New car announcement time again offers fleet men an opportunity to review their entire purchase and control program. With so much of a car’s cost tied into the depreciation factor, it almost becomes mandatory for a fleet manager to apply his talents to the new model “fiscal year.”

In talking to these fleet men who represent every type of control, it reminds me again that a large number of the actual buying decisions are made well before the official announcement date. These decisions for a particular model car, color, engine power and so on are made quite rationally, and more importantly, are based on the cost performance and economics experienced during the last year or two year period.

This buying pattern probably results in the apparent lack of enthusiasm by fleet men at fleet previews. While they react with interest to new technical and engineering advances, the professional fleet man must understandably await proven performance of the new car on the road and ultimately, on the auction block.

Fleets will account for one out of every twelve new car purchases during the next year (probably close to 900,000 cars) so the auto companies rightfully tune a sensitive car to the reaction and the acceptance of their new products by the volume buying fleet professional. It is obviously an opportunity for fleet men to voice their need for continued research for more efficient engines, longer tire life, better co-ordination on warranty claims and additional development toward plain old economy of operation.

“Tight money” is a phrase heard often these days and many of the economists report that it will become even tighter in the near future. In assessing the affect on the leasing business, we have talked to some of the industry’s leaders. If their tone is correct, it is, and will be, an even greater opportunity for growth in leasing.

One thing is certain, the smaller leasing company that cannot obtain the capital will fall by the wayside. The larger and healthier companies with good credit and experience are now receiving more inquiries than ever on leasing.

Business, as well as the individual leasing prospect, is looking for any possible way to make more money available and leasing obviously is one answer. It should lend strong support toward an accelerated growth in an already robust business.

After sitting in on the well planned AALA Fall meeting among the nation’s top professional lessors, it became evident that the used car market must be the greatest single threat to profits in the business, Bob Nathan, noted economist, presented a fine analysis of the results of new research integrated with previous used car market studies to offer an explanation and an understanding of what has happened in the market.

Two observations were evident; (1) there is a great deal of reward to one’s business in belonging to and participating in a good association, such as AALA, to benefit from the results of those efforts. And (2) the complexities of the auto market and particularly of the multitude of direct and indirect influences on the used car market (such as fiscal policy, availability, population, etc.) make the predicting of future values as difficult as choosing a pennant winner in the National League.

 

0 Comments