Prices of popular fleet vehicles to rise

Price rises for a range of popular fleet cars and vans is “almost inevitable” over the next few months, according to FleetCheck.

FleetCheck’s customer success director Andy Kirby said that a range of factors would create upwards pressure, including the cost increases of raw materials and slowed production.

“Through our sister company, Fleetfind, we help our client base source vehicles, and there is no question in our mind that prices will increase and potentially not by just a few percentage points.

“Manufacturers are in a position where the prices of the raw materials they use have risen rapidly in the wake of the pandemic while, at the same time, production numbers are being restricted, largely by semiconductor shortages.

“This can mean only one thing for prices and it is notable that, with long lead times being quoted on most models at the moment, few suppliers will guarantee prices in advance.

“The question is now how fleets and their drivers react to these price increases over the next few months and whether there are any ongoing impacts.

“It’s too early to see what fleets will do but there are a number of courses of action they could take. The simplest one is to just bite the bullet and pay the higher price or increased lease rate – and no doubt many will do this. However, others will no doubt try to control costs and there are a number of options open to them, from redrawing choice lists in favour of lower-cost models to keeping cars and vans for longer in order to spread the cost.

“All of this is further complicated, of course, by the ongoing electrification trend. In normal times, the buoyant used car market would potentially be offsetting price increases through higher residual value forecasts, but the rise of the EV is making predictions harder,” Kirby concluded.