What does the semiconductor crisis mean for company car fleets? Car News

Unforeseen expense Fleets typically budget for specific lifecycles, and many need to extend contracts to keep employees on the road. That can mean running vehicles beyond their warranty period, with the potential for expensive maintenance bills and disruptive downtime, especially for hard-working pickups.

Higher tax bills The Association of Fleet Professionals (AFP) has noted continuing problems for drivers waiting longer than expected for electric or plug-in hybrid company cars. With new ultra-low company car tax brackets for vehicles officially emitting 50g/km CO2 or less, the ripple effect of delivery delays is excess benefits in kind and national insurance.

Used car inquiry One of the few results is a very strong used market, as potential new car buyers shop around to avoid long wait times. After a spike in values ​​in the summer of 2021, auction prices are about 12% higher than a year ago. This is good news for fleets that trade in end-of-life vehicles, but they could be waiting a while before being replaced.

What can fleets do to minimize disruption?

The consensus is that the shortage will continue for most of 2022, so it will be some time before the market returns to normal. If you have vehicles that need to be replaced in a few months, it’s worth starting that procurement process as soon as possible. This will allow time to work out a Plan B if necessary (some leasing companies allow customers to extend contracts if deliveries are delayed).

It’s also important to assess what equipment is vital for drivers and don’t rush to take everything that’s available. The Association of Fleet Professionals has warned operators to beware of “disgruntled” models that lack safety features, as these could lead to duty of care issues and affect future residual values.

There are also opportunities. Manufacturers are striving to meet strict average CO2 targets for new vehicles this year, so plug-in hybrids are a priority for them. With generous tax incentives introduced last year, accelerating the electrification of your fleet could be the attractive silver lining of tough times for the industry.