Home » Business » The price of the car for the “opera” increased by up to a quarter. Customers stop dictating to themselves

The price of the car for the “opera” increased by up to a quarter. Customers stop dictating to themselves

A big problem is the lack of cars on the market due to the problems of car companies. And long delivery times. This brings several new trends, all the operational leasing providers contacted by the editors agree.

Above all, customers stop “dictating” what kind of car they want and are satisfied with a different brand than they originally preferred.

“In the current situation, it is not a problem to wait over a year for a new car. Previously, it was almost unthinkable for a customer to get out of an Octavia and switch to a Kia Ceed or Hyundai i30, from a Fabia to a Peugeot 208, or from a Skoda Kamiq to an Opel Mokka. However, the quality of car manufacturers has improved a lot, so customers are significantly more willing to try brands that they would not have thought about in the past,” says Jan Hrubý, director of Mototechna Drive.

“The interest of companies is growing slightly, instead of traditional Škoda fleet cars, they are focusing more on other brands, for example Hyundai, which has shorter delivery times for some models,” confirms Pavel Louda, owner of CAR4WAY.

They have the same experience in Drivet. The Hyundai i30 combi is currently the most requested car for an “opera”. Not only because of the availability, but also the price.

“For this model, we are around six, six and a half thousand without VAT monthly installments. That amount already includes warranty service, tires, all insurance,” says Adam Szabó, CEO of Driveto, in an interview with SZ Byznys.

“We have to respond to shifts in car production related to the current market situation. This leads to the extension of existing contracts. Customers are also more likely to use alternative car brands that are available for rent earlier or on more favorable terms,” ​​comments Aleš Polák, CEO of leasing company Arval, on the market situation.

Extending existing contracts is another common practice that everyone agrees on. Before the new car arrives. Some customers thus find a way out in the used car market

“We can see this in the interest in cars returned after operational leasing, which we sell on our CarNext sales point. It is a very reasonable solution for many private buyers, as well as entrepreneurs or smaller companies, because they are generally younger vehicles that have been properly serviced all along and have a transparent history,” Martin Brix, CEO of LeasePlan, tells SZ Byznys, which is a global and domestic leader in the management of company car fleets.

Prices are (after) flying up

According to the head of Drivet, it is clear that the Czechs have started to save on this item as well. “While they used to ask for cars a little above their means, the last few months show that they are more modest in this regard and look more at money. Previously, they wanted a car for around 11,000, but today we are paying 1,500 less per month,” says Adam Szabó, adding that companies are also being cautious.

At the same time, operating leasing prices are rising and will continue to rise. They copy not only inflation in general, which exceeded 17 percent in June alone, but also car prices and the difficulties of their manufacturers.

“Taking into account the current economic situation, when interest rates are rising, the cost of servicing or components, such as winter tires, when cars have become more expensive year-on-year by 15 percent, is also rising, so of course this was also reflected in the repayment of operating leases and rentals. Year-on-year, the increase in the amount of installments is around 25 percent,” quantifies Jan Hrubý, director of Mototechna Drive under Aures Holdings.

According to Pavel Louda from CAR4WAY, the trend of price increases will continue. “The pace of price growth will depend on the development of the economy. The rise in interest rates is related to a new trend where companies are thinking more about whether now is the right time to renew their fleet,” he says.

Nevertheless, according to rental providers, this route is still advantageous for many. “The increase in operating leasing prices is disproportionately lower compared to the increase in the cost of financing a car with other financial products, for example financial leasing, or buying and operating a car for cash,” believes Aleš Polák, CEO of the leasing company Arval.

The view of the association

In the first quarter of the year, the volume of leasing and loans for new passenger cars and the number of financed cars grew year-on-year. Member companies of the Czech Leasing and Financial Association (ČLFA) provided households with 888 million crowns, 5.3 percent more year-on-year. The number of new passenger cars in this category rose by 9.3 percent to 2,830. Companies borrowed 5.78 billion crowns from ČLFA members for new passenger cars, 2.4 percent more than in the first quarter of last year. For companies, the number of new passenger cars this year rose by 1.8 percent to 9,286.

According to the number of newly concluded contracts, the share of operational leasing was 13.3 percent in the private sector and 46.8 percent in the corporate sector.

In the last three years, the association has observed a constant increase in the average amount of a lease or loan for a new passenger car. Last year alone, there was a year-on-year increase of 13.5 percent for households and 6.6 percent in the corporate sector. In the first quarter of this year, this trend was disrupted for the first time in a long time.

It cannot be ruled out that both private interested parties and business entities have begun to perceive worsening macroeconomic developments, especially high inflation, and are therefore more cautious with investments.

Jaroslav Krutilek, general secretary of the ČLFA

“It cannot be ruled out that both private interested parties and business entities have begun to perceive worsening macroeconomic developments, especially high inflation, and are therefore more cautious with investments. On the other hand, it is still true that the situation on the market for new cars, i.e. their shortage and the constant increase in the price of all inputs, tends to lead to further price increases. It is therefore premature to conclude that there is a more permanent change in the current development. We’ll see what numbers the next months will bring,” says Jaroslav Krutilek, ČLFA general secretary.

Despite the fear of price increases and the difficulties of car companies, for example, Driveto expects to grow by 50 percent this year to 300 million crowns from last year’s two hundred. It grew by 35 percent in the first half of the year alone.

“The interest and growth is not as aggressive as we promised at the beginning of the year. Because the cars are not in stock, even if the interest was higher, you are not able to deliver so many cars,” says the head of the company, which aims to deliver the car to the customer two weeks after the order.

“And as the results in the Deloitte Technology Fast 50 show, this is exactly what works. Already in the first year, when Driveto signed up for the program, it took third place among the fastest growing companies in Central and Eastern Europe in the main category,” says Kateřina Tóthová, senior manager in Deloitte’s audit department.

The future belongs to technology

According to the secretary of the Czech Leasing and Financial Association, operational leasing will have a significant position on the market in the future as well. “Non-bank instruments, including operative leasing, will serve well in the expected strategic societal processes, such as the transition to a low-carbon economy, which will require massive investments not only from the public but also from the private sector. Many companies, especially small and medium-sized enterprises, will implement them precisely with the help of non-bank financial products, i.e. operational leasing,” believes Jaroslav Krutilek, secretary general of the ČLFA.

Regarding the further development of financing, according to the head of the market leader in its Lease Plan category, we are on the threshold of more significant changes, which will be related to the advent of alternative drives, but also to a shift in the perception of cars by clients, especially the younger generation. According to him, today’s heated situation on the energy market will accelerate investments in technological development even more.

“In particular, investments in solar systems installed on family homes will increase significantly, and electromobility will then become the most financially reasonable way for their owners. It will strengthen the demand for electric cars, but also for their financing. Considering the prices of electric cars, most users will finance them from external sources,” says Martin Brix, adding:

“We expect that operational leasing will also benefit from this, in which the initial down payment is omitted and the customer pays in regular installments only the part of the value of the car that he uses during the lease period.”

Watch the full interview with Adam Szabó, CEO of Drivet, in the introductory video.

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