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The car market is changing dynamically. The lack of chips, cable bundles or access to commodities makes the purchase of a vehicle extremely expensive and the rules of the game are changing for everyone.

Car prices have risen by up to 50%
Today, the word inflation registers each of us because it touches us in every way. We see rising prices virtually every day on things like daily consumption, such as food and energy. On durable goods such as an apartment or   car   we usually notice the increase in price only when we need to buy an apartment, house or car. These are not things we buy or sell every day. Ten,   who has not been actively looking for a car in the last 2 years is today in mere amazement, as extreme prices have risen . Let's take a look at why the price of some vehicle models has risen   up to 50%   what are our options for using this increase to our advantage.

Clients practically do not receive discounts on cars

Since the beginning of the COVID-19 pandemic, car manufacturers have reduced car production through supply chain disruptions, mainly due to the introduction and release of lockdowns and other measures, which have led to significant delays in car deliveries. The longer the pandemic lasted, the more pronounced the problem with vehicle delivery.
Due to higher demand compared to supply, car manufacturers began to raise prices for cars, and regulation of manufacturers' discounts did not escape regulation either. Cars   tens of percent began to rise in price, and many people began to delay buying a new vehicle . Car manufacturers had to adjust production capacities to the availability of materials, further reducing production. As a result, although demand for new cars has fallen sharply, demand has remained higher than available supply. Delivery times have been extended to more than 12 months for some models. With a view to the end of the pandemic, everyone was expected that the situation would return to normal. However, this did not happen.

Materials are missing

In February 2022, war broke out in Ukraine. Car manufacturers have not yet recovered from the chip crisis caused by the pandemic and now face a new challenge in the form of a lack of cable harnesses or sheets. Ukraine is a key supplier of cable harnesses to all major car manufacturers in Europe. Current production in limited form is underway, but capacity has been significantly reduced and the stocks at their disposal are smaller every day as supply is complicated. This is one of the reasons why some carmakers are already interrupting production, as they are unable to complete the manufactured cars. On the other side   Russia is an important supplier of iron ore, which in Ukraine was processed into sheet metal , which was subsequently used in the production of vehicle bodies.

Picture showing the road, the car, the transport

Man and woman with boxes at AVIS car rental
The carmakers are interrupting production

This applies, for example   also the Volkswagen plant in Bratislava, which was repeatedly forced to limit production   and a reduction in the volume of vehicles produced is generally being prepared. The cable harnesses are needed directly in the vehicle production process and cannot be reassembled later in the completion of the vehicle, as was the case with some additional equipment elements due to the lack of chips.

The new strong wave of COVID in China does not help the situation

Another factor that strongly influences the growth of car prices is the strict lockdown in China, where the COVID-19 omicron variant caused several monthly closures of major industrial areas. China's zero-tolerance policy in the fight against COVID has caused this   more pressure on our wallets . The result is an extreme increase in vehicle prices, a reduction in model lines and the transformation of car manufacturers to produce electric and hybrid vehicles. Most standard car manufacturers were already prepared for vehicle electrification before the pandemic, but the pandemic accelerated this transformation and a race began among car manufacturers to be the first to be removed from the throne by the world's largest electric car manufacturer , Tesla.

Car   is becoming a luxury

This shortage is seriously affecting production capacity across Europe, putting even more pressure on the production price of the vehicle itself. The car thus becomes a luxury item inaccessible to a mass of people. The situation is beginning to be similar, as we remember before 2000, in our region as well.

Carmakers are changing strategy

The pandemic shows us that the just-in-time production-supply process appears to be inefficient in the event of supply chain failures, and carmakers will have to come up with a solution for keeping raw materials and parts in stock as soon as possible. However, this makes production considerably more expensive. An even more significant impact on car prices is likely to occur in the summer and autumn of this year. Car manufacturers are also focusing on how to open production facilities for various components directly in Europe as soon as possible in order to reduce their dependence on Asian suppliers in particular, making them more self-sufficient.

Prices   used vehicles   they grow fast

Last year, we have also seen a strong increase in prices for second-hand vehicles. Those of us who bought a vehicle 2-3 years ago can easily sell it for the price at which they bought it, if not even more expensive. It is a paradox because the car is a consumer product and is significantly worn out by use. However, deferred demand, which grew during the pandemic, is pushing car prices up today, also given the other factors we mentioned above.

