Rental companies buying nearly-new cars due to shortage of new
By Mark Salisbury
Wednesday, July 25, 2018 - 09:15
Some daily rental companies are starting to buy nearly-new cars on the used market because of a shortage of new stock, reports the Vehicle Remarketing Association.
Typically, they are purchasing batches of small-medium sized cars that are less than six months old, helping to keep values for these vehicles firm.
Glenn Sturley, chair at the VRA, said: “We have seen a number of manufacturers pull back quite significantly from the rental sector in the last year, especially some of those who have supplied superminis in larger volumes. Also, even those who continue to push larger numbers of cars into the sector are often suffering from supply issues.
“This means that simply to meet their requirement for vehicles, some rental companies are having to look beyond traditional sources and have been entering the nearly-new sector instead, buying batches of cars to meet their needs, our members are reporting.
“This is something that happens periodically but there does seem to be at quite a high level at the moment and appears to be helping to maintain values in this part of the market, especially when it comes to superminis and city cars, with the latter doing especially well.”
Glenn said that new car daily rental business tended to be cyclical and depended very much on vehicle supply at any given time.
“To some extent, daily rental business has got a bad name that it doesn’t really deserve. There is a tendency to think of manufacturers using it to ‘dump’ large numbers of new cars onto the market, which that is something that hasn’t happened for many years.
“Volumes of manufacturer daily rental business do tend to depend on supply at any given time but it is an important element in the remarketing sector and is nearly always used responsibility nowadays.
“However, the partial shift to used purchasing does show how limited new car supply has become for some buyers in some areas of the market, caused by factors such as WLTP and the buoyant new car market elsewhere in Europe taking preference.”