Mixed Views About Current New Car Shortage
Tuesday, 17. August 2010
The car and car finance industry is full of opinionated people who haven’t a clue as to what they are talking about. So called experts guess and make assumptions without any real knowledge on the subject. About now you will see national newspapers, radio and TV reporters telling you to shop around for finance before the launch of the new 60 registration, ignore dealer HP and find yourself a cheap personal loan, that’s what you want! Absolute nonsense and some of the most costly advice you could take – but I cover that in books and videos to be launched soon. That aside, the latest nonsense comes from the Society of Motor Manufacturers and Traders (SMMT). A very real warning was issued a few weeks ago and supported by me, that we are looking at a pretty substantial shortage of cars at the end of the year as fleets and private drivers seek to buy cars at the current VAT rate of 17.5% before the increase to 20%. But the SMMT has dismissed all the warnings and said that the increased demand will not result in a supply shortage. Well I don’t know where they are commenting from but it certainly can’t be anywhere in the UK because everywhere I look deliveries are drifting out by the day with cars already having deliveries being quoted into 2011. And that’s before some large buyers step in to replace their fleets pre-VAT rises. For those that aren’t aware, unless the vehicle is used 100% for business use, none of the VAT can be reclaimed. So this can amount to £500 on a Vauxhall Astra. The situation may not be so bad though because fleets will have to balance the VAT savings against potential resale value losses as December is probably the worst month of the year to sell a used car. With potential resale losses some fleets have already said that they will not be bringing forward car replacements. Just as well in my opinion as there will be bugger all cars to buy anyway and with car shortages the discounts will reduce. So my warning is that if you have a car that needs replacing this year don’t wait till the last minute, you may be unpleasantly surprised. Have you experienced extraordinary lead times when you ordered a car recently? Please tell me about it? By Graham Hill
