Auctions ramp up charges
21 August 2008
Fleets have been warned they face severe charge increases from auction houses when it comes to selling their vehicles.
The RMI Society of Motor Auctions (SMA) has said companies have been able to absorb rising overheads in the past few years, but will now have to pass on cost increases to customers.
BCA's managing director, Andrew Hulme, said the recent rise in fuel prices has been the most obvious influencing factor.
"With recent increased energy costs and other business costs forecast to continue to rise, most industries in the current economic climate have little option but to review their charges and pass them through where appropriate," said Hulme.
"In this climate, few will be able to absorb them. We will continue to monitor the situation on an ongoing basis."
Louise Wallis, head of the SMA, points out there has been a series of customer service and technological improvements brought in over the past few years, such as collection services and IT-based bidding.
"All this brings huge benefits to auction customers," said Wallis.
The BVRLA's John Lewis agreed these improvements have improved the customer experience, but says they have also brought in extra money for the auction companies.
"In these very cost-conscious times our members would look to explore other means of disposing of vehicles if this particular route to market became too expensive," said Lewis
The warning comes shortly after auction company Manheim announced that average residual prices are falling.
The average fleet selling-price for July was down 7.9% compared to June, and the average price for the whole market was 8.7% lower than July 2007.