Fleet News

Remarketing: Make the right choice when selling vehicles

Key quote: ‘Whatever route you choose – physical auction, electronic or online auction, tender, fixed price sale, or direct to traders – you have to weigh up and balance the benefits of speed, cost and return. There are other elements that come into play such as security of payment, your company profile and objectives, or the type of vehicles being remarketed. The chosen channel must meet the three main criteria of speed, cost and return.’

NEVER have there been so many ways of getting rid of a vehicle that has reached the end of its fleet life.

But what is right for you?

‘It is important to establish which market you want to reach – wholesale or retail,’ says Tony Gannon, communications director at auction house BCA.

‘Generally, the wholesale market is most appropriate for corporate sellers, because of the speed and range of services and the ability to handle large volumes of vehicles.’

Wholesale offers physical and electronic sales channels, and various sale methods such as auction, fixed price and tender.

Sellers can employ a range of tactics. They can brand their vehicles through the sales channel or, sell anonymously. They can target defined buyers in a ‘closed’ or ‘invitation’ sale, or put their product with other similar vehicles in category sales such as ‘diesel’, ‘convertible’ or ‘prestige’.

Physical auction
DESPITE the rise of online ‘virtual remarketing’, a physical auction is still the most common way of selling fleet cars.

Rob Barr, planning and communications director for auction giant Manheim, says, ‘Around 80% of vehicles are still bought by buyers in the Manheim auction halls. The physical and online sales channels are complementing one another.’

Online auction
MOST of the major auction houses have online auctions, and there are a growing number of dedicated online sales sites.

Some are simply sites where users view details and place bids, others use streaming video that allows users logging in to see what’s happening in a physical auction and bid in real-time.

According to Roger Woodward, managing director of Cars Direct: ‘The use of online auctions as a means of selling vehicles is on an upward trend and there is an increased level of security for online transactions.

‘Traditional auctions are at a specified time and location, and can be some distance away. Bidding for vehicles online has the benefit of being entirely at the convenience of purchasers.’

But there are drawbacks.

Woodward says: ‘With the financial commitment that purchasing a car brings, and the fact that it is often buying from a photo online, there is an element of caution when choosing the vendor, as some sites are known to be more reputable and secure than others.

‘A listing of what seems to be a relatively cheap vehicle might not necessarily turn out to be such a bargain.’

Rob Barr says the absence of physical contact with the cars needn’t be a huge disadvantage.

‘Selling vehicles ‘sight unseen’ is not new – the motor trade has been doing this for decades,’ he said.

‘With online channels it’s about replicating that same degree of trust that exists between vendor and buyer and applying efficiency to the process using the technology.

‘Buyers need sufficient information, including high quality images and condition reports.

‘And if the process is transparent, underpinned by a supplier they can trust, the system does the rest.’

Online to the public
RATHER than targeting trade buyers, several companies sell cars from ‘fleet to street’ using the internet.

Carsite is a firm which collects, inspects, lists and sells vehicles on behalf of its customers, and puts them on eBay. Business development manager Mark Thomas said the advantage of selling direct to the public was that often the price on sale was higher than when selling to dealers.

This still-young remarketing area also has its drawbacks.

‘It’s still an immature market, but it’s maturing fast,’ Thomas says.

‘There are concerns about buyers on eBay but we take away a lot of the hassle and scams that go on.

‘Physical auctions do provide faster sales, but there’s no guarantee of the price you’ll get. We can offer a higher price.’

Fleets needed to decide if the extra money would be worth potentially longer times to sale.

Earlier this year eBay also launched its own bulk listing classified advert package – eBay Motors Pro – which will allow users to pay £150 a month and display adverts for up to 100 vehicles at a time to the public.

Multiple methods
MANY fleets these days use several different channels to remarket vehicles, giving them options when it comes to price and choice of which deal is appropriate to the circumstance.

This can cause problems when trying to collate prices to work out what is where, and which channel is returning the best prices. The tedium and time spent entering data from the various channels’ different systems into spreadsheets can be a drain on resources.

Such problems led IT firm epyx to come up with a solution that brings all the information together in one reporting package. The 1link Disposal Network covers online channels and the likes of eBay and will soon cover physical auctions from the major auction houses.

What’s best for your fleet
THERE is no one-solution-fits-all way to dispose of cars.

Tony Gannon says: ‘Whatever route you choose – physical auction, electronic or online auction, tender, fixed price sale, or direct to traders – you have to weigh up and balance the benefits of speed, cost and return.

‘There are other elements that come into play such as security of payment, your company profile and objectives, or the type of vehicles being remarketed. The chosen channel must meet the three main criteria of speed, cost and return.’

Speed is an issue because cars are depreciating assets and there will be a holding cost associated with every vehicle on your fleet. Faster sales generally mean a reduction in holding cost.

Tony Gannon says: ‘Remarketing is not about saying one route to market is better than another, but is about matching the needs and aspirations of the customer to the channels that are available.’

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