REMARKETING: The alternative used route
17 January 2014
Author: Jack Carfrae
Jack Carfrae examines the state of alternative-fuel vehicles in the used car market and whether they've had time to make a real impact, or if it's a case of wait and see.
The race to cut emissions has accelerated the amount of alternative-fuel vehicles on the new market. It's still a case of 'toe in the water' for a lot of fleets, but the vehicles are muscling their way through in small but increasing numbers.
It's early days for the used car market too. But while the time elapsed between procurement and defleet still hasn't been long enough to see enough second-hand electric vehicles appear for the remarketing industry to make a proper call on them, hybrids, however, are near enough part of the mainstream, and newer models with reasonable miles are good sellers according to BCA's operations director Simon Henstock.
"Hybrids are very much part of the remarketing fabric now, with BCA handling several hundred examples every month, with the majority coming from fleet and lease sources. There is a steady demand for younger hybrids, although older, higher-mileage examples need to be sensibly valued to attract the buyers.
"Remarketing parameters for hybrids are similar to diesel in terms of age and mileage, but price performance is prone to more erratic peaks and troughs than both petrol and diesel models. This is typical of low-volume sectors, where model mix has an effect."
Alex Wright, managing director of Shoreham Vehicle Auctions, says hybrids are considered tried and tested by the used market, so they're a safe bet: "The technology has been around for some time, and so with this proven reliability and ability to cover long distances it is seen by many businesses as the best solution to going green."
He adds that well-maintained examples are paramount for a good sale though, as second-hand buyers are still cagey about the cost of repairing a hybrid drivetrain.
"There is a strong market for hybrids, as businesses want to be seen to be going green and the five- to seven-year old Prius is ideal for this profile. The main thing buyers want from hybrids is a clear indication that the vehicles have been maintained properly through their life to date."
Henstock agrees and adds: "Buyers generally prefer younger, lower-mileage examples, mainly because of perceived worries about the reliability of the batteries as they get older. As older models reach the market, questions about longevity and even replacing the fuel cells emerge, so age and mileage is a concern."
Wright cites the Toyota Prius as an alternative-fuel vehicle with "a proven track record" that can be relied upon to sell well. He also predicts that the new wave of diesel hybrids, such as the Peugeot 508 RXH and Volvo V60 PHV, will sell well when they eventually appear on the used market: "The new diesel plug-in hybrid technology is very good and addresses any range-anxiety issues held with EVs, so we predict used values will be strong as a result."