SMA members are reporting that some fleet operators demand 'clean' reserve prices for cars in below average condition. They also said some stock has remained on their books for over 100 days, despite being repeatedly offered for sale.
Alistair Manson, SMA director, said: “This is both unrealistic and uneconomical as unsold vehicles often sell for less than the first bid many weeks later.”
In the first quarter of 2007,the SMA said vehicles sold at auction were being sold well above the reserve prices, but this was partly due to a shortage of stock. Since Easter the market has become more competitive.
Manson said: “Fleet operators need to face the reality of a changing market and ensure that vehicles are realistically valued when entered into the remarketing and auction arena.”
The SMA has issued the following action points for vendors:
Manson added that increased volumes from March registrations and a general weakening in market conditions, make it is vital for fleet owners to appreciate that ‘conditions have changed, demand has slackened, values are falling and unsold inventory is building’.
Mark Hankey, sales director, British Car Auctions (BCA): “Demand had become increasingly selective and polarised.
“The best cars continue to be sought after and are continuing to attract good prices relative to their condition, specification and mileage but high mileage cars that require costly reconditioning will not attract CAP clean prices. Vendors will have to be increasingly more realistic if they wish to achieve the fastest return of cash to bank.”
Mike Pilkington, CEO of Manheim, said: “The most successful sellers in the current climate are those that move with the market and maintain the active support of professional buyers for their product.
“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. There are clear signs that stock will stagnate unless it is priced accurately.”