Maximise fleet vehicle values with this guide to remarketing

Achieving the maximum resale value for a vehicle when it leaves a fleet is a must for those organisations which outright purchase or finance lease them.

These gains can be critical to help an organisation achieve its desired wholelife cost performance, or to maximise returns from their vehicles.

While residual values are influenced massively by supply and demand, actions taken by a fleet decision-maker and their remarketing partner can make hundreds of pounds difference per vehicle.

If you own your company vehicle fleet ensuring you maximise sales value when the vehicle has reached an age and mileage that requires replacement is critical to managing total cost of ownership.

There are lots of options available when it comes to remarketing your fleet vehicles from traditional channels such as auction, employee sales and trade-ins, to online auction portals and manufacturer buybacks.

Each sales channel has pros and cons, so choosing the right method and ensuring the operational process is efficient will ensure that your fleet costs are minimised.

Physical auctions are those where both the buyer and vehicle are at the same site: this is the most traditional way of selling defleeted vehicles to both the trade and public.

They allow potential vendors to see the vehicle before bidding, while the sales also have the capacity for sellers to dispose of a large number of vehicles at the same time.

Online auctions become increasingly widespread in recent years  and allow vendors to sell their vehicles to a larger number of potential purchasers, as they do not have to be in the same place as the sale.

Many auction houses now run physical and online auctions concurrently, allowing online bidders to compete against people present at the site to give the widest audience possible.

Selling vehicles direct to the driver can work well as it can be a quick sale and save on auction fees and transportation: it can be the most profitable and efficient option for fleet operators.

The driver will know they are, in most cases, purchasing a well looked after and fully maintained vehicle. Generally the buyer will pay less through this route than by purchasing from a retailer.

Fleet operators could consider selling vehicles to the general public through car supermarkets or websites like Ebay and Facebook Marketplace, although this could become time and resource consuming.

Outright purchase fleets could also consider selling to local dealers as this can prove more effective than paying to send vehicles to auction.

Independent garages, in particular, can be worth approaching with a vehicle which is in fair condition and has not been worked too hard.

This is because an independent will sell a slightly older, slightly higher-mileage vehicle than a franchised dealer does.

Organisations looking for a no-hassle method of disposal can look to the new generation of car purchasing companies such as Webuyanycar.

These work by a vehicle owner inputting its details and mileage online, before being emailed an offer.

If this is acceptable, the owner arranges a final inspection and drops off the vehicle. The inspection takes into account any missed scratches or damage that was not included in the initial valuation.

A final price negotiation takes place and the sale is agreed with the cash being transferred to the owner’s bank account instantly.

Although the sale value achieved is likely to be lower than other methods, the process is designed to be quick and hassle-free.

While there are many different remarketing routes to choose from, fleets do not have to tie themselves to a single one and arguably the best approach is to use a combination of methods.

A remarketing strategy needs to be flexible, allowing for a quick reaction to market conditions and utilising dynamic channel management to get the right product to the best audience at the most lucrative time.

There are also choices a fleet makes at the time of procuring vehicles which can affect their resale value.

This include colour choice: smaller cars can generally get away with fun and fashionable colour schemes that would be inappropriate on an executive or SUV model.

Generally, volume products should be safe and reserve, not bold or brash. Where possible, specify metallic finishes: they age better.

Companies should also consider the colour mix of their fleet. If they defleet a large number of vehicles at the same time, having too many in the same colour may dilute their desirability and deflate their price.

Whether optional extras improve RVs is debatable. Some leasing companies set a more favourable RV for vehicles with a desirable specification, but others say the options themselves have very low RVs and are best seen as a way of making the car stand out from those which don’t have the same level of specification.

Providing full documentation is important. A vehicle should have a V5, service history and, if it is an older vehicle, an MOT.

If the V5 is missing, the impact on resale can be significant. It also reduces the number of people who are interested.

Spare keys are also important.

No service history, in certain circumstances, could render a car virtually unsaleable.  Where the vehicle is services is also a consideration, with a main dealer history likely to enhance its value.

Before a vehicle is defleeted, a pre-return inspection should be carried out; maybe a month to six weeks before the vehicle is returned to allow time for any repairs if necessary.

Not all damage will need to be sorted, as some will not be necessary or it may cost more than the increase in sale price it will achieve.

A good guide to acceptable damage is the BVRLA’s Fair Wear and Tear guide, which is normally used when a vehicle is returned to a leasing provider if it is leased.

As you can see, remarketing is a complicated issue, which makes it critical that a fleet selects the right remarketing supplier.

It is important they are able to monitor and analyse market trends so they can achieve the best price for a vehicle.

This may mean the vehicle is transported to another part of the country, or, if there is likely to be a huge amount of similar vehicles being sold at the same time, staggering the sale dates so supply does not exceed demand.

The amount of vehicles defleeted will also influence the choice of supplier. A very large fleet or leasing company could be disposing of hundreds of vehicles per month, whereas a smaller fleet could be selling 10 or fewer over the same period.

The more vehicles being defleeted, the greater the appeal of the major auction houses which have the facilities and audiences to deal with high volumes of vehicles.

This is because vehicle collection, assessment, preparation and promotion require significant resources and infrastructure, and major buyers will tend to gravitate towards online or physical sales where a large selection of vehicles gives them the greatest choice for the least time and effort.

However, using smaller, more local, remarketing companies can have many benefits, particularly for those fleets with specialist vehicles or who want to offer their vehicles to the widest possible potential customer base.

It can also give the fleet the flexibility to select sales where their vehicles will stand out, rather than be lost in a high number of similar makes and models, which is likely to impact the sale price.