Picture showing the road, the car, the transport

So how do you get to the car and not overpay?

The way out of this situation can be for people and companies   vehicle rental , where the worries with the acquisition of the vehicle and the overall operation falls on the head of the service provider. Whether you rent a car on   in the short term ,   medium term   or   operating lease   can be the ideal solution in today's truly uncertain and economically unsustainable situation in which the car market finds itself. You need to be able to find your way around, so we recommend that you find the time and go through the online offer.

Interest rates are rising, leasing is becoming more expensive
With rising interest rates in banks and virtually all input costs associated with the use of vehicles, it is highly likely that the price of rent, leases or operating leases will also rise rapidly. Therefore, we recommend that you book your vehicle as soon as possible. The price of money, ie interest, is one of the essential components of the cost of a car. Because money is and will be more expensive, car ownership will be even more inaccessible. However, how to find your way around the menu   and is it even possible to find vehicles waiting 12+ months?

How to choose when there is a shortage of cars?
There are many providers on the Internet today   car rental   or providers   operating lease.   Customer priorities are changing today. The most important factor when choosing a car today is its availability and price. The customer no longer has a slow choice if he wants to define the desired equipment of the vehicle. Because specific options are limited and the narrower the configuration is specified, the longer the customer will wait for the car. Even a year or a year and a half. It is therefore ideal to choose   vehicle from stock   and according to actual availability. If you can sign a contract online so you don't have to go anywhere, it's just an advantage that many of us quickly got used to during the covid. In this way, you can make a comparison of what is important for you in the peace of your home or work. Availability, prices or vehicle equipment.

How it goes   online   ordering a vehicle?
The whole process of ordering a vehicle takes place in the online space. The customer chooses from the offer of vehicles the one that suits him best, whether in terms of size, price, motor or equipment. However, the customer should consider in advance whether he only needs the vehicle   shortly   or will use it for a longer period. As is the case, for example, when renting flats, the longer the rental period, the more favorable the price for the customer. If the customer has the opportunity to sign a contract with a specific obligation, whether on   6.12   or   36 months , it gets even better. So when you think about how long it is ideal for you to have a car rented, you choose one of the predefined monthly raids and the contract itself. Therefore, the most important thing is to consider the purpose for which I need the vehicle. Whether small, large, limousine or SUV, with a smaller or larger suitcase,   delivery   etc.

Once I know which car, what's the next step?
In the next step, the customer fills in his personal or company data and automatically receives an email with an information on whether a security is required for the vehicle. In the case of a corporate client, the security is determined by an algorithm after the evaluation of the applicant's financial indicators. As the value of a vehicle normally starts at € 20,000 and ends normally at the sum of € 100,000 for luxury cars, it is important to evaluate the client's creditworthiness, both in a mortgage bank and in a car rental. The algorithm therefore takes into account the predominantly active liabilities of the client, checks the entries in the register of execution and also verifies whether insolvency proceedings are taking place against the client. In the case of natural persons, it is necessary to provide, for example, a bank account statement or an employment contract.

Don't I have to worry about anything?
As part of services   operating lease   As a modern alternative to buying a vehicle, the customer has a carefree use of services. Within the monthly rent, the customer has included services such as compulsory contractual insurance, accident insurance, motorway stamps, assistance service or, in the case of a wider range of services, it is also seasonal overtaking and service maintenance.

The advantages of an operating lease over a standard vehicle purchase are, among other things, in an operating lease:

  • payment of 1 month's rent with included services
  • remote contract signing and digital pick-up / drop-off of the vehicle
  • 100% tax deductible expense in the form of rent without burdening the balance sheet for companies
  • professional and comprehensive care
  • 24/7 support for drivers

In the past, operating leasing was a service primarily for entrepreneurs. It was a form of effective fleet optimization. Today, in addition to entrepreneurs, operating leasing also addresses individuals, ie ordinary people.   Operating leasing   therefore, it is popular with customers who want to focus on things that are more important to them and leave the care and worries about cars to professionals. The service is tailor-made for anyone. " Whether you are looking for a vehicle for your company, for yourself or your family, you are a self-employed person and you are looking for a vehicle that is essential for your business, or you need to ensure fleet management for your entire company. The operational leasing service will save you a lot of time, effort and money , “revealed the CEO of AVIS, Juraj Šulhaň.

See what   vehicles   you know   order online   and have them available .