AS BUSINESS car prices seem to soar everywhere – fuel costs, and Vehicle Excise Duty are two examples – Glass’s car valuation company has some good news for small business owners.
Glass’s has news intelligence that some car makers are looking to realign their prices following the conclusion of car scrappage incentives to boost sales in the business car market – particularly as many companies extended company car leases and ownership cycles during the downturn.
“Company car taxation is a key driver for the price realignment,” says Adrian Rushmore, managing editor at Glass’s. “List prices rose by an average 6% last year, with some model lines increasing by more than twice this amount, and this has made many company cars less attractive for those business users that will have to pay higher rates of benefit-in-kind company car tax.
“The car makers are planning to address this by either dropping prices on selected ranges, or by launching new entry-level models that will establish a new, lower price point for the range.”
Rushmore said that manufacturers planning to launch more affordable entry-level models, there was a danger that the list prices of their new cars could be very close to the current prices of late-plate used examples of a similar specification.
“It will be crucial for manufacturers to position their new entry-point vehicles in the right way to avoid confusion for car buyers unsure about whether they want a new or used car,” Mr Rushmore continued.
“Low specification variants of company cars – especially those in the lower-medium and upper-medium segments – have limited popularity on the new and used market. The best strategy, therefore, will be for manufacturers to stress the low cost of ownership, advantageous company car tax position and the ‘green’ credentials of these new models, in order to shift attention away from specification,” Mr Rushmore added.
Further information
For more on fuel costs, see our special report How to take control of your company’s fuel costs.
For more on the increases in Vehicle Excise Duty, read our news item Road tax changes increase business car prices.
Manufacturers planning to secure business car sales and stem retail sales fall
