REMARKETING: Defleeting - Power to the people
04 March 2013
Fleet managers have more control over the defleet value of their vehicles than they might suspect, as there are a variety of ways in which they can impact the performance at auction. Paul Barker finds out more
It seems the most obvious of points that the price a car is sold for come disposal has a huge impact on its total running costs over the time it's on a business car fleet. But some operators are making serious and costly mistakes in the way they defleet, which, with a little preparation, planning and process, rather than financial expense, could be rectified.
"Never lose sight of the fact that condition will always be the overwhelmingly important factor for fleets to consider when remarketing their vehicles," says Simon Henstock, UK operations director at auctions giant BCA. "It is also one area that fleet managers have a greater degree of control over, particularly if the age and mileage parameters are decided elsewhere."
As well as ensuring drivers are aware of their responsibilities to care for what are basically company assets, fleet managers should also prepare the driver for their change of vehicle.
"Processes need to be put in place at defleet minus 30 or 60 days whereby the company car driver is contacted to ensure the service history is up-to-date and the service history has not been lost," states Autorola UK business director Jon Mitchell. Missing service stamps can have a key impact on the price achieved at auction (see 'Doing your sale a disservice', opposite page), and can simply be a matter of calling the dealership that carried out the service. They will have records of the work, so will stamp the book if it's brought in.
"It would make all the difference at the time of defleet," says Mitchell. "There may even be an argument for fleets to introduce a penalty or a clause in business users' contracts to ensure their vehicles are returned with everything in order," he continues. "If fleet operators review their strategy to incorporate such processes, everything is more likely to be in place at the time a vehicle comes off fleet, which will make it a more attractive proposition at auction."
Smart repairs are relatively cheap and can improve the resale value by hundreds of pounds, but poor quality damage repair can adversely affect value, says BCA
Other costly missing items can include DVD satnav discs and in-car entertainment codes. Ensuring cars are correctly prepared is especially pertinent with premium or sports vehicles, as it increases the chances of the car not finding a buyer. "If prestige vehicles are not perceived as in A1 condition they are less likely to be sold than volume vehicles, which will still sell at auction, albeit not so well as their clean siblings," says Mitchell.
The defleet process, however, actually starts with the decisions made when acquiring the vehicle, and leasing firm Leaseplan's head of remarketing James Hopkins has a cautionary tale of where spending more money reaps dividends. "While marque will often determine broad resale value, certain vehicle specifications can introduce a surprising amount of variance," he says, pointing to diesel Audi A5 models with built-in satnav going for around £2000 more than those without, when the option cost £1100 when the car was first specified.