Fleet News

Fleets shun cut-price car buying schemes

FLEET managers are rejecting new cut-price car buying schemes through the internet and on the Continent because they are already being offered better discounts from manufacturers. Coupled with concerns over residual values, vehicle specification, warranty cover, parts availability and servicing, fleet managers say buying abroad is not an option.

And the Society of Motor Manufacturers and Traders issued a 'buyer beware' warning over cars sourced in Europe with a spokeswoman saying: 'Fleets should look very carefully at what the vehicles' specification are, as these can vary considerably from country to country. There are several other downsides to consider such as aftersales support. Fleets would be best advised to use the dealer network, which is vital for on-going support.'

SMMT chief executive Christopher Macgowan, said: 'The freak situation at the moment has resulted in companies such as Virgin and P&O Stena Line being in the market. They will have an influence on the industry - both retail and fleet - and that is progress and the SMMT welcomes these new channels.' However, he questioned whether those companies would remain in place if taxation and exchange rates were harmonised across Europe.

In the last month, both Sir Richard Branson's Virgin and P&O Stena Line have announced schemes to bring cut-price new cars into the UK amid continuing 'Rip-Off Britain' allegations aimed at vehicle manufacturers in the UK. Last week Virgin Cars - which claims to have received fleet interest - said it planned to sell new cars on the internet and over the phone at prices averaging 22% below UK showroom levels.

But both schemes have been given a lukewarm welcome by fleet managers and leasing companies, although they admit they will review the new options. Peter Galtrey, Liverpool City Council fleet manager, said although he only had a fleet of about 50 vehicles at present, it would be worth investigating if it did cut costs. He said: 'The bottom line is money. We have looked at vehicles from the Republic of Ireland but there was nothing in it for us.'

Wary of residual value problems Ian Richardson, fleet manager of English Nature, which operates a fleet of 100 cars and 100 4x4 vehicles, said: 'It could be an option and we could look at it next time we buy. I think it is probably doubtful they would be able to do it cheaper than we already get vehicles with discount now.' And Di Rees, Leo Pharmaceuticals business services manager, which has a fleet of 172 cars said: 'It is something we cannot ignore but there are pros and cons. I still feel that our business is a very much about relationship building. I do think more business will be done on the 'net but not tomorrow.'

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