LeasePlan builds on What’s Next strategy by selling ex-lease cars direct

LeasePlan intends to launch its used car proposition, CarNext.com, in the UK in the third quarter of this year as it looks to maximise value from its ex-lease cars and grow its business.

The leasing giant revealed plans to sell ex-lease cars direct to consumers as part of its ‘What’s Next’ brand campaign last year.

It took the first step when it began selling used cars on its UK website late last year as a pilot. This will be replaced by a separate website under the CarNext.com banner. 

Ewout van Jarwaarde, managing director of CarNext.com, would not divulge how many cars have been sold this way in the UK to date but said that “over time this will grow to be a very substantial number”. 

CarNext.com already exists in Belgium, Greece and the Netherlands, and a rebranding exercise will see LeasePlan’s used cars available to consumers in a further eight European countries by summer.

The business model sees the website supported by a network of delivery stores where customers are able to go for a test drive and get advice before making a final decision. 

By the midway point of the year there will be 19 delivery stores across Europe, with plans to grow this number to 50. The first UK delivery store is expected to open this year. 

“We’re looking at various places,” van Jarwaarde said. “The strategy of CarNext.com in general is that we focus on the largest cities. So we’ll follow that same strategy in the UK.” 

LeasePlan is also catering for the B2B market through its CarNext Marketplace auction platform, which includes cars from the UK, and allows customers of traditional auction houses to bid on it. 

“Last year on this platform across the entirety of Europe we had more than 6.5 million bids. So, you could say that in continental Europe it’s very mature, while in the UK we’re just starting to build,” van Jarwaarde said.

In total, LeasePlan sells 250,000 used cars across Europe each year and in the first quarter more than 10,500 of them were bought through its CarNext.com proposition.

“On our run rate basis, we sell 17% of our cars through these channels, on average, for Europe and we expect that figure to go up significantly,” van Jarwaarde said.

He said it was “too early to say” whether selling ex-lease cars in this way would allow LeasePlan to reduce monthly contract hire rates on new cars but acknowledged that it would allow residual values to be set “the best possible way”. 

He believes used cars could prove attractive to small-to-medium enterprises (SMEs) as well as consumers.

“In the Netherlands we have a fully-fledged used car leasing proposition, it’s highly sought after by SMEs as well as private individuals because used car leasing offers more flexibility, lower costs and ultimately allows the SME or the consumer to almost trade up a car,” he said. 

CarNext.com offers customers a 14-day return policy meaning that if they are not able to test drive the car prior to purchase they can easily return it. 

This, combined with having the full maintenance history of the car and a fixed price, creates “total trust” and will, van Jarwaarde believes, make CarNext.com a success for LeasePlan despite other leasing companies stepping away from selling used cars.