Fleet News

Needless cost of collection delays

COSTS to contract hire and leasing firms could be rising by hundreds of thousands of pounds because of failures to collect end-of-contract vehicles on time.

Consequent delay in getting cars to auction is losing some firms money unnecessarily.

‘We know of instances where fleet operators have had end-of-contract vehicles sitting on the user’s premises for up to a month awaiting collection,’ said Kevin Clarke, operations director for Fleet Auction Group (FLAG).

‘One small firm had two Audi S4s that remained uncollected for six weeks and, as the tax had run out and an MoT was then due, they had to be collected by transporter from two separate locations.’

Mr Clarke said the vehicles represented around £35,000 of asset at auction, which depreciated by around £700 over the delayed period.

‘Add to that the cost of the transporter to uplift them and a considerable sum is involved,’ he said. ‘And that’s just on two vehicles – imagine the potential loss on larger fleets.’

David Mercer, director of automotive services at Manheim, said: ‘The quicker a vehicle can be picked up from a driver, the better because the process then starts of getting it sold. But speed isn’t always the most important thing.

‘If you’re going to collect the car, hurry it through the auction and sell it then great, but a lot of contract hire companies would be prepared to wait an extra 24 hours and get the vehicle inspected.

‘Different leasing companies have different strategies. Some collect vehicles and take them straight to auction and the auction house refurbishes them. Some have a central end-of-contract centre that they go to before auction.

‘Speed is important but so is consideration of the condition of the vehicle and which remarketing channel to put it through.’

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