City Auction Group has launched the Elevate tactical refurbishment programme, which aims to give used cars a residual value boost.
It says that the new service is designed to elevate used vehicles from NAMA grade 3-4 to grade 2, delivering corporate vendors an average profit uplift of between £300-750 per passenger vehicle.
The Elevate Tactical Refurbishment service brings vehicles up to retail standard and speeds up sales via a range of cosmetic repairs, including glass chips and scratches; plastic and interior repair; alloy wheel refurbishment including diamond cut alloys; fabric and leather upholstery repair; and minor dents and panel repair, it says.
A recent trial during Q3 2019 for PSA Finance with NAMA grade 3-4 vehicles with the Elevate product resulted in an average financial return of £595 after a £297 spend, with the conversation rate rising to plus 90% conversion at the first sale event.
City Auction Group has invested in extensive remarketing facilities at its new multi-acre site at Rockingham. The new facilities include fifteen individual workshops, two specialist body shop spray booths and will employ 12 garage technicians during the first phase.
Michael Tomalin, CEO of City Auction Group, said: “Corporate vendors have huge potential to uplift profits at auction, by simply returning vehicles to retail standard for a relatively small investment cost.
“Our research shows that the most common areas of damage are smart repair panel dents, wheels, windscreens and bumper scuffs.
“Around 50% of passenger vehicles that our passing through our auctions at Rockingham and Northern Ireland are between NAMA grade 3-4.
“Corporate vendors are missing out on potentially huge additional profits on their vehicles. We know that the majority of grade 3-4 vehicles are end-of-term lease and finance voluntary terminated vehicles, which are being sold through auctions across the UK, delivering both lower profits to vendors and are taking longer to sell.
“We now have the facilities to defleet and remarket over 100,000 vehicles per year at Rockingham and are already working with several finance and leasing companies with our new Elevate Tactical Refurbishment programme.
“In October, we are commencing an LCV trial for one major rental company and we expect the results to be very similar to passenger cars, as the key ingredient is the elevation of vehicles to retail standard, ensuring the speed to sale is enhanced.”
Richard Kernick, director of collections at PSA Finance, says he is “deeply impressed” with the results from the recent trial and has seen a “significant increase in profits and quicker vehicle disposal”.
He continued: “We are planning to increase the number of vehicles of we remarket through City Auction Group, as we are securing significantly better returns than any other of our auction partners.”