Salvage firm Bluecycle claims fleets can achieve good returns on damaged vehicles without resorting to spending money of refurbishment.

The company, which recently launched into the fleet market through a deal with Motability (Fleet News May 7), says that vehicles which have damage costing £500-£1,500 to refurbish stand a good chance of making a better return through its electronic auctions.

Since launch it has been achieving average CAP returns of 70%. For a car with a £10,000 value that equates to £7,000, which Bluecycle claims is better than the return via auction, once the cost of refurbishment is taken into account.

In recent weeks, it has been achieving values of 115% of the damage-adjusted price.

For a car with a £5,000 CAP value that requires £1,000 of refurbishment, the adjusted price is £4,000.

At a 115% CAP return, the car would sell for £4,600.

It might mean that fleets whose leasing companies begin to sell cars this way might see their re-charges waived or reduced.

The company is also developing a model to allow it to auction fleet cars before they come to the end of the contract.

“We’re not saying we will replace the tradition auctions – it’s all about which channels cars should go through for the best return,” said Piers Wilson, Bluecycle head of market development.

“We can refurbish cars in a client wants it, but we believe our auction returns are good enough for cars to be put through as they are.”

The trend for fleets to hold onto cars for longer will benefit Bluecycle’s proposition as the number of cars requiring refurbishment will rise.

Bidders are typically sole traders, independent dealers and bodyshops – around 10,000 regularly use the online auction.