Leaseplan begins consumer used car sales
04 September 2018
Author: Jack Carfrae
The UK's second-largest leasing company has started selling ex-fleet stock to the general public via its new Carnext website. Jack Carfrae reports.
Leaseplan has launched a direct-to-consumer remarketing website known as Carnext.com, which specialises in selling three-to-four-year-old ex-fleet cars to the general public.
The concept began in the company's native Netherlands and currently operates in 16 other countries. Vehicles can be bought completely online, without the buyer having physically seen them, and delivered to customers' home addresses, but the company has also established a site in Milton Keynes, UK, where cars are available to view, test drive and purchase.
Unlike traditional used car sales, haggling is not an option and prices are set using the firm's expertise. Every model is said to have a full-service history, and is sold with a 14-day money-back guarantee and one year's warranty. Finance packages, similar to those found at conventional dealerships, are available and the company is also accepting part exchanges.
Speaking to BusinessCar, Leaseplan's managing director, Matt Dyer, said, "We see the used vehicle market as a key market for us in its own right, in a way that, perhaps, we've not done in the past. Globally, it is now at the same sort of size as the leasing market, at around ?65 billion, and the volumes in the UK are big; we'll be well over seven million used vehicle transactions this year."
He described the models sold by Carnext as "towards the upper end - higher value, lower mileage, younger age profile. We wouldn't be bringing older volume and really high-mileage models to the table." Dyer claimed there was a sufficient number of consumers willing to buy second-hand cars purely online.
"We shouldn't underestimate the fact that there are some customers who are quite happy to transact simply on an online basis. Our feedback and research suggests that there are customers who are ready to make that step, but I wouldn't say it's the majority," he said.
"Our assessments still suggest that, on average, the used vehicle transaction probably requires in excess of one visit to a dealership; it suggests that people do want to go out and touch it a little bit, but even with that number, there will be some that are happy not to."
Dyer did not reveal how many vehicles have been sold via the platform so far, either in the UK or abroad, but confirmed that the Milton Keynes site had a "rolling stock of 200-300 vehicles". He also did not say whether or not Leaseplan's remarketing strategy had changed in regard to traditional channels with the advent of Carnext.
The company has 25 Carnext sites throughout the European markets in which it operates and has ambitions to double the number "in the medium term", including adding more in the UK. "We've got no set mind in terms of how many we will get to in totality in the UK, but I can assure you that we have one or two additional sites already in view," added Dyer.
There are also plans to lease second-hand vehicles on short-term contacts via the platform, similarly to the company's Subscribe & Drive service, which launched at the beginning of 2018. The latter scheme offers new vehicles to consumers and businesses on zero-deposit, three-month contracts; after the initial term, contracts can be cancelled with one month's notice or the car can be swapped for a different model. Though it has not said when, Leaseplan has signalled its intention to launch a similar initiative for used cars via Carnext.
"What we also see is the used vehicle market developing in a way that sees a more willing or open mindset to leasing and subscriptions in the future," said Dyer. "This could be that small businesses or consumers aren't ready to sign up for three or four years, but want something for a shorter period of time.
"We tend to develop Subscribe & Drive around a package, rather than making it so vehicle-specific, so people can choose their mileage banding. What we're looking to see is if people are willing to go from one subscription to the next subscription to another subscription, based on the flexibility they're looking for around the type of vehicle or the mileage pattern. I think there's every reason to believe that a used vehicle customer is as open to that proposition as a new vehicle customer."