Fleet News

Glorious August: the de-fleeting season

WE are now heading into the de-fleeting season, but in a wobbly used market like we have at present the good news is that fewer will be coming back than in recent years.

Going back to 1999 there were 74,444 cars registered in August, and 386,999 in September, making a combined total of more than 461,000.

The majority of these were potentially fleet cars on three-year contracts and the sheer logistics of moving this vast amount of metal can be daunting.

But it is a job that must be done and selling them as early as possible is of utmost importance. One piece of advice is to try to get in before the rest, as a scramble is bound to happen.

Auctions too must be prepared for the sudden influx and they must try to stimulate the kind of demand that over the past few weeks has been lacking.

On the vendors' side these vehicles must be priced to sell and look ready to retail. That means requiring the minimum amount of work for the dealer to get it onto the front.

But if all of this is handled correctly, then even this number of cars should be absorbed into the trade.

What will help is that the total due back over the two months is about 25 % down on the same two-month period last year.

The combined total registered in 1998 was over 668,000 and they seemed to disappear easily enough, although, looking back, it wasn't an easy job. Some were still for sale many months later and over that time began to look pretty shabby.

New cars are hard to resist

MOST dealers are reporting strong business in the new car market, but this is at the expense of used car sales. The fact is that new cars look such good value that with all the added incentives many people cannot resist them.

While this is great news for new car registrations it does nothing to help move used ones and just about every dealer I have visited over the past few days says the same thing. Customers who would normally buy at two years old are now finding they can move into a new one, with little rise in monthly payments.

They may have to extend the term but that is a minor issue because they are now getting a new car.

The trouble with this, for the dealer, is that longer finance terms take them out of the market for longer. Once the buying cycle gets longer used car sales grow less frequent.

These turbulent times in the world stock markets leave just about everyone a bit poorer.

Whether they are direct investors or not, everyone is affected. People start to tighten their belts and consider more carefully what to spend their money on.

They demand the best value and cut back on unnecessary or luxury items – and that often means not replacing the car. If there is a silver lining to this black cloud, the world markets crisis is happening during the summer when the car market is used to the quiet life.

But if the same happens in winter, then it will not be quite as manageable.

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