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Company Vehicle Warranty Extensions being neglected amidst vehicle supply issues.

by | May 26, 2021 | All Articles, Finance | 0 comments

Vehicle Supply Issues Could Create Issues For Businesses Left Without Warranties.

Cazana – the used vehicle data specialists – report that sales of used cars have increased by almost a third. It certainly isn’t an exaggeration to say that the used car market has suddenly flourished.

The main driving factor in this seems to be the issues in the supply line for new vehicles. As a result, businesses and fleet managers, are having to make some tough decisions with their current fleet of vehicles.

With thanks to Mike Hall – Senior Account Manager at Warranty Assist – we look at the reasons behind this trend – and why current climate could be creating a huge issue further down the line.

The issue with new vehicle supply.

Before tackling the big issues, let’s just have a quick recap of why we are where we are.

As previously reported in The Fleet Adviser – there has been a vast reduction in the number of semiconductors available which has had a chronic impact on new vehicle production.

Semiconductors are used in everything, from home PC’s to fuel flow monitoring systems in vehicles and during the pandemic, demand from the automotive industry to other priority industries at the time.

issues with new car supplies have been forcing people to look at used cars

Issues with new car supplies have been forcing people to look at used cars

As a result, some car manufacturers have halted production to allow the supply of semiconductors to catch up with surge in demand in the automotive sector.

The Impact on the Used Car Market

Whilst March and April are traditionally a quieter time for the used vehicle market, this year demand has shot up – and in turn, this demand for used vehicles is a large part of the reason why used car and van prices have jumped up as well.

It should be noted here, that there are other factors that have increased used vehicles sales other than the lack of supply of new vehicles.  People having more disposable income to be able to afford a car is one factor. Even people wanting to avoid public transport during a pandemic is being cited as a contributing factor.

But for fleet managers, business owners, brokers and others responsible for business vehicles, a the issues in the supply of new vehicles, has proven to be a real problem – which in turn could lead to an even bigger problem down the road if it’s not recognised and tackled right now.

What does all of this mean for businesses like yours?

Where normally a business would be looking to switch their fleet into new vehicles, the fact is that because those vehicles simply aren’t there, the options become somewhat limited. 

The upshot is that many businesses have opted to stick with what they have. And it certainly makes sense.

But there is a potential problem in doing that;

For many businesses, the existing warranty arrangements are not being carried forward.

As a result, they could be sat on a bit of a ticking (and very expensive) timebomb.

Even for those businesses opting for used cars, whilst many used car dealers will now often offer their own warranty packages or optional packages with their vehicles.

This in itself can be problematic in instances where the warranty may not be sufficient for your specific needs.

In Conclusion.

The new vehicle market will get back to normal, but the timescales vary from vehicle to vehicle. It certainly isn’t going to be today, or tomorrow. So in the short term, carrying on with your current vehicles is a viable option.

BUT, without an extended warranty you really are running the gauntlet somewhat.  Without a warranty, you don’t need us to tell you that the implications can go way beyond repair costs.

It’s always worth checking your options – as well as peace of mind, it could save you a lot of time and money.

If you would like more information on the latest warranty offers from our extended warranty experts, then please complete the form below.

 

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