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YOUNG AT HEART: Order now to avoid delay

Date: 29 June 2009

Tristan Young is Editor-in-chief of BusinessCar

News this week that order times on some new cars are rocketing is mixed news for the business car industry.

The longer delivery times means that fleets or leasing companies will have to factor in the cost of covering that delay by either extending a contract or getting a short-term hire car, if disposal is essential.

However, for once the positive probably outweighs this negative.

Firstly, the fact that fleets can't buy a car from stock means that the motor industry's overcapacity may be reducing to a point where supply and demand are nearer. In the past, overcapacity by car manufacturers has depressed residual values and put jobs at risk.

Secondly, ordering a car, rather than picking one from stock, means fleets will be able to choose the exact specification, colour and variant of vehicle to suit their business and again maximise residual values.

However, it's in the broadest sense that this is good news. Following months of recession, and more specifically contract extensions, businesses are once again feeling strong enough to order new cars.

Bring on the green shoots of recovery.