Business as unusual – How ordering your new car has now become a minefield you need to navigate carefully, and with expert advice on hand...

Published 9 December 2020
in Advice
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There was a time when you could walk into a car showroom and simply choose your car and drive away the same day, with no real way of knowing whether you had got a good deal, other than what the somewhat-biased car salesman told you!

Then the internet came along, and suddenly we all had a wealth of information at our fingertips. Magazines such as What Car? went online and offered ideas on “Target Price” helping consumers be pre-armed before starting the haggling process.  Next, hundreds of leasing broker websites popped up with ‘too good to be true’ pricing on them (hint-they mostly were!).

Many of our clients now tell us they are lost amongst the noise of all this, and with new technologies such as electric cars now adding to the confusion, it can be difficult to know where to start.

We like to think we cut through the noise, offering independent, expert and considered advice to the professional market we serve.


This month we look at the ordering process and timescales around delivery of your new car, and what to look out for as we bring the weird, upside-down world of 2020 to a close.

 

Stock of cars in the UK at its lowest level for a decade

One thing that separates the economic downturn from others is the fact that supply actually slowed before demand in the 1st quarter of 2020.  With China the first country to be affected by the pandemic, companies such as Volvo saw huge disruptions to their, mostly Chinese-based, supply chain.

As the pandemic spread to Europe, we did not see a steady cut back of supply, rather a concurrent shutdown of manufacturing with the lockdowns across Europe.  This meant that there was not the typical time lag between slowing demand and less supply.

As the world bounced back in the third quarter, this meant there were very few cars, particularly the most popular brands, and even more so on the electric car front in stock.  What is more, both manufacturing and logistics have still not returned to normality, meaning most manufacturers are running behind even their normally most pessimistic lead times from factory of 12-16 weeks.

What does all this mean to you?  Well, if you have any plans to get a specific car before June 2021, it is absolutely the time to start looking now.


Many of our business clients are now planning out their year ahead, and considering updating their delayed car changes. Again, we’re advising clients to consider this well in advance, avoiding juggling further delays than you would typically expect.

There are always some cars available, but the tightened stock means there are less than normal times, meaning the ‘deal frenzy’ we see at the end of quarters is likely to be some way away, perhaps not returning until mid 2021, and probably never returning to the levels we have previously seen.

Contrary to perceived wisdom, a more considered, advance planning approach is likely to be rewarded with regards to price, rather than leaving things last minute in the hope of securing a better deal.

 

Brexit

At time of writing, the Brexit saga rumbles on, with the latest suggestion being that we are less than 50% likely to get a deal finalised by year end.

If we do see a ‘no-deal Brexit’ we can expect imported cars to be 10% more expensive, at least in the short term.  What is more, brands whose cars are manufactured in the UK, such as some models of Land Rover, have warned they will also see an increase in costs and therefore consumer pricing, as components shipped in from Europe are set to also suffer new tariffs.

Many manufacturers are offering price protection for cars ordered this month, and we’re suggesting clients are wise to secure their pricing now, rather than have to deal with a significant price increase in the new year.

 

Moving Forward

One small part of the upheaval society has gone through in 2020 is the disruption to the way we all move about, and we predict the ‘mobility market’ will continue to experience shocks to its core throughout the decade.

In the short-term, businesses and consumers alike should consider the plan for 2021, and avoid the typical ‘we’ll get that organised in the new year’, as 2020 throws up yet another anomaly for business-decision makers and individuals alike.

Whether it be a scarcity of stock, or the possible impacts of a ‘no-deal’ Brexit, December is set to be an unusually busy month for the car industry in terms of orders placed, as the market scrambles to secure pricing and stock that may not be available in early 2021.