20% increase recommended for vehicle delivery costs

21 Sep, 2021

DMN Logistics, a Birmingham-based inspection firm, has recommended a 20% price increase to collect or deliver vehicles in the UK as part of an effort to sustain stock volume levels. This might not be bad news for small motor trade businesses; after all, it’s pretty common to collect new stock yourself. However, it’s definitely something to keep in mind if you’re using a collection company to pick up multiple cars for you.

The current state of affairs is looking a bit worrying, with stock shortages of new cars still trampling the industry and – in some cases – used cars now costing more than brand new. This was fantastic news for second-hand car dealerships both big and small, but now it’s caused stock shortages of used cars to spike, making it more difficult for smaller businesses to source used cars. To top it off, this shortage of stock alongside the lack of HGV drivers on the road is causing motor trade lead times for both new and used vehicles to take a hit.

Why a 20% increase in delivery and collection costs?

The 20% increase in car delivery costs has been recommended by DMN Logistics as a way to ‘support the measures that the industry must implement if it is to sustain the volume requirements of the sector.’ By raising delivery and collection prices, DMN hope to ‘ensure [the] continuity and the quality of service levels’ within the industry.

As stock becomes more difficult to come by, there’s also been the knock-on effect of longer average journey times to collect second-hand cars. Motor traders are now willing to go further afield to get their hands on new stock, with a 12% journey time increase recorded in Q1 and Q3 this year. There are still plenty of half-empty transporters on the road, too, with carriers not able to reach full capacity and some even driving empty. This has then caused a few car multi-loaders to add additional drops to their route just to increase the load. To combat this, some buyers are purchasing multiple cars at once so that they can get their money’s worth from each journey.

For those hoping to ride out the wave, it looks like its set to be a long run. Nick Chadaway, Managing Director of DMN, has said that these issues could be here for some time: ‘Some of the pressure points affecting the sector will continue past the first quarter of 2022 and will not start to ease until we see the return to normal levels of new car and van availability.’

 

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