Fleet News

Online auctions increasingly attractive to fleets

Major fleets are planning to switch more de-fleet business to online trade auctions over the next five years, according to a survey by CD Auction Group.

The survey suggests a significant increase in online sales activity as vendors look for higher sales values, increased overall value for money and faster stock turn.

They say they are likely to use conventional auctions and remarketing agents less.

Roger Woodward, managing director of CD Auction Group said: “While I’m not surprised at the results, it is significant that this survey confirms the trend to faster, more efficient asset disposal channels.

“Time is money and, in this more difficult financial climate, vendors are acutely aware of the need to get a rapid return on their investment."

The survey asked a random sample of vehicle and plant operators about their current and future remarketing strategy.

Respondents were responsible for more than 200,000 vehicles in total with average fleet sizes of 9,357 cars, 2,295 light commercial vehicles and 200 heavy commercial vehicles.

Together they sell more than 80,000 vehicles a year.

The survey confirms there is already a strong trend towards online sales. In the past five years, 83.3% of respondents have used online trade auctions more and they have also sold more vehicles direct to retail (62.5% of respondents).

During that time 42.9% have used conventional auctions less and 37.5% have shied away from selling directly to trade.

Looking ahead to the next five years, 80.0% said they are going to use online trade auctions more while complementary channels such as affinity scheme sales and direct to retail are also set to increase.

Once again, conventional auctions are likely to be used less.

 

The survey asked those vendors who are already using online trade auctions as part of their sales mix why they chose this channel. The major reason given (45% of respondents) was ‘no hassle process’, emphasising the importance of having robust, tried and tested systems.

“We’ve seen a number of operators trying to break into this market but it’s no good if the system freezes or falls over the moment more than a couple of people place a bid,” commented Woodward.

“Online trading is all about giving vendors and buyers confidence with systems that are secure yet simple and easy to use.”

Other important factors in choosing online trade auctions were ‘high sales values’ and ‘good stock turn’.

Interestingly, a large number of respondents (35%) valued the online channel because it was a ‘discreet process’, enabling them to get high value for assets in a less competitive environment than conventional sales.

Larger vehicle fleet operators appear more likely to be using online sales currently. The average fleet size for companies using the system was 13,189 units while non-users averaged just 1,053 units.

Current users also rated ‘high sales value’ as more critical to their current strategy than non-users who are more likely to be worried about getting a ‘value for money’ solution.

In all cases, vendors see ‘percentage of book value achieved’ as the most important key performance indicator that they measure.

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