating a healthy discount for bulk purchasing new cars; that's good business. But we do want to see the same price advantage extended to the retail consumer. I wouldn't be surprised if car hire firms like Avis and Hertz and contract hire firms such as Lex Vehicle Leasing moved into retailing, particularly as they're so well organised to negotiate the best discounts already which they can pass on to the private customer.'

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