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Guest opinion: Retail vehicle buyers belong in retail showrooms

The Fleet Auction Group CEO, Andrew Walker FIMI, believes that fleet vehicles should only be sold to registered motor trade buyers and dealerships rather than directly to the general public.

"There is a section of the remarketing industry that is advising fleets that selling ex-fleet vehicles directly to the public is a low-cost, quick disposal channel that achieves ‘quasi-retail’ prices.

However, as those in the retail motor trade are fully aware, when selling a vehicle to a member of the general public is that the Sale of Goods Act will apply; and there is no such thing as a ‘quasi Sale of Goods Act’.

This is a key reason why The Fleet Auction Group continually advises fleet disposal managers to ensure that all their de-fleeted vehicles are offered solely to professional motor traders and dealerships, rather than direct to the public. The many pitfalls and considerable corporate risks associated with selling to other than registered motor dealers, needs to be made clear to them.

In his report, ‘Corporate Responsibility for Used Vehicle Disposal’, published in September 2005, Professor Peter Cooke, KPMG Professor of Automotive Industries Management at Nottingham Business School, said that from corporate governance and a management viewpoint, selling to the public, either via staff sales, their own disposal channel or through auctions that deal with the general public, may be the most difficult of all methods of disposal to manage in a transparent way, despite the potential of higher vehicle prices.

The report goes on to list a multitude of disadvantages of selling vehicles through employee sales or a direct-to-the-public channel: requests for disposal of employee’s vehicle, requests for finance facilities, pricing policies, risk of private business developing, tax implications of any perceived benefit, and arrangement of independent inspection reports. All aspects that retail showrooms are perfectly geared up to offer.

Hence our belief that retail customers belongs in retail showrooms.

There seems to be a lack of forward thinking from those industry experts who appear to be pointing fleet vehicle vendors directly to the end user, with scant regard to the implications this path can lead to.

Over the years there have been many new initiatives in the search for the ‘enhanced-residual Holy Grail’, but selling de-fleeted vehicles direct to the public is not one that will help protect the future of the fleet operator or the retail motor industry.

The motor industry has entered a period of dynamic change, and we have all seen the remarketing sector evolve greatly over the last few years. It is impetrative that the industry’s decisions makers build on this evolvement in a socially responsible manner, and therefore contribute to the sustainability of the motor industry as a whole."

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