Limited availability of one-way rental vehicles an issue, says DMN Logistics

The lack of availability of new cars is resulting in limited availability of one-way rental vehicles and an increase in costs, claims DMN Logistics.

It says it has seen a 40% rise in the cost of hiring a vehicle, which is impacting the collection and delivery of new and used cars.

The Birmingham-based national vehicle movement and inspection firm says that the increase in costs is being absorbed by delivery firms but at some point, will have to be passed on to companies and retailers.

Nick Chadaway, managing director at DMN Logistics, said: “With carmakers prioritising selling to dealerships rather than into the rental sector, which typically buys in bulk, rental firms are left scrambling to find stock to meet the demand to replace older cars.

“They are having to hold onto vehicles longer, which makes them more costly to run and also limits their use, and that is directly affecting the logistics sector.

“One-day hires, even on return-to-originating branch, are becoming harder to source which leads to longer lead times on new car delivery.

“We are also seeing many rental companies exit the one-way rental business altogether or increase their charge structure, typically by adding anything up to £50 per transaction on top of the daily rental pre-covid charge.”

As a result, Chadaway says the firm is having to find other ways to transport delivery drivers, like sourcing larger vehicles to carry more drivers or taking on longer-term hire cars.

He concluded: “Whilst customers are seemingly accepting of the pressures currently within the sector and despite the challenges we are facing and for long term viability, it’s vital that businesses focus on managing their vehicle collection and delivery service and continue to prepare services for a sudden demand once the chip shortage eases.”