Fleet News

Moving maximises profit

June 2000: THERE is plenty of 'exporting and importing' of used cars going on in Spain. The cars in question are not leaving the country. Rather they are being moved around the regions in an effort to maximise their profit potential.

There is a migration of cars from the more industrial cities like Madrid and Barcelona to the southern parts such as Alicante and Malaga. Much older cars seem to be going to the less wealthy areas like Andalucia.

On the new car front, prices are relatively stable, coupled with constantly improving specification at little extra cost. The trend for used values is also relatively flat. The current promotions and special offers on new cars offered by manufacturers and dealers helped the Spanish market enjoy a bumper year in 1999. This increase in new car sales is also expected to last throughout 2000.

As a percentage of cost new, used cars in Spain retain their value well - so that the cost difference between new and used cars is relatively narrow. For example, a one-year-old SEAT Toledo retailing at 3,100,000 pesetas (€18,600) compares to a new car on sale at 3,300,000 pesetas (€19,800) – not a significant difference. With a three-year-old example, a value about 1,750,000 pesetas (€10,500) still represents more than 50% of original cost.

The demand for ex-rental cars continues to grow, but as the manufacturers' self-imposed volume restrictions to rental companies continue until 2002, demand will outstrip supply.

The total for this year will be about 165,000 units for rental. As the fleet business continues to grow, with more and more companies offering employees a company car, the used car industry in Spain will begin to turn into a much more sophisticated business.

The Belgian car market is similarly going through an upturn, but owners of used cars in Belgium will shortly have a raft of new documentation to keep with their cars. A new legal document will record all mileages when work is carried out on a vehicle.

This will provide authorities with a central database to help combat clocking (reducing the mileage on the odometer), although this is only part of the arrangement. Under the new rules, if a car has not been officially tested and certified within three months of the due date, the owner receives a letter asking where the car is and whether it is being used.

Belgian drivers will also receive a scrappage certificate whereby dealers and manufacturers will be obliged to take back cars and the Government will issue a certificate so the owner doesn't have to pay tax, insurance or be liable for what happens to the car.

By contrast, the authorities in the Netherlands already centrally hold all documentation on cars. No doubt the Belgian authorities have learned from the success of their Dutch counterparts.

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