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Call for businesses to get real on resale values
Date: 16 May 2007
Ex-fleet vehicles are struggling to sell at auction because businesses are insisting on inappropriately high reserve prices, according to the RMI Society of Motor Auctions.
The Retail Motor Industry Federation subsidiary claims some stock has remained on auction houses' books for more than 100 days despite being put up for sale several times, because fleet operators are demanding 'clean' reserve prices for vehicles below average condition.
"This is both unrealistic and uneconomical as unsold vehicles often sell for less than their first bid weeks later," said SMA director Alistair Manson. The SMA said the trend at the start of this year of vehicles being sold well above reserve prices has reversed since Easter as stock levels rise.
"With increased volumes from March registrations and a general weakening in market conditions, it is vital for fleet owners to appreciate that conditions have changed, demand has slackened, values are falling and unsold inventory is building," said Manson.
"Buyers are increasingly avoiding some vendors' sales as they do not have confidence that the stock is priced to reflect condition and the changing market," said Manheim chief executive Mike Pilkington. "There are clear sings that stock will stagnate unless it is priced accurately.
