Fleet News

Used prices – rental firms getting smart

'THE main question faced by customers buying new cars is no different, whether they are privately buying family transport or thousands for a fleet. It is about the best deal over time.

And anyone reading Fleet News will know that the more expensive a car is on the price list, it does not follow that it will cost the most during the period of ownership.

Nor should it come as news to anyone that resale value is the dominant factor in ownership costs and therefore cars still need to perform in the used market afterwards at some point.

The good news is that ex-rental vehicles are now of the highest quality, with the best spec and – just as importantly – in the best colours. It is only until quite recently that the picture was very different.

Rental companies enjoyed cheap bulk purchase deals but tended to end up with poor colours and low spec levels. Problems at factories, such as supply shortages, tended to manifest themselves on cars which were then directed into the rental market.

It was not unknown to find no heated rear window and odd mis-matches, like electric windows on one side and a manual winder on the other. No surprises then that often what was gained in the upfront deal could be seriously whittled away when the resale value was realised.

This had a further negative impact, on occasion, distorting perceptions of the market as a whole. Complaints that poor cars appearing en masse were dragging other values down in a kind of 'domino effect' were common – although the truth in today's market is that this creates more interest in the best cars. But the negative perceptions were there.

But lessons were learned and the manufacturers now supply desirable cars to these customers – vehicles that are wanted by used car buyers long after their rental duties have been completed. Far more careful thought now goes into equipment levels and cars are now ordered with features that are certain to appeal to the second user.

These include options which would once have been considered frivolous on a rental car, such as leather trim and today's new and desirable items like sat-nav and parking sensors. Remember the days when white spelled rental? Our research reveals that more than 95% of cars now have metallic paint and the majority, regardless of size, have air conditioning and electric windows.

My own research for this column reveals rental operator policies which include all air conditioning or full climate control, all alloys on one marque, universal metallic finishes, CD player, front electric windows as minimum and a minimum of two front airbags.

There are no prizes for guessing the benefits operators with such spec policies enjoy on disposal.

This change across the rental sector is an example of two sides of the same industry working together and succeeding in solving a long-standing problem. The benefits are also felt elsewhere in terms of general stability.

There is no need to 'distress sell' desirable used cars and therefore the negative whisperers who enjoy talking the market down have lost a big weapon from their armoury.'

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