AUCTIONS: Stock shortage drives high values
13 November 2007
Hybrid and LPG vehicles are extremely rare to find at auction, which is why when they do turn up, prices for the best examples can soar
Drawing too many meaningful conclusions as to the real strength of alternative fuel vehicles and hybrids is tricky as the volumes in the market are still relatively minimal. As BCA's UK network operations director, Simon Henstock, says: "Professional buyers just don't see high numbers of electric and hybrid vehicles reaching the used market, which makes it difficult to gauge demand."
BCA's online Auction View stock locator found just 60 LPG, hybrid and electric vehicles - cars and commercials - listed on 1 November. This is fairly typical of the low market penetration and compares to the 10,500-plus vehicles BCA had consigned for sale at that time. However, says Henstock, "there is a rarity value attached to the best examples, which can see values soar, particularly when they are offered in the right part of the country".
According to Manheim, better-known hybrid derivatives such as the Toyota Prius and Honda Civic, plus of course the Lexus range, find homes quickly and perform favourably (at auction) in relation to conventional fuel-powered cars. "But this is largely driven by the limited supply and most are still fairly young with sensible mileages," says Rob Barr, the company's group communications director. "We have seen some of the early models with high mileages struggle a little, as buyers are perhaps cautious of the unknown longevity of the technology and the associated costs of maintenance or parts replacement."
There are two distinct markets - the commercial vehicle market has had a long exposure to alternative fuels and is probably more comfortable with the concept than the car market. There are also clearly defined business benefits for low-emission commercial vehicles working in the congestion-charging zone, for example. However, the benefits are less obvious when dealing with alternative-fuelled and hybrid cars. The next owner is almost certainly going to be a private motorist, so there are no 'business benefits' to assist in the selling process."
Henstock says: "As you are unlikely to buy an alternative fuelled car on a whim, the next owner is probably in-tune with the environmental aspects of these cars and is looking to reduce their carbon-footprint as part of an ongoing lifestyle statement."
“As you are unlikely to buy an alternative-fuelled car on a whim, the next owner is probably in-tune with the environmental aspects of these cars and is looking to reduce their carbon-footprint as part of an ongoing lifestyle statement”
Simon Henstock, BCA
What buyers want
BCA has previously surveyed a cross-section of professional buyers on their attitudes to alternative fuels. Auction buyers prefer factory-fitted LPG units to retro-fitted, with the view that these are easier to retail. While there were few concerns over modern conversions, buyers raised issues on the older, higher-mileage examples, with worries that older LPG units are unreliable.
BCA also asked for anecdotal evidence on when they might buy alternative-fuelled cars in the future. Responses included "only to a customer pre-order" and "to offer a retail alternative to diesel". Other responses included "if there were a number I could choose from" and "if volumes increased significantly in the marketplace".
Whatever the current volumes might be, the usual rules of remarketing apply - presentation and condition is vital and a good specification will help to attract the bidders. As buyers may raise concerns about the reliability of alternative-fuelled vehicles, make sure the vehicle is serviced at the correct intervals during its working life and provide a complete service history at the time of sale. Consider providing an independent mechanical condition report as well - your remarketing partner should be able to conduct this for you. And if the vehicle needs an MOT soon after the time of sale, get it done early as this will help promote buyer confidence.
Manheim's Barr thinks the future for the various fuel derivatives is going to be "quite interesting". He says: "Consumers are clearly increasingly interested in the environmental affect of motoring but they are also still primarily influenced by economics. Hybrids will continue to attract their attention but so also will the emerging new generation of highly efficient conventional fuel technology options, which are driving down CO2 emissions considerably. We know from all the recent research that if the green box can be ticked, together with a package of tried and tested technology combined with fuel economy, then this will be a vote winner with the motoring public. In turn, there is no doubt that the RVs of such vehicles will always be at the high end of market demand and value."