Rise in fleet costs drive fleet subscription

2 May 2023

The COVID-19 pandemic has disrupted global supply chains and caused significant disruptions to various industries worldwide, including the automotive industry. The pandemic-induced global semiconductor shortage and supply chain disruptions have led to a rise in new car prices around the world, including Australia. This has put continuous financial pressure on businesses to sustain or grow their fleet and driven the move to fleet subscription.

Global Supply Shortages Impact Fleet Costs

According to recent reports, new car prices in Australia have gone up by approximately 5% year on year since the COVID-19 pandemic started. The shortage of microchips, which are essential components of modern vehicles, has led to a production slowdown and supply chain disruptions, resulting in a shortage of new cars in the market. This, in turn, has led to higher prices for the limited number of available new cars.

While the prices of new cars are slowly starting to drop as inventory stock supplies are replenished, the costs are still far higher than the Consumer Price Index (CPI) at the beginning of the pandemic. This puts a financial strain on businesses that rely on fleet vehicles to operate their businesses.

Source: GoAuto

Kia, available on Fleet Subscription at Karmo

Source: Kia

Fleet Subscriptions Vs Ownership 

A solution to avoid the financial pressure of buying new fleet vehicles is fleet subscription. Fleet subscription is a flexible and cost-effective alternative to traditional fleet ownership, which involves significant upfront costs, finance, debt, and risk.

With a fleet subscription, businesses can access a fleet of vehicles without the need for large upfront costs. Instead, businesses pay a monthly fee for the use of the vehicles, which includes maintenance and servicing costs. This eliminates the need for businesses to invest a significant amount of capital upfront and minimises the financial risk associated with owning a fleet of vehicles.

Fleet Flexibility 

Moreover, fleet subscription provides businesses with flexibility. Businesses can add or remove cars as needed with short and mid-term contract options. Meaning businesses can scale their fleet up or down depending on their needs, without incurring additional costs or penalties.

Fleet subscription also provides businesses with the flexibility to swap vehicle types as needed to a new make or model. This ensures that businesses have access to the latest vehicle models, which are often more fuel-efficient and have better safety features, without the need for them to purchase new vehicles themselves.

Electric Fleet Options

Finally, fleet subscription provides businesses with accessibility to electric vehicles. As the world transitions to cleaner and more sustainable energy sources, electric vehicles are becoming more popular. Fleet subscription allows businesses to access electric vehicles without the need for them to invest in expensive infrastructure. This includes charging stations, which can be costly and time-consuming to install.

Subscription, a Flexible Fleet Management Solution

The rise in new car prices around the world, has put continuous financial pressure on businesses to sustain their fleet. Fleet subscription offers a cost-effective and flexible alternative to traditional fleet ownership. Providing businesses with access to a fleet of vehicles without the need for large upfront costs, finance, debt, or risk. Learn more about why subscription is perfect for new or growing businesses.

Fleet Subscription Brisbane, Sydney, Melbourne, Adelaide, Perth

If you want to learn more about Karmo’s risk free subscription options for your new business, enquire with Karmo today. Alternatively, you can learn more about Karmo Fleet Subscriptions or browse our great range of vehicles.

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