Fleet industry facing 'perfect storm' in used car market

Fleet managers and leasing companies are facing a “perfect storm” in the marketplace and may need to change the way they remarket cars to maximise residual values, according to Martin Potter, remarketing director at Aston Barclay.

“We've got a perfect storm here where we've got an increase in the total used car volume, we've got an increase in PCP product that will generate a lot more 'late and low' mileage cars and we've got an increase in that fleet profile, putting pressure on the cars you are trying to remarket,” Potter said in the remarketing best practice session at Fleet Management Live.

He predicted that by 2018 there could be 31% more three year old cars in the marketplace than there were in 2015 and 28.3% more four year old cars. By 2019, the number of four year old cars could rise to 36.4%.

One way to counter the rise could be ‘upstreaming’, whereby the car is sold before it reaches the end of its lease, potentially to the driver or a family member, the open market or a particular dealership group.

“The day it is defleeted it is already pre-sold so we already know the condition it is going to come back in, and that will help you to get your cash flow sorted out and also alleviates that massive amount of stock coming into one channel later on,” Potter said.

Currently,  “less than a couple per cent” of the total cars Aston Barclay remarkets are sold ‘upstream’ but it is becoming more and more desirable, according to Potter.