Car sales plummet as vehicle rentals increase, but what’s to blame?
September is the country’s big car buying month. Despite the fact we now have two new registration periods during the year, legacy buying habits have left September as the month when most organisations continue to invest in their vehicles – but not in 2018.
September 2018 saw a 20.5% fall on the same month in 2017, lower than at any point in the past seven years, according to The Guardian. And as calendar year end figures are released, it seems the problems didn’t stop in September. Overall, as the BBC notes, annual car sales suffered the biggest drop since the financial crisis of 2008.
A perfect storm
You don’t need you finger on the pulse of the automotive industry to know what the problem is. The confusion over diesel saw sales drop by 30% (ironically leading to a 3% rise in CO2 emissions from new cars). The car industry’s scramble to comply with the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emission standards led to supply bottlenecks. And then there’s that B word again: Brexit is adding to the ‘wait and see’ caution of many business owners.
Small wonder SMMT chief executive Mike Hawes described the challenges as “something of perfect storm” for the industry.
The flexible car leasing solution
The real issue for the industry, of course, is that there doesn’t appear to be any immediate end to at least two of those three challenges, and that feeling of long term uncertainty is what’s behind a pronounced increase in flexible car and van leasing.
Leasing has always been a way to protect business capital, minimise risk and lock in simple essentials like vehicle maintenance. But right now, those benefits look even more attractive, because leasing a car or van protects you against any negative consequences of the current climate but keeps you in the ideal position to benefit from any upsides.
Government suddenly slaps a diesel tax on every diesel driver? Simply hand it back and rent or buy a petrol or hybrid. Brexit results in a temporary rise in vehicle costs? Hold onto the lease van for a while longer. Brexit (or a sudden oversupply of vehicles) leads to a reduction in vehicle costs? Hand the lease car back and buy at the ideal moment.
Bear in mind, it’s not every car or van lease that lets you do this. Only flexible leasing from TJS gives you the ability to rent month by month, and hand the vehicle back at a moment’s notice.