Fleet News

Disposal strategies need more attention

FLEETS could be losing out on hundreds of pounds for each car they defleet because they have failed to implement a proper disposal policy, experts have found.

A survey of finance directors’ attitudes at board level towards used vehicle planning and disposal, particularly among companies that manage their own fleets, found that it was not being given the attention it deserved.

The result could be that fleets are losing out on a substantial amount of money because cars are taking longer to dispose of or are not being put through the most profitable channels.

Fears were also raised that companies could be putting their reputations and drivers at risk by selling on cars that have not undergone proper safety checks.

The findings are produced in Rethinking Used Business Car Disposal Strategy, produced by Professor Peter Cooke of Nottingham Business School and published by BCA Vehicle Remarketing.

At the report’s unveiling, Cooke said he feared many fleets were losing out on hundreds of pounds per car.

He said: ‘I’ve said it before but fleet managers are their own worst enemies and they are not bringing important fleet issues, such as disposal, to the attention of their boardroom. Huge costs are involved and the process needs to be managed properly.’

Cooke added: ‘A used vehicle disposal strategy should achieve the best possible residual value for an organisation’s used vehicles.

‘This should take account of the whole envelope of associated costs – including acquiring the appropriate new vehicle, most cost-effective means of used vehicle disposal at the lowest practical transaction cost – working within an acceptable risk management framework.’

Jon Olsen, BCA Vehicle Remarketing chief executive officer, said: ‘For those who have the duty of selling their company’s used vehicles, it is often as an adjunct to their responsibilities and more often within an environment far removed from the motor industry.

‘The result is that it can be a confusing and conflicting task. There’s no shortage of information, but sifting through it and deciding the right route for the organisation can be a baffling and unrewarding task.’

Olsen likened getting disposal right to ‘awarding the company a big pay rise.’

  • Fleets can obtain a copy of the report by emailing tnaylor@bca-group.com.
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