Fleet News

Sat-nav leads the way as the essential option

'RESEARCH in the prestige market has revealed that satellite navigation is growing in importance. The experience of dealers now is that this feature has become almost essential on some models, such as the Mercedes-Benz S-class or BMW X5.

Sat-nav is an interesting phenomenon because it does represent one of the most prestigious 'toys' available in today's market. It is certainly still one of the most expensive and the common sense assumption is that this expense must translate into a residual value in the used market.

But try telling the trade this. Always fond of confusing simple issues, generally in an attempt to pay less for more, the trade argues that the customer will not actually pay extra for it and therefore the trade won't either.

But in truth its value is revealed by more than the simple fact that, when stood side-by-side, the car with satellite navigation will sell before the one without. For example, Black Book research shows that a Honda Accord 2.3 Type V hatchback, on a 51 plate and with 40,000 miles, is worth £9,050 trade without sat-nav – rising to £9,400 with the feature added.

A similar picture emerges with Lexus. For example, with an RX300 SE with the same plate and mileage, valued in today's market at £18,950 with sat-nav and £18,400 without. And, of course, it is arguably true that when all other factors in the standard and features of the car are equal, there is no contest.

There are many types of sat-nav and new prices vary dramatically. But, according to our research, the used car buyer tends not to discern a great deal of difference between them.

This offers an opportunity to fleets for maximising the returns on their prestige cars.

According to CAP New Vehicle Data there are still only 382 derivatives with sat-nav as standard, which means it remains an option on the majority of models.

This option should now be seriously considered for the future purchase of higher-end cars for the simple reason that on disposal it will assist enormously in a swift sale. In the end it is a misnomer to say that it does not have a monetary value in the used market.

Anything that makes one vehicle more desirable than the next clearly does have a financial value. But as we have seen in recent years with leather seats, the bottom line is the preference for the haves over the have-nots. Attaching a cash value to a feature which makes the difference between a sale or not can be seen in one way as confusing a few hundred pounds with many thousands.

This retail customer insistence on sat-nav has not yet filtered deeply into the mainstream market but in common with many other features – once reserved for the prestige car – its impact is likely to be felt in the same way over time.

Therefore this is the time to seriously consider investing in the extra up-front costs of this feature, not only to please the user but ensure a smooth path to selling the car at the end of its term.'

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