27th July 2022 | Author: John Murphy
Why is it so hard for me to get a box truck in Ireland currently and why do you guys seem to have them off the shelf?
This is a great question. Despite the current waiting times for commercial vehicles, there is still a good number of units coming through. If you are a retail customer looking to buy a box truck for your business there are a number of hoops to jump through, let have a quick look at the process that a retail customer goes through to get a box truck with tail lift.
As you can see from the above example, lead time on a relatively in stock model can take 9 months from start to finish. Now if we start looking at harder to source vehicles such as Mercedes Sprinter units, the wait time on the chassis can extend to 1 year currently.
It makes little sense for the one off customer to wait such a long period of time on a box truck in Ireland.
Up until october of last year Opel were offering 0% finance on their Movano Range of trucks ( Full disclosure - we are a Opel Van and Truck Dealer) , looking at the apparent rate of inflation then I recommended this in particular to Customers who were purchasing all chassis vehicles, Box units, curtainsiders and Tippers, because this rate applied to the overall package, eg body, tail lift, windbreakers etc. It is now 2.9% and I regret not getting more customers onboard at the 0% as it was a superb deal, although 2.9% currently is certainly a lot lower than the bank rate.
Anyway, the purpose of the preceeding paragraph was to say that money is not getting any cheaper and with both the Fed and European Central Bank raising interest rates twice in the last 6 months to combat inflation and restrict money supply we can also expect further increases in the cost of finance on commercial vehicles.
Now lets get to Vehicle prices and the dangers
One lesson that covid and lockdown highlighted to Vehicles Manufacturers was that volume does not equate to profit. With the reduced supply and spiraling used values it became apparent to the stressed manufacturers that the could charge more for new vehicles and this has continued for the last 16 months or so.
I was recently asked to renew a contract that we did in 2020 for a fleet of vans, start date to be January 2023. The unit cost to me per unit in 2020 was 28,700 per unit ex vat. The current price of those units is 37,750 ex vat with an estimated delivery date of March 2023.
The real kicker is that price protection is not guaranteed going forward, so this figure could rise prior to delivery. Manufacturers are able to do this currently because they can and many price protection plans are not being honored, a good description of the current state of play can be found at https://www.fleetnews.co.uk/news/fleet-industry-news/2022/07/25/manufacturers-refusing-to-honour-price-protection-pledge-to-fleets?
So, what is the best course of action?
Being a rental and lease guy, you can probably guess. What I would stress is the now that Manufacturers have gotten a taste of lower volume and far higher profits, they have stopped chasing numbers and buying market share. We are seeing continual price rises that seem to be increasing in frequency.
I would recommend trying to find a dealer who can offer price protection, a clear delivery date and if need be rent for the interim. What I would not suggest is overpaying on the used market currently, frankly used luton style vehicles are priced far too high. This is primarily due to the fact that the primary source for this vehicle type used has been the UK and used prices there are currently higher than Ireland so imports have trickled down to a standstill over the last 18 months. Irish users tend to do higher mileage and keep the vehicles longer than their UK counterparts and hence the secondary market for tail lift and luton style trucks has pretty poor offerings.
What about the title of this post, do you have units in stock?
Actually, we do. We have been pre ordering ,building and adding as many units as we can to the hire fleet for the past 24 months and are well stocked to provide both lease and short term rentals of box trucks in box 2022 and 2023.