Fleet News

Remarketing 5 - Reserve Prices

When is a vehicle actually sold and what happens if the bidding does not reach the reserve price?
When your vehicles are entered for sale the resulting bidding should hopefully exceed your reserve prices, but there is no guarantee of this.

The auction company cannot sell your vehicle outright unless the bidding has reached or exceeded the stated reserve.

On the fall of the hammer a binding contract of sale is established between the seller, the buyer and the auction company.

This is subject to both the seller and the buyer conforming to the auction’s terms & conditions of entry and sale.

However, should the bidding not reach the reserve price, but be close enough for the auction to think you should be offered the option of accepting a lower price, the vehicle will be sold ‘provisionally’ and the auction company will refer back to you very shortly thereafter.

Under these circumstances you should consider this provisional bid promptly and let the auction company have your decision as soon as possible.

There is always some room for negotiation on provisional bids and you should endeavour to establish whether the buyer may be prepared to increase the bid. This is quite normal practice and regular buyers expect it.

It is important to note that the auction company is under no obligation to either the seller or the buyer under a provisional bid arrangement and either party is free to withdraw or refuse the bid at any time up to the point an agreement is reached.

When should the seller expect to receive their sales proceeds?

You should normally expect to receive the net proceeds from the sale of any vehicle in auction within three working days following its sale.

Net funds are the hammer price less the auctioneer’s commission and fees for other services which you may have requested, plus VAT on all charges.

If you are an occasional vendor the proceeds may be sent to you by cheque accompanied by a statement of sale.

Alternatively, more frequent users of auction can arrange to have funds transferred electronically post-sale with supporting online statements. This is normal practice for the leading auction companies.

Arrangements can also be made for multiple vehicles to be paid in one transaction, where required.

Source: Managing Your Company Car, Expert Opinion, by Colin Tourick. Contributor: Rob Barr, Manheim.

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