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New car waiting lists at all-time high

  • Average lead time for new cars is between 10-12 weeks
  • Factory shutdowns and stock shortages to blame
  • Cars ordered now could be hit with 20% VAT in 2011
  • Average lead time for new cars is between 10-12 weeks
  • Factory shutdowns and stock shortages to blame
  • Cars ordered now could be hit with 20% VAT in 2011

Buying a brand new car has never been a quick process but soon it'll get worse with the recession putting manufacturer delivery times at an all-time high.

Dealerships selling new cars are fighting a losing battle against low monthly vehicle allocations, a shortage of stock and factory shutdowns. These factors combined mean that the average lead time for new cars in the UK is currently ten to 12 weeks but it may get a lot worse.

How bad is the problem?

Kevin Overton, MD of UK Car Broker and expert on the new car industry, explains: 'On the extreme end of the scale, if you order a brand new Audi Q5 through us to your own spec, you'll be quoted an official factory lead time of 12 weeks. In reality, you could be waiting until May next year for delivery of some models.

'This is largely because each dealer is assigned a certain amount of cars at the start of each year based on projected sales. As sales improved, thanks to the recent government lowering of VAT and its scrappage scheme, many dealers have found themselves already well into next year's allocation and unable to supply cars quickly enough.'

But the problem isn't exclusive to Audi. 

'I have one customer who ordered a Land Rover in February and the car is due to be delivered next week,' adds Overton. 'Since the customer ordered it the model has had a facelift and this means both a new spec on the car - for better or for worse - and also a revised price. As a result the customer must now pay £500 extra the car, whether they wanted the facelift or not.'

So where are all the cars?

Another reason for extended delivery times is the shortage of UK stock. 

Overton adds: 'Cars are just not stored in the UK any more. Most companies have taken Toyota's lead where they build to order rather than store cars in anticipation of a sale. Because we require right-hand-drive cars, it doesn't make sense for the manufacturers to over-produce cars for the UK.'

Economic woes have affected delivery times in more than one way: Ford, Vauxhall and Honda all shut down factories for a limited period last year when demand plummeted, so when demand increased it was impossible to react quickly enough to customer's requirements and this created a shortfall in supply.

And non-EU-based manufacturers such as Hyundai or Kia typically perform worse than their EU counterparts. Cars from Asia tend to sit on boats for between six and ten weeks, further prolonging waiting times.

How does this affect the customer?

VAT goes up to 20% on January 4, 2011, which means that a £20,000 car will you an extra £500. If you pay for the whole car up front before the tax hike happens then the RMIF (retail motor industry foundation) states you'll only have to pay 17.5% VAT. However, Overton contests this: 'a dealer cannot pay for a car until they have it in stock, so the extra VAT will still be payable by the dealer, and so the customer. A few dealers got stung like this last time, so won't make the same mistake again.' 

If you're thinking about paying on finance, be aware that the balance after January will be subject to the extra 2.5% VAT. Long delivery times mean that if customers start a credit agreement now, they may expect to pay VAT at 17.5% as they were quoted upon signing the deal, when in reality the majority of the payments will have a 20% charge when the rate goes up next year.

It's proving to be a minefield and now some consumers, who are not prepared to wait go for cars that are not to their required spec, or cars with delivery mileage. Others may feel it is worth paying over list price in order to get their new car quickly so they opt for cars on motor trade websites, that are available but with delivery mileage.

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