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Arval launches consumer used car site as Leaseplan closes equivalent
Date: 20 November 2020 | Author: Jack Carfrae
Arval has launched a new direct-to-consumer used car website to sell and re-lease ex-fleet vehicles directly to the public. Known as Autoselect, the site went live on 1 October, which followed fellow contract hire giant Leaseplan's closure of its similar used car platform Carnext, in September, after two years of operation in the UK and significant financial losses.
The former company sold cars to consumers prior to launching the Autoselect brand, which it described as a "group strategy" as it has appeared in other markets.
"We've been doing this in the UK on a fairly low-key level for 18-20 months plus. effectively, we were a dealer on Auto Trader," Arval's remarketing director, Gary Burns, told Business Car. "We don't - and we won't have - a bricks and mortar presence. It's very much home delivery.
"The used car sector has changed, perhaps permanently, as a result of the coronavirus crisis, and a growing number of buyers are looking for a process where every step - choice, finance and delivery - can be carried out entirely remotely."
The site features vehicles available to buy outright or on finance, all of which are said to have been refurbished, subject to a 128-point AA inspection, have a service history, and include a fresh service or MOT if either is due in the next six months.
Part exchange is an option and UK mainland delivery is included in the sale price. There is also a 14-day "cooling off period", which means customers can return "any vehicle that doesn't meet their needs".
"It's also easy to compare vehicles side by side, and they're advertised with a price to purchase and a price to lease," added Burns.
Autoselect also encompasses the firm's re-lease service, initially launched in 2018, whereby low-mileage ex-fleet vehicles are offered to consumers and businesses.
"The days of the three-year/60,000 company car are changing," said Burns. "Average mileage and age are reducing, primarily because of the influence of personal leasing. [and] personal contact hire is quite an extensive part of our fleet now.
"When vehicles reach the end of their contract, they'll maybe be a little bit younger with a bit less mileage. In some cases, we've vehicles returning with less than 15,000/20,000 miles on them - they're not far off a new car - so there was an obvious option to give the car a second life."
The firm was advertising 161 cars on the site at the beginning of November - less than 1% of the 40,000-50,000 vehicles that Burns said Arval defleets each year. "We'd like to have low hundreds advertised at any one time," he added. He said the company had a bigger target for 2021 but did not confirm a figure.
Leaseplan's Carnext direct-to-consumer used car brand launched in the UK in 2018 and, similarly to Autoselect, offered ex-fleet vehicles via online-only transactions. However, Carnext also established a physical site in Milton Keynes. Shortly after it opened, Leaseplan's then UK managing director, Matt Dyer, told Business Car it would keep a stock of between 200 and 300 vehicles on the premises and that there were plans for additional physical sites.
"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 [used cars] a little bit," he said at the time. He also suggested that, the firm might re-lease second-hand vehicles via Carnext, but a Leaseplan spokesperson confirmed that it offers neither a leasing nor a subscription service for used cars.
They added: "As of September, we are no longer selling cars any more in the UK through Carnext.com. We're currently in discussions about working closer together with BCA and Cinch, who are our long-term remarketing partners."
The Carnext brand continues to trade in continental Europe but has suffered heavy losses, which began before the pandemic. Profitability was down 23.2% in the first quarter of 2020 and year-on-year growth fell by 145.7%. In Leaseplan's quarter two financial report - published on 12 August, shortly before Carnext's UK closure - the brand saw a further 16% drop in profitability, while year-on-year growth dropped by 37.7%, leaving profits and growth respectively down by 39.2% and 86.1% in the first six months of this year.
