Used car values surge amid stock car shortage
Currently, a global lack of microchips has meant delays and shortages in the supply of new cars. This is a challenging time for the auto industry and stock has become very limited. Meanwhile, the surge in demand for stock cars has resulted in inflated used car prices. Usually, in September used car values dip as demand is lower because more people choose the new car, new reg plate option instead. However, that hasn’t been the case this year as in stock cars are in huge demand.
What does this mean for customers?
Long lead times for new cars are causing some motorists to consider a used car instead. However, as used car values surge, customers are paying inflated prices for them. This is expected to continue for at least the next quarter of this year, possibly even longer. That said, when supply outweighs demand again, then used cars will return to their normal market value. This significant depreciation in value over a short period of time, can surely only leave used car owners feeling disappointed. Whereas with leasing, this isn’t a concern for the customer as picking up the tab for depreciation is the responsibility of the finance company.
When speaking to customers, we regularly find that people assume leasing is just one method of funding. This lack of understanding about leasing (and the various funding methods available) along with the unfamiliar territory, can deter some motorists from even considering this option. This is why, when speaking to potential customers, we feel it is key to thoroughly explain what leasing is and the various funding methods. Click here to read our blog about the key steps to leasing a vehicle.
At GB Vehicle Leasing, we are doing all we can to be transparent and honest with our customers about lead times on new cars. We encourage customers to keep this in mind when looking at lease deals. Where possible, our team are working hard to secure stock cars. Rest assured though, there are some new stock cars available to lease, although availability is limited compared to usual. Of course, our leasing consultants are happy to discuss this with you.
Considering part-exchanging your car? No problem, you’ve come to the right place! At GB Vehicle Leasing, we can assist you with part-exchanging your old car for a brand new lease car. As used car values are currently high, now might be the right time to get rid of your used car.
Why lease a new vehicle?
As previously mentioned, one of the main benefits of leasing a vehicle is that the job of selling the car and picking up the tab for depreciation is the responsibility of the finance company. This means with leasing, consumers are aware of how much the car is going to cost them over the term of the lease, whereas when buying a car, you don’t know this. Ultimately, leasing allows the consumer to pass this risk over to the finance company.
When leasing a new vehicle, you can avoid the hassle of getting an MOT as new cars don't require an MOT until they are 3 years old. All of the vehicles we source are brand new, so by the time the MOT is due, you'll more than likely have handed it back to the finance company.
With leasing, you're only paying for the vehicle's depreciation during the time you have it, not the value of the vehicle itself. Because of this, your monthly rentals are usually lower, meaning you can lease a better spec vehicle than you would have bought.
Another main benefit of leasing is generally the finance company is going to get more discount on the vehicles than you will ever get. For example, if a car costs £20,000 then the finance company might get the car for £17,000 due to them buying in mass quantity. Therefore, their purchasing power is much stronger than that of an individual, even if the consumer has cash available to make the purchase. This benefits the consumer because it can reduce your monthly payments due to the finance companies’ discounts.
When you lease a car, you get a brand new vehicle. Not only are new vehicles much more reliable than used ones, but any issues will be covered by the manufacturer's warranty.
For our full stock list and to see how we can assist you further, please call us on 0161 667 5338 or email us at [email protected]. If you’ve found this blog useful, click here for more of the latest news or follow us on Facebook for more updates.