By Sarah Tooze
Traditionally, if a dealer wanted to purchase ex-fleet vehicles from leasing companies, they had to visit the auction hall. But physical auctions are no longer the only means. Two of the UK’s largest leasing companies – LeasePlan and ALD Automotive, which sit at number two and five respectively in the FN50 (Fleet News’s listing of the 50 largest contract hire and leasing companies in the UK) – have begun using online disposal methods.
ALD launched its own online sales platform, ALD AutoSelect, two years ago. Through AutoSelect, dealers can view stock and decide whether to bid online or ‘buy it now’.
ALD also sells its stock via auctions, car supermarkets, direct supply to franchise main dealers and general trade. It takes a multi-channel approach as its stock mix is diverse. Sales volumes are split fairly evenly between the channels.
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Physical auctions account for 75% of LeasePlan’s sales, but two years ago this figure was at least 90%. It decided to lessen its reliance on physical auctions at the beginning of 2012.
It now uses a combination of invitation sales (sales hosted by an auction group but open only to dealers and selected trader groups), desktop sales (buyers bid at their leisure via a website) and electronic sales (buyers bid online alongside a live auction).
“We made the change to ensure we had a more diversified sales plan and were not too reliant on just one sales channel, ultimately preparing for the future UK market,” said Steve Jackson, general manager, direct channels at LeasePlan.
“Price was also a driving factor for revising our strategy, as well as the ease of disposal through peaks and troughs.”
Jackson still envisages auctions playing “a significant part” in LeasePlan’s future remarketing strategies as it has a “loyal following” at auction.
His diverse remarketing strategy is one endorsed by Kevin Watson, operations director at online remarketer Autotrade-Mail. Watson believes an auction-only strategy limits the audience, leaving a risk that an asset’s value won’t be maximised.
“By limiting the disposal of an ex-fleet car to an auction, an operator may be compromising the value of that vehicle,” he said.
“Using complementary remarketing channels will provide a much larger buyer audience to help maximise the value of the ex-fleet vehicle.”
The UK’s largest leasing company, Lex Autolease, favours auctions to dispose of its vehicles although it doesn’t only use auction giants such as Manheim and BCA.
Glenn Sturley, vehicle remarketing director at Lex Autolease, said: “The vast majority of our vehicles are sold through open auctions, which help to ensure fair valuations.
“We have worked hard to develop close relationships with both the major auction houses and small independents from across the country, to ensure comprehensive access to the dealer market.”
For dealer-owned leasing companies, such as Marshall Leasing and Pendragon Contracts, it’s a different story, as there is naturally a desire to de-fleet vehicles to their own group dealers. This also saves on third party disposal fees. Marshall Leasing has increased the number of vehicles that go to the Marshall Motor Group from less than 10% to 25% over the past 18 months.