Even in a buoyant used car marketplace, taking the time and care to maximise defleet value is important
The used car market is experiencing something of a perfect storm, with the combination of new car supply issues and reduced volumes of used models coming to auction pushing prices up despite the wider pandemic-related economic issues.
“Used car stock is short at the moment and new car supply is also restricted, putting pressure on retailers to find cars to sell,” Cazana director of insight Rupert Pontin tells Company Car Today.
But that doesn’t mean businesses defleeting vehicles can let anything slide in the quest to secure best value for their cars.
“Not making sure that all the parts of the car are with it at the point of collection is a huge mistake,” says Pontin, who adds that pressures caused by the pandemic have meant fewer checks and more cars being defleeted with missing items, such as parcel shelves/covers, service book and handbooks, and even missing charger cables for electric and plug-in hybrid vehicles.
BCA’s UK COO, Stuart Pearson, adds: “With many vehicles now having electronic servicing records, it’s important that access is provided to this information at point of remarketing, as a vehicle without any evidence of history will certainly have its value impacted.”
This is where a good fleet manager can earn their money. “A business must have the car fully inspected and the condition agreed with the user/driver,” says Pontin. “This will enable hassle-free financial claw-backs/charges on the agreed contract condition.”
MUST HAVES FOR A CLEAN SALE
Locking wheel nut key
FAILURE TO PREPARE
The issue of preparing a vehicle for sale is a tricky one, because you want money spent pre-sale to be recouped in the auction arena.
“Preparing a vehicle correctly at defleet will secure the best possible price, and help it sell more quickly,” says BCA’s Stuart Pearson. “Vendors who offer cars in ready-to-retail condition make their vehicles attractive to the most extensive buyer base and help create demand.
“Clearly there is a balance to be struck to optimise the investment in refurbishment against the final sale price, and speed to market and data should be used to drive these decisions,” he continues.
“Smart repair techniques continue to improve and when completed to a high standard, can have a dramatic impact on the condition of a vehicle.”
Cazana’s Rupert Pontin agrees, to a point: “The key is to make the car look as good as possible, reducing the amount of cosmetic work a dealer would need to do to the car, but it’s a decision to be approached with caution.
“With the used market so vibrant, it is difficult to understand the benefit of refurbishing cars to put them into a better NAMA grade condition,” he says. “Taking taking a lightly damaged car to auction will probably have little impact on the sale price.”
TIPS TO HIT TOP VALUE
BCA’s COO UK Stuart Pearson offers his expertise on how to maximise value when defleeting a car
1. Be bang on with the basics.
We talk about the remarketing basics a lot and these haven’t changed in many years. Vehicles that have everything they need for sale demonstrate an appreciable improvement in sales performance. Conversion rates improve, meaning average time to sale is reduced and holding costs are decreased.
2. Specify the spec
Additional specification and paint choice added to a vehicle when new can add significant value when the vehicle changes ownership and becomes a used vehicle. On many modern vehicles, identifying the correct manufacturer colour along with the additional equipment is not always an obvious process and therefore this information becomes crucial at point of remarketing.
3. Ready to go?
It is clear that professional buyers gravitate towards those vehicles that are offered for sale in ready-to-retail condition. It means not just retail-standard presentation and condition, but ensuring vehicles are offered for sale with V5, MoT, service history, spare keys, locking wheelnuts, sat-nav discs and any other items that make a car complete.
4. Realistically valued.
The principal reason that a small number of vehicles don’t sell first time is that there is an unrealistic expectation around the vehicle. This can be as a result of failing to follow the remarketing basics, or not having looked closely at both the cosmetic and mechanical condition.
5. Reassess to remarket.
In the event that a vehicle is unsold, the advice is to review all of the information on the vehicle for accuracy, revalue the vehicle where appropriate using real-time data, invest in any appropriate refurbishment that may have been declined at point of original sale, and push the vehicle into the most appropriate channel as quickly as possible.