This guide will cover what you need to know about the delivery timeframe for new vehicles that you source for your fleet.
Please note we have a separate guide designed for drivers on this topic.
Delivery Lead Time Defined
Delivery lead time is the phrase used to describe the time it is expected to take for your new vehicle to be delivered. This will first be used when you are looking at sourcing the vehicle to give an indication of when you can expect to receive it and should continue to be updated until delivery is arranged with you.
A vehicle will be classed as in stock if it is at the supplying dealership or in the UK and expected to arrive there imminently.
These will be able to be delivered to your driver fairly quickly after the order is placed, provided the finance documents are completed promptly.
The typical turnaround time once finance documents are complete and the vehicle is at the dealership will usually be around a week.
A factory order is one that is placed for a specific vehicle to be built with the factory, which is usually done via a dealership, broker or fleet manager on your behalf.
The benefit of a factory order is that you can choose the spec level and any add on features that you want to ensure the vehicle fits your needs.
However, a factory order will need to join a production schedule and depending on demand this can be quite a long queue and so have a longer wait time for the vehicle to arrive with you.
What Impacts New Vehicle Delivery Lead Time
There are a number of factors that can affect how long it takes for a vehicle to arrive with your driver.
The first is whether it’s in stock or a factory order, as mentioned above factory orders take longer to arrive than in stock vehicles.
There are a number of factors that influence how long a factory order takes to arrive including:
Model of vehicle – depending on the demand for the vehicle chosen and the options you have selected the model could be in high demand and so have a long waiting list, or on the other side it might not be in high demand so the manufacturer will not have it prioritised very high in their build schedule.
Spec and additional extras – the spec level and any additional extras chosen can also extend the lead time. If you decide to add anything after placing the order but before it is built this may put the vehicle to the back of the production schedule which will extend the lead time of it.
Time of year – factories often have production cycles, where they produce a particular model between set dates and annual closures that they work around. This means that the time of the year that you place your order can impact how long it will take to arrive.
Factory location – very few manufacturers still produce vehicles in the UK and so shipping time has to be factored into the lead time, so depending on where in the world the factory is based this can take several weeks.
Both factory and stock orders can be delayed if their paperwork is not in place.
Unlike a personal financial agreement, business’ will not usually have a cooling off period but most companies will still not arrange delivery until documents are signed and approved by their finance team.
We advise ensuring that any finance agreements are completed as quickly as possible once they are received to avoid any hold up in arranging delivery based on these not being done.
The location that you want the vehicle delivered to might also have an impact depending on where the dealership is based. Some southern dealerships only have transporters going to Scotland a couple of times a week and vice versa.
Covid’s Impact on Vehicle Production and Delivery
Covid has had a massive impact on the automotive industry, and the long-term effects are still unveiling themselves.
At the minute we are seeing delays across nearly every manufacturer due to a number of factors.
The first is that with various lockdowns around the globe factories were shut for a period of time. Although demand was way down there were still new orders being placed during this period, so not only was there a backlog of orders to be built when the factories reopened but also new orders being added to this.
When factories reopened they had to put in place measures to keep their employers safe, minimise the risk of Covid being spread through methods like one way systems and more spacing between assembly points, and complying with national regulations. This slowed down the production when they were able to begin building vehicles again and means that rescheduling the build weeks of the vehicles that were missed during lockdowns was a little more complicated.
The second is a worldwide shortage of semi-conductors. Semi-conductors are microchips that are needed throughout modern vehicles in order for the functions to work correctly.
Because of the conditions that are needed to produce these microchips they are only made at a small number of factories around the world, and 70 % come from just one Taiwanese supplier.
During the pandemic with factory closures and lower demand due to lack of travel many car manufacturers cancelled their semi-conductor contracts with these producers so that they did not have to continue paying for the parts when their sales were down and have a stock pile of them at factories.
It’s not just cars that need microchips to work, a lot of modern technology does, and so although the demand for microchips from car manufacturers reduced during the pandemic the demand from others, such as tech companies producing tablets and laptops, rose. This meant that the factories manufacturing microchips had more demand from the technology companies, and that when car brands did reinstate orders they were further down the queue as they’d lost their initial position when originally cancelling the contract. The chips tech companies need are slightly more sophisticated than those used in cars, and the factories can only produce one type at a time due to the different processes needed.
It’s not just factories who had to put in place Covid measures to protect staff and customers, the ports and transportation companies also did. This not only means that there is additional cleaning and usual processes may take a little longer but a lot have also put in place measures such as if a driver tests positive for Covid then any vehicle he has been in the last 24 hours will need to sit for three days then thoroughly cleaned before being transported onwards.
Brexit has also had an impact on the transportation time it takes for your vehicle to arrive at the dealership.
Although it is less now then when changes were first introduced there are additional forms to be completed and additional checks may be required when a vehicle is at the port and this takes additional time.
The shortage of HGV drivers has also impacted the vehicle industry as you require a HGV licence to drive a transporter which is how most vehicles will be moved from the port to the dealership.
Though it doesn’t seem to be a major issue right now this is one we’re keeping an eye on as we expect the driver shortage in general to remain a problem for the UK for a few more months yet.
Top Three Tips for Managing Driver Expectations
We know that drivers can be impatient to receive a new vehicle which can be difficult to manage, so we’ve put together our top three tips to help prevent this.
1. Be realistic – let them know that there are few stock vehicles available and that factory lead times are long so they might be in their current vehicle for longer than expected. Being honest with the delivery lead time estimates will help keep their expectations realistic.
2. Keep them informed – whenever you get an update on the vehicle you should let the driver know whether it is good or bad. This will help manage their expectations as the order progresses.
3. Help them if delayed – if their new company car is delayed then you’ll want to keep them mobile, either by extending the agreement on their current vehicle or arranging a temporary rental.
For more guides head back to our business guides homepage or if you’d like to speak to someone about sourcing new vehicles for your fleet and the current lead times then please give us a call on 01722 322 888 or request a call back here.