Auto: the French automotive market impacted by shortages

Updated on November 17, 2021

by Saida Boukhers - Consumer credit manager

The shortages of raw materials and semiconductors, largely due to the COVID-19 crisis, have repercussions throughout the production and distribution chain of new cars.This could also lead, in the short term, an increase in the price of used cars.

Drop in registrations in September 2021

In September 2021, private car registrations displayed a decline of 20.47%, which represents 133,835 new vehicles registered, against 210,279 in 2020. Light utility vehicle registrations drop, for their part, 16.51%over this same period.This is the fourth month of consecutive drop in the French automotive market.

Personal cars thus collect the most important part of the supply difficulties linked to the health situation.Semiconductors, essential component of current vehicles, are missing in many markets.This phenomenon has the consequence of raising prices and the delivery time of cars.

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The used vehicle market is also found in tension.Vehicle rental companies, essential suppliers of resellers, postpone the renewal of their fleet while waiting for a more favorable economic situation.This caution is also found in many individuals, because the price increase makes the purchase of a new vehicle that is difficult to access.

The LOA, a solution for auto purchase?

Many households await a climate of the more lenient automotive market to acquire a personal vehicle.For those who wish to materialize their project without further delay, there are several possibilities to finance it: personal credit, car credit or rental with purchase option (LOA) can constitute financing options of choice for buyers.

The LOA, for example, provides for a vehicle rental time over a fixed period, with the possibility of becoming the owner by raising the purchase option by payment of the residual value defined upstream in the contract.

The LOA makes it possible to make use of a vehicle subject to regular technical controls carried out by the owner company (generally a manufacturer).The services offered by this type of rental can in particular include vehicle insurance and the management of possible repairs.The amount of monthly rental payments is generally lower than that of a conventional car loan.However, if the tenant finally wishes to become the owner of the vehicle, the cost of car credit is then lower than the cost of a LOA.

The LOA is aimed at individuals who do not yet know which vehicle to acquire.Thanks to this device, it is possible to change vehicles provided you return the vehicle in perfect condition.

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