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September 24, 2009updated 12 Apr 2017 11:58am

Effective remarketing tips

Over the next 12 to 18 months we may well see a change in the profile of stock entering the remarketing arena direct from fleet and leasing companies.

By Tony Gannon

If demand stays at current levels, then it could be tempting to think this disparity will be of little consequence. But what if supply and demand become unbalanced, or the economy takes another turn for the worse? Hoping for the best is not a strategy, but addressing the five basic, but vital elements of vehicle remarketing will give any seller a head start.

Condition: Some minor damage at the end of a fleet contract is perfectly acceptable. What is not acceptable is in-service damage that is not reported by the driver and deteriorates over time. What can you do? Make it part of the driver’s duties to report any damage in service. Why not introduce a mid-lease/mid-service inspection by a third party?

History: One of the reasons buyers seek out fleet cars is they generally come to market with a good history – one owner in the log book and a fully stamped service book. All this counts for nothing, of course, if the documents are not present with the vehicle at the time of sale. What can you do? Use your administrative controls to ensure vehicles are properly maintained. BCA’s research indicated that – on average – up to 10 percent of documents are likely to be missing compared to the known live fleet and a similar percentage of documents would be mismatched. Up to 50 percent of documents are likely to contain minor errors.

Age: According to some commentators, changes in the registration plate have blurred the age issue because fewer motorists seem to understand the system. That aside, age should be commensurate with mileage, so three years/60,000 looks right, but one year and 40,000 miles looks wrong. What can you do? Compliance to your fleet policy must be adhered to and this will ensure vehicles come out of service in good time.

Mileage: Motorists still think mileage matters. In fact it is usage that matters more. Generally the lower the mileage for the year the better in remarketing terms. What can you do? For leased vehicles, ensure drivers face a penalty if they are returned over the mileage in the contract. Also be aware that bigger cars carry high mileage much better – a three-year old supermini looks high-mileage at 60,000, whereas it feels just right for a upper-medium sector car at the same age.

Preparation: Dirty, unprepared cars are a missed profit opportunity for sellers. What can you do? Make your used vehicles look like new. If there is damage to body and paint, then cold metal dent removal and localised paint repairs may be the cheapest and quickest option.

Tony Gannon, communications director at BCA

I FLA consumer finance statistics

monthly changes

 

Fleet vehicles: residual values

 

1 year old (20,000m)

2 year old (40,000m)

3 year old (60,000m)

Aug 09 (£)

Sep 09 (£)

Aug 09 (£)

Sep 09 (£)

Aug 09 (£)

Sep 09 (£)

Ford: New Focus 1.6 Zetec 5dr

8,000

8,750

5,200

7,000

4,000

4,750

Mondeo 1.6 Zetec/1.8 LX 5dr A/C

9,400

10,000

4,800

7,500

3,750

3,750

Galaxy 2.0 Zetec

12,000

12,750

9,600

10,000

7,300

7,600

Land Rover: Disc Diesel 2.7 V6 SE Auto

23,500

26,500

20,000

21,750

16,500

18,000

Vauxhall: Corsa 1.2I Design 16V/Corsa 1.2i Design

6,300

7,000

4,600

5,400

3,600

4,250

Astra 1.6 Club 5dr

6,600

7,400

4,800

6,000

3,750

4,400

Vectra 1.8 Design

6,800

7,800

5,250

6,000

4,000

4,500

Citreön: C5 2.0 HDI Estate VTR

7,000

7,600

5,750

6,000

4,400

4,750

Peugeot: 307 1.6 S A/C 5dr

5,800

6,600

4,700

5,300

3,600

4,000

407 1.8S Multimedia/407 S 1.8

6,000

6,800

5,000

5,400

3,600

3,800

BMW: New 325 SE Auto

16,800

18,000

12,500

14,000

10,600

11,500

Mercedes: C200K Elegance Auto/C200K Elegance SE Auto

16,700

17,500

10,400

14,000

8,750

9,750

Audi: A4 2.0 SE

11,600

13,400

9,600

10,500

7,600

8,000

Source: BCA

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