The success of new car sales over the last few years will see more used cars arriving on the market in 2017, but manufacturers and leasing companies failing to undertake basic vehicle repairs risk maximising returns in the resale market, according to Gain Solutions.
Gain Solutions run used car programmes for a number of manufacturers, as well as offer inspections and inspect and collect solutions for contract hire firms. They believe that vendors could be knocking up to 10% off the value of their stock at auction.
According to Marcus Blakemore, this may be due more to a lack of proper inspections and a misunderstanding in the remarketing process rather than ignorance.
Marcus Blakemore, commercial director at Gain Solutions, said: “From conversations with vendors, there appears to be a misconception that they need to minimise days to sale but sometimes this is not always the best option.
“On further investigation, it’s usually a case that the vehicle inspection process is flawed, with damage being overlooked or misinterpreting the NAMA grading. With a little forethought, vehicles can be independently assessed, booked in for repair and sent to auction without too much disruption. And the bonus is that pre-sale prepared cars will attract more buyers and higher bidding; this is even more important for high value prestige and executive cars."
While delaying disposal by a few days or a week could be seen as a major expense for leasing companies or manufacturers defleeting their stock, Marcus believes undertaking repairs make financial sense.
Blakemore added: “A clean car is a more valuable car. So, while it’s important to convert assets back to cash it could be at the risk of a reduced sale price. Carrying out repairs prior to auction could add 5% to 10% on stock prices. And, with an increase in the number of cars coming into the used car market expected in the next 12 to 18 months, it is vital vendors get to grips with the remarketing process to avoid the pressures of falling values.”