Fleet News

10-point plan to protect residuals

FOLLOWING a 10-point checklist could guarantee healthy residual values at disposal time for fleet decision-makers currently taking vehicles on to their fleets, leading used car experts claim.

The list recommends that fleets work hard to focus on picking 'brand builders' for their choice lists and not just 'street fighters' – the models traditionally used by manufacturers to achieve volume. Picking ranges with sustainable and predictable resale levels is also a key issue, while fleets need to avoid models that are the subject of manufacturer special offers, as this can drive down the used value of cars.

Furthermore, metallic paint and air conditioning should now be considered pre-requisites, while alloy wheels, if treated well during their life, should also prove beneficial. Even acoustic parking aids could lead to improved residual values, because it is a relatively rare option in the used car market.

Other tips offered in the checklist, created by Glass's Information Services, include a warning that niche cars may require more marketing to attract the attention of specialist dealers who will be prepared to buy vehicles.

A spokesman for Glass's Guide said: 'Any car offered to the trade must be complete in terms of parcel shelves, mats, luggage nets and so on.

'Anyone who has the onerous task of assessing residual value risk knows that they are confronted with a different set of challenges when assessing the used car market.' The guide focuses on the rental sector, but the advice can easily be transferred to the entire company car market.

10 tips for healthy RVs

  • Take cars from makers regarded as brand builders
  • Look at model ranges that have passed their honeymoon period in the used car market where values appear to have settled
  • Avoid models that are likely to be the target of a consumer offer
  • Avoid models that will be undermined by limited editions
  • Air conditioning and metallic paint are pre-requisites and repay their initial costs.
  • Alloy wheels may prove to be equally beneficial
  • Any car offered to the trade must be complete in terms of parcel shelves, mats, luggage nets, etc
  • At sale time, avoid May, June, July and October when seasonal demand is at a low ebb
  • In the rental market, the September plated car traded in the following March is likely to attract a slightly greater premium than the same car registered in March and traded in September
  • Niche cars require more remarketing effort
  • Be aware of price sensitivity at key mileage thresholds
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