Fleet News

Company car drivers lose out in price war…

THE vast majority of car-makers have slashed new car prices - but company car drivers are unlikely to feel the benefits. Research by FNN shows many cars are now being offered with discounts to retail customers which are not reflected in the recommended retail price, which is often thousands more than the discounted price - and the basis of the current company car tax system.

FNN has discovered that of 33 manufacturers questioned 25 have not cut RRPs amid 'Rip-off' Britain claims and the Competition Commission inquiry into new cars.

While a few manufacturers have already taken the step of slashing RRPs, others are offering back-door price cuts and temporary offers to retail buyers while keeping RRPs intact.

Ford said customers have seen a significant fall in transaction prices at dealerships so far this year. Cashback offers of about £1,500 and other benefits are available to retail customers until the end of September, and Ford boss Ian McAllister has said the company intends to continue 'to produce transaction prices well below RRPs'.

A Ford spokesman refused to comment on the situation of company car users paying tax based on RRPs.

Vauxhall also has a 'Value Pricing' initiative which means up to £2,000 saving on RRPs of certain models for private buyers. Mazda and Nissan are among those offering more than £1,000 off certain models at retail without reducing the RRPs.

But Land Rover says it was not interested in offering temporary offers or cashback. A spokesman said: 'We wanted to do something straightforward. We also didn't want to be seen as having temporary deals or back-door methods of reducing prices like cashback. Our 2001 model range also gave us the opportunity to enhance specification, so the total value of the price reduction of a Freelander 1.8S softback is £2,215 - or about 13%.'

Mitsubishi was one of the first to move on pricing and a spokesman for the company said: 'By cutting RRPs we did as the Consumers' Association recommended, making a clear and transparent price change. Not choosing to give cashback offers also had a benefit for the fleet market with lower company car tax, and this was one of the key factors.

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