Fleet News

The time is right for car price rises

'AS January gets underway the market is getting back to full steam. Again, activity has generally increased – measured in both the trade and retail markets.

This is an interesting time because the question in the minds of fleet people is whether or not 2004 is going to bring the kind of stability that made last year such a success. Or whether those leasing companies reported in the Fleet News FN50 who expected a downturn this year will be right.

Certainly at the moment all the indications are of a continuing healthy market with everything pointing to a strong first quarter.

There is much comment at the moment on the issue of new car prices. Since the fall-out from the old 'rip-off Britain' campaign new cars have become more affordable than for many years – if not ever – and the first signs of a move to push prices back up are now emerging.

The recently announced £13 increase in registration fees has given many an opportunity to adjust prices on the metal – not always by just £13 – or in some cases, option prices. This is undoubtedly a sign of things to come.

It may be no more than speculation but it would be little surprise if we do not see a regular increase in the registration charge heralding other general price rises and changes to ranges. It makes sense when you consider that having to re-print price lists just for the sake of accounting for a registration fee change makes little economic sense.

This suggests that this time of year might well become very busy in terms of changes to what is offered by manufacturers. Certainly my CAP New Vehicle Data colleagues are working overtime and weekends to keep on top of all the alterations to prices and model ranges at the moment.

A surprise RV champion

An interesting fact for fleets emerged during analysis this week of the residual value performance of last year's biggest-selling cars in Britain.

The presence of the Volkswagen Golf and BMW 3-series in the top 10 might well lead to the assumption that these would be the residual value star performers among the highest volume cars.

Not so. The overall best performer was Ford Mondeo. This has to be good news for fleets, which have been stung badly in recent years by the drift away from these large upper-medium cars in the used market in favour of MPVs or lower-medium offerings.

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