Fleet News

Biggest fleets may still get their huge discounts

BRITAIN'S largest fleets, daily rental companies and Motability could still continue to receive the biggest fleet discounts in the country - effectively making them exempt from Government moves to equalise discount terms between other fleets and dealers. Following publication last month of the Competition Commission's New Cars Inquiry report, Trade and Industry Secretary Stephen Byers compiled a seven-point action plan designed to increase competition among suppliers of new cars and reduce prices.

The plan included provision for dealers to be offered the same bulk discounts as fleet customers, immediately prompting fears among fleets that, in some cases, the discounts currently enjoyed by Britain's biggest outright purchase fleets and rental companies, which buy thousands of cars and vans at a time, would be cut. For rental companies, any reduction in buying terms would lead to increasing operating costs and therefore a rise in rental rates. There are also fears that a severe limiting of big fleet discounts could result in those companies sourcing vehicles in Europe, according to one manufacturer's fleet director, which would be a 'nightmare scenario' for the Government.

The report said that private buyers were paying about 10% too much for cars after taking account of discounts, trade-ins and finance deals and Byers gave interested parties until next May 19 to comment on his proposals prior to the recommendations, or Orders, taking effect on June 10. The Competition Commission and Government's argument is that retail transaction prices must fall and, therefore, the perceived pricing imbalance between fleet and retail discounts will realign in favour of retail buyers. However, the report fell short of condemning the 30-40% discounts enjoyed by the biggest fleets.

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