WHEN it comes to remarketing, fleet managers rarely think beyond auctions.

The most popular disposal method for fleets, auction is a convenient and cost-effective way to target a large buying audience. But there are other ways of offloading vehicles that can prove equally or even more cost-effective depending on a company’s individual circumstances, which could be determined, for instance, by fleet size.

Alternatives include affinity schemes, where end-of-contract vehicles are sold to employees, dealer buy-backs and the use of specialised remarketing companies.

Martin Ward, national research manager at CAP, explained: ‘Whichever method fleets choose they need to have a definite system and processes in place. Affinity schemes are cheaper to run than auctions but fleets can achieve more money at auction. That’s why managers need to leave little room for negotiation. If a company has an agreement with a dealer group for buy-back, the vehicle’s pricing structure needs to be sound.’

Affinity schemes

AFFINITY schemes, the second most popular method of remarketing after auction, enable firms to offer vehicles that have reached the end of their cycle to employees or their friends or families. However, experts believe they could be used more often.

Adrian Rushmore, managing editor at Glass’s, said: ‘Affinity schemes are relatively under-developed at the moment. But the fleet needs to be a significant size to make them work as staff need to be notified and it needs marketing to create interest.’

Advantages, according to remarketing company JTK automotive, are time saved on collections and inspections, fewer damage recharges, no holding costs and no depreciation.

Martin Ward of CAP said: ‘This is a good way to dispose of vehicles as there is always someone who wants to buy their company car but managers need to have a robust pricing scheme in place, perhaps based on a percentage of CAP, and not negotiate on price. If fleets need help, there are companies which manage affinity schemes.’

  • VERDICT: Damage recharges and collection needs are minimised but fleets will often achieve lower re-sale values than auction and will need to manage the scheme properly.

    Remarketing companies

    USING a remarketing company can cut the workload for fleets and enable a wider audience to be reached. Remarketing groups use various methods to achieve a sale, including affinity sales. Companies such as Vehicle Remarketing Solutions (VRS) will dispose of vehicles for both outright purchase and leased fleets.

    Mike Pilkington, managing director at VRS, said: ‘Stock is directed through franchises, then our database of 6,000 dealers and car supermarkets.’

    Rushmore added: ‘Stock may be offered to a client base of dealers via the internet or through telephone remarketing.’

    JTK automotive offers similar remarketing packages for fleets. Jim Kerr, the group’s managing director, says its affinity scheme and inventory management programme are the two most popular services for fleets.

    He said: ‘Inventory management is available even if they are not using us for remarketing and is an opportunity to manage and track the defleet process.’

  • VERDICT: Remarketing companies will reach a wide audience and do most of the work on behalf of the fleet. A fee will be charged so compare costs.

    Dealer buybacks

    DEALERS always need good-condition, low-mileage used vehicles and another option is to organise a buy-back scheme with a dealership at a price agreed after a specified mileage or time frame.

    Rushmore said: ‘Fleets can deal with local traders in conjunction with auctions. This is a popular method and fleets could consider this as an alternative. Small fleets in particular may use this as a basis for disposing of used cars.’

    Contract hire and leasing companies often agree terms with dealers to dispose of end of contract vehicles but it is more popular for fleets with a high turnover of vehicles. Pilkington said: ‘Using dealerships is more common for fleets disposing of vehicles six to 12 months old. Those with a longer cycle will usually deal with a leasing company or auction.’

  • VERDICT: Fleets need a good relationship with the dealer to negotiate a decent re-sale price. It could be a good alternative for small to medium-sized fleets.

    Ebay

    EBAY is renowned for selling almost anything and cars are no exception. It is becoming a growing force in the disposals market.

    Using the system, sellers pay a fee to list a car and then another fee for commission on sale. Visitors to the site then place bids on the vehicle offered. It is already a multi-million pound business in the US with punters buying and selling everything vehicle-related.

    A quick search on Ebay shows there are 16,598 vehicles currently listed for sale and it is becoming more popular for fleets.

    Bank of Scotland Vehicle Management (BoSVM) announced it uses Ebay as one of its disposal methods last year.

  • VERDICT: Not a suitable method for large scale corporate fleets but could be a possibility for small scale operations with just a couple of vehicles to remarket.