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Is it time to bring your fleet purchases forward?

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A mate recently bragged about how he sold his second-hand 2004 Hilux for $3K more than the purchase price back in 2018. Usually, this throw-away statement is something data analysts at Fleetyr don’t take seriously, particularly this friend who tends to embellish by about 19% after 5 schooners.

We thought we would look deeper into his claim and help give you some insight into the current fleet buying opportunities, threats, and the history of why we currently find ourselves in this situation.  

As reported in the NY Times, Toyota will reduce production by 40%. Similarly, General Motors and Ford will be cutting production as well. This is due to a global chip shortage influenced by:

All of the above has created a downturn in the automotive industry, which meant car manufacturers kept making cars but couldn’t deliver them because the chips (about 1400 per vehicle) still needed to be installed.  

As a result, car manufacturers are holding onto an extensive amount of stock with no chips. In the short term, this will cause a shortage of supply which will cause new vehicles to increase in price marginally.  

We expected to see vehicle prices rise by 3-5% based on our modelling, however, with a shortage of new vehicles, the normal turnover of used stock will also dry up.  

In Australia, the used car market has become a sellers’ market, with sellers now getting a significant return on a vehicle than they would have two years ago.  

The data suggests that if you can get your hand on new stock now (before any prices increase), you can get rid of your old vehicles at higher-than-usual 2nd hand prices.  

Furthermore, you’ll want to take asset depreciation more seriously. For fleet vehicles that are two years old or more, you’re likely to have depreciated them too much for tax purposes. Due to the great price you’ll get from a sale, there will likely be a tax burden to bear on the difference.

Is your head spinning from all this information? Reach out to Fleetyr to get moving in the right direction and make the most out of your fleet!

Tim Hill

As an experienced startup leader hailing from sunny Queensland, Tim is a natural problem solver and innovative thinker — yet simultaneously everyone's best mate. As the Founder and CEO of Fleetyr, Tim is on a mission to bring affordable, simplified, and integrated mobility analytics to the entire industry worldwide. Connect with Tim.