The first Vehicle Remarketing Association (VRA) Remarketing Seminar was held last month at the Ricoh Arena in Coventry and provided an opportunity for members to debate the state of the market and suggest ways to make life easier for leasing and auction companies alike.
At the VRA event remarketing experts called for an industry-wide vehicle description and grading guide to be introduced. It would benefit dealers in providing consistency of description.
Vehicle condition is already graded for online sales, but there is a disparity between auction companies and delegates felt it would be beneficial to create a single standard.
The standard would be in addition to the BVRLA’s Fair Wear and Tear guide, which is used by fleet man-agers and contract hire and leasing companies for end of contract damage charges.
Delegates pointed out that vehicle age would need to be taken into consideration as well as the model.
A survey ahead of the seminar found that VRA members, who include motor auction houses, leasing companies and vehicle manufacturers, believe the current state of the automotive market is ‘bad’ compared to the period immediately before the recession.
When asked what the key influences were on the remarketing sector last year most members considered ‘weak new car sales’, ‘contract extensions’ and ‘uncertainty over jobs’ to be the main drivers.
However, over the next year they believe the key influences will be ‘uncertainty over jobs’, ‘fuel prices’ and ‘weak supply of used vehicles’.
Presenting the survey findings at the VRA seminar, Professor Colin Tourick said: “In the last 12 months the number of extensions are nothing like they were.”
He also pointed out that there was “inconsistency” from members regarding their business’ performance and market conditions with most members saying that their business had ‘fared well’ in the downturn.
Other key findings included:
- Price guides: VRA members said that when interpreted properly price guides were still relevant, but tend to follow the market too quickly. Reduced working days in April, due to Easter and the Royal Wedding, caused vehicle values to fall between 6-8% in a month, and the guides were criticised for following the information quickly, adding volatility to the market.
- Vehicle grading: Members were concerned about the accuracy of CAP Clean graded cars, which can vary from flawless to needing a few hundred pounds of SMART repairs before meeting the right standard.
- They said a written standard was required, possibly administered by the VRA.
- Physical auction: Online auctions are recognised as a growing area, but the consensus was that they would only account for 25% of sales over the next five years. They are still seen as complementing physical auctions rather than a replacement, but they could be the first choice for high-quality stock where buyers are less concerned about seeing the cars.