28 THE KNOWLEDGE
MAKE
THE
MOST
OF IT
Being British, we love to see the negative in
their sales better and have had some very competitive deals
everything, which is a real shame because where
throughout the year. BMW, unlike in recent years, have tried to rise
cars and fleets are concerned, the current economic
above heavy discounting and rely more on their Efficient Dynamics
CO2-cutting technology to carry them through. Some
climate gives buyers the best opportunity to get the
manufacturers like Renault have been especially hard hit by the
most car for their money that I have seen for fifteen
strong Euro which makes their products look expensive. And 4 x 4
years. Or if you prefer it, spend the least money for manufacturers have been particularly hurt, in a sector that has
their car.
traditionally been pretty resilient.
Either way, we’re in a buyer’s market and you shouldn’t be
All of this is good news for buyers. But there is a potential fly in the
complaining. Yes, the recession is making life tough for most of us,
ointment, namely the leasing companies. Three years ago, the
but the upside is that come the end of it your business will be more
economy was strong and the outlook was good. As a result, many
cost-efficient, stronger, confident and better-placed to take
were bullish with there residual values. Now they are now paying the
advantage of a rising market with fewer competitors.
price for that, as their guesstimate residual values (which they set in
the good times) are not coming true as they were supposed to. This
Where fleets are concerned, the next three months, up until means that, overall, the leasing companies are losing money at
December, are going to be the best period I have ever seen to get auction, and lots of it. If you purchased outright three years ago,
a new car. For the manufacturers 2008 has been tough, retail sales you will be in the same predicament. If you leased, then you fixed
have collapsed and fleet sales have struggled. Their plants have your costs and protected yourself very wisely.
still been building cars and manufacturers are quite vain when it
comes to sales volumes. With sales down, desperate The risk now is that the leasing companies will panic and their knee
manufacturers will be wanting to pull out all the stops to make up jerk reaction will be to reduce their residual values, and in turn put
some volume in the run up to Christmas. their rates up. I can understand this, but it’s entirely the wrong way
to look at it. In three years time, the economy should be on the way
So if you are in the market to buy something, don’t put it off to the up with a plentiful supply of recession-tired buyers. This will lead to
New Year like a lot of people did last year. Take the next few weeks strong used-car values, so if anything they should be putting their
to research the best deals, either on foot or by using a broker. At residuals up now (so bringing prices down).
the time of writing, there are already signs that manufacturers are
gearing themselves up for a final sales push to the end of year. For This is easy for me to say as I am not taking the risk, but as I explained,
example, Mercedes Benz normally puts a chunk of money behind I’ve never known a better time to be a buyer. Make the most of it.
over-aged stock at the beginning of December. This year, they did
it in August. Other struggling manufactures (i.e. the American Source: Richard Mole is MD of Autofunding Solutions
brands) have also started. Audi? Well they normally try and manage www.autofunding.co.uk
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