Fleet News

Mileage band reassurance

CAP Motor Research has moved to reassure contract hire and leasing firms and auction houses of the value and accuracy of its new six-mileage prediction system which is being introduced now as a computer valuation software upgrade in response to customer demand. Traditionally CAP has provided used values across three mileage bands, but it says the increasing numbers of cars coming to the market outside of these mileages has led to the need for a more sophisticated adjustment formula.

However, fears over the impact of the millennium bug has led a number of CAP's customers to hold off introducing the latest software and means the new and the old system are being used simultaneously throughout the industry, causing pricing discrepancies. British Car Auctions, for example, said it analysed a typical sale of 120 fleet-entered vehicles and found that in 39 cases variances of £25 in valuations existed between 'old' and 'new' methods. This represented 33% of the total entry in the sale and the total variance under the 'new' system increased the overall valuation by £4,400 or nearly 2% of the sale value.

Tom Madden, BCA's director, customer affairs, said the disparity proved how invaluable auction hall experience could be in optimising residual values. Where CAP values have 'increased' without any shift in the real market, there was the possibility that vehicles would remain unsold despite achieving a true and representative market value, Madden added.

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