Fleet News

Ex-fleet cars perform poorly at auction

Companies defleeting end-of-term vehicles have been warned that they must set realistic reserves based on current valuations before entering them for sale.

Retail demand for used cars remains poor and vehicles entered for sale by fleets are proving a particular problem.

“The ex-fleet market is a concern.

"Fleet managers are overvaluing their stock and subsequently many of these vehicles - often overpriced and out of condition - are failing to shift at the auction hall,” said HPI’s valuation spokesman Martin Keighley.

“An influx of executive models such as BMW’s 3, 5 and 7 Series and Audi’s A4 and A6 is also likely to cause problems.

"With large numbers expected to be defleeted towards the end of the year, the fall in values is expected to hit these models the hardest.”

The volatile and shifting market means providing accurate vehicle valuations is proving difficult.

“Accurate vehicle valuation hasn’t been so difficult for some 15-20 years,” said Mr Keighley.

“However today’s market should be looked at as part of a normal cycle rather than an apocalypse.”

BCA agreed.

The auctioneer’s sales data for July shows that average used values have continued to decline when compared to June’s figures.

According to Manheim figures, this equates to an average of a £413 (-6.3%) fall in used car values compared with June and £587 (-8.7%) down compared with July 2007.

The auction house points out that typical fleet cars are taking the hardest hit, with values of used cars in the medium family sector down by £446, used large family cars down by £484 and used compact executive cars down by £570 compared with June.

“Values fell the most in the fleet and lease sector by over 5%...but budget car values from all sources actually rose for the first time this year - providing further impetus to the notion that motorists are seeking to downsize as economic conditions tighten,” said BCA's communications director Tony Gannon.

“What is critical in the current market for all vendors is to make their cars look attractive to buyers - because there is a lot of competition - and get them sold quickly, because depreciation is steeper and faster this year than we have seen for some time.”
 

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