Fleet News

'Cap fleet discounts at 20 per cent'

FLEET discounts should be capped at 20% below list price to level the playing field between private and corporate buyers, a leading industry figure has demanded. Alan Pulham, franchised dealers director of the Retail Motor Industry Federation, made his controversial call as the Competition Commission's 1,400-page report on its New Cars Inquiry was handed to the Department of Trade and Industry this week.

The long-awaited document has almost paralysed the new car market, as private and corporate buyers alike postpone buying decisions believing manufacturers will be forced to slash new car prices. But leading manufacturers are resolute in their defence of existing prices. Details of the report may not be released for 10 weeks, but the RMI called for the Government to end 'price confusion' immediately.

Pulham claimed high discounts had a negative effect on residual values and added: 'Where a fleet buyer gets a considerable discount, he loses on the residual value of the vehicle. There should be a return to a sensible margin of perhaps 20%. There should be a discount for volume. When I started, dealers got 20% on a car and within that the fleet got their discount. Now you have fleet discounts above 20%, while dealers have margins of less than 10%. We need to clarify the issue.'

He was backed by the Consumers Association, which demanded that buyers of one car get the same access to discounts of up to 35% as fleets buying hundreds of vehicles. Fleet industry experts dismissed the claims as ill-thought-out and confused. A spokesman for the British Vehicle Rental and Leasing Association, said: 'It is essential that the new car market is a free market and fleets should be able to operate with whatever fleet discount they can obtain.'

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