6 Documentation

Full documentation is important.

A car should have a V5, service history and, if it’s an older vehicle, an MOT.

ALD will not sell a vehicle unless it has a V5 and, if applicable, a current MOT certificate.

If the V5 is missing, the impact on resale can be up to £1,000 on a luxury car, according to FLAG. A missing V5 also reduces the number of people who are interested.

“A Jaguar dealer won’t buy an XF without a V5 because they know they can’t sell it,” Pearce says.

Spare keys are also important. Pearce suggests a missing spare key can mean a £200 bid reduction due to the cost of replacing it.

“No service history, in certain circumstances, could render a car virtually unsaleable,” he adds.

ALD points out that it also makes it difficult to prove the accuracy of the car’s mileage.

Buyers are also interested in detail. Mailey says: “Buyers don’t just want to know that there’s a service history – they want the details of what the car has had done and when.”

Where the vehicle is serviced is also a consideration with BCA suggesting a main dealer history is likely to enhance a car’s value as opposed to an independently-serviced car.

Manheim says that although manufacturer service history is preferred on executive cars it is not essential.

7 Age and mileage

Fleet cars are regularly sold anywhere between two years and five years old and 40,000 and 100,000 miles, according to BCA. Cars beyond 100,000 miles do sell, however.

“Auctions are now regularly seeing cars that have covered 140,000-plus miles,” Pearce says.

“Previously the 100,000 barrier did restrict sales but this is now less evident. It is becoming more accepted because of contract extensions.”

Mailey agrees: “There is a psychological barrier at 100,000 miles, but the market has adapted.”

Wiseman adds: “You can sell cars that have done more than 100,000 miles but they need to be priced cheaply.”

The importance of age and mileage can vary depending on the vehicle. Henstock says city cars, superminis, convertibles, performance cars and luxury models generally sell better with lower mileages.

And diesel cars with higher mileage are more acceptable than petrol models.

Age and mileage is less of a factor on vans.

“Vans get to a plateau price quicker than cars,” Pearce says. “There’s more of a market for older vans than older cars.”

8 Best time to sell

“Key times for resale are historically January through to March with a resurgence over the period from August until October,” Pearce says.

However, this broad trend can be impacted by the volume of cars available.

There are also certain models which follow a different trend. Convertibles generally reach their best values in the spring and 4x4 sales improve during the winter.

But Pearce points out that if everybody followed the same course of action, prices would be impacted more quickly.

BCA’s advice is to focus on the selling strategy, such as pre-sale preparation and valuing in line with market conditions, rather than timing.

9 Average time at auction

How long it takes to sell a vehicle depends on the market conditions, the reserve the vendor sets and the vehicle’s condition.

Auction companies currently quote average time for fleet sales as anything from 12 to 20 days.

Manheim’s average in March, for instance, was 16 days (taking into account time for transportation and inspection).

Pearce says that in a buoyant market the average time at auction is approximately eight days.

Getting information on the internet as early as possible and raising awareness is key to speeding the process up.

Fleets and leasing companies also need to understand what is happening in the market at the time and set realistic reserves rather than sticking too closely to the residual guide values.

Both Aston Barclay and Manheim advise taking the first bid seriously.

“Lots of people get hung up on the guide values but the first bid may well be the right bid,” Mailey says.

10 Resale ‘hotspots’ 

Geographical hotspots are now on the wane thanks largely to the internet.

Even if a hotspot does arise it’s not worth pursuing, according to Manheim.

“If there was demand for convertibles in the south and leasing companies moved all their convertibles there the market would quickly be saturated,” Wiseman says.

“It’s more important that the vehicle is in the ‘right’ sale than where the sale is.

For instance, if you put a Ferrari in a sale with dealer stock worth
£2,000 it wouldn’t attract the same value as it would if it was part of a prestige sale.”

Fleet managers have to trust their contract hire provider to set the right RV but what happens if a vehicle achieves a better value than expected?

It may be worth asking if a profit-sharing arrangement is possible and how such an arrangement might work.

What percentage share can the fleet expect?

Will it be profit on an individual vehicle or on an annual rolling basis (with a payment based on the bottom line figure at year-end)?

Percentage share also needs to be discussed.

“If the contract hire company gets the RV right then they won’t have to pay anything. It’s just extra protection as far as the customer is concerned,” Nigel Trotman, head of strategic consultancy at Alphabet, says.

“But you also have to think about what will happen if the contract hire company makes a loss – will the customer share the pain or not?

“In a true partnership it should be shared.”