Fleet News

Traders forced to cherry-pick as buyers get more choosy

##CAPsml--left####Martin Ward--right##AS TRADERS start to dig their heels in over the values of cars, they are increasingly fixated with the maximum amount they will pay for any given vehicle.

This means that the gap between asking prices and what the trade are calling 'handy money' gets wider. This is, in reality, revaluing all the cars at new money as the buyer's wallet is taking command of the situation.

The expectations of the trade are also getting higher in terms of what the condition of a vehicle should be. If it needs work, forget it. They are in cherry-picking mode and only the best will do, not only in colour, but also in specification.

The number of cars being offered for sale, both at auction and in the trade, is increasing substantially. Most vendors are now taking the bitter pill, off-loading stock and taking the money in an effort to move on their cars in an overcrowded marketplace.

Some auctions are getting booked up well in advance of sales and are limiting the number of vehicles to be entered by some companies. Traders are being offered second best, behind the leasing industry, in terms of position and timing. The general feeling within the industry is that the job is not going to improve for some considerable time and exactly when it will turn the corner is anyone's guess.

The real art for any leasing company, or indeed any company with the responsibility for running a fleet of vehicles, either for themselves or on behalf of others, is to be able to see into the future. They at least need to have an idea of what is fashionable now and what is likely to be in fashion or favour some years down the line.

As previously stated in this column, getting a good mix on the fleet is one thing, but another is being able to predict what the used car buyer will demand in years to come. If a fleet manager gets this wrong then you can say goodbye to many millions of Euros!

Looking back over the last few years, not many people can have accurately predicted how the people carrier market has gone from strength to strength, both in the new market and in the used. When the Renault Scenic first appeared it left many baffled as to where it stood in the market and who would possibly buy it when it was three years old.

In the opinion of most traders, these vehicles were dead and buried before they began, but how wrong they were. Other manufacturers gradually moved into the 'mini people carrier' part of the market and most are doing well, including Vauxhall's Zafira, the Citroen Picasso and others from Japan and the Pacific Rim.

They are making their mark and in many cases they could be helping to keep their companies afloat - if they hadn't gone into this sector, and had just relied on the run-of-the-mill car, some might not be in existence today.

Other small people carriers, for those that are less image conscious, are the Renault Kangoo and Citroen Berlingo. Both are very capable vehicles that do a job extremely well, but getting a company car driver into them is not so easy. In the rest of Europe this type of vehicle is an integral part of society and commonplace with many families and businesses. Different people buy cars for different uses, a two-seater sports car for fun, a 4x4 for practicality, an estate for space and generally a car needs to carry people.

As we have seen a shift in the types of cars used by companies over the past decade, then the future could look bright for some of these less glamorous vehicles.

Again, having a variety of vehicles on the fleet could result in better financials for the company. Customers do now want cars that actually carry five people, and their luggage, in relative comfort. This trend is likely to continue and cars that are a squeeze for the smallest of families could be a thing of the past.

  • FNN allows you to search for REAL prices reached by REAL vehicles sold at the country's leading car auctions. To start your search click here.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee