Large fleets favour auctions
Fleet managers responsible for hundreds or thousands of vehicles do not generally sell direct to dealers.
Those that contract hire rather than buy their vehicles are unlikely to have a say in vehicle disposal.
A fleet manager who approached his contract hire provider about selling vehicles to a local dealer found the provider was concerned the dealer would “cherrypick the best vehicles”, leaving it to sell the others at auction.
Outright purchase fleets also typically prefer the auction route.
Paul Green, group transport manager at Selwood, said: “We favour the auction or other trade routes for disposal, mainly because when we dispose of our assets they are usually over four years old and/or have high mileage and so most dealers don’t see them as a vehicle suitable to retail or to make a nice profit on.
“Consequently, we find that our vehicles tend to go to end users or local traders who are happy to make a small profit on selling them on.”
All Scottish police fleet vehicles are disposed of by BCA under a framework agreement (essentially a pre-tendered contract) set up by the National Association of Police Fleet Managers (NAPFM).
Tony Chalk, NAPFM vice-chair and interim head of transport for Police Scotland, said auctions were the best route due to the number of vehicles being disposed of.
For SMEs, selling vehicles to a local dealer can prove more effective than paying to send vehicles to auction.
Cordek, which has a fleet of nine cars and six 7.5-tonne trucks, disposes of three or four vehicles a year, usually to a local independent dealer.
“Sometimes I think we should go down the auction route but I’m put off by the time and cost involved,” said Cordek’s finance director Grant Naris, who is also responsible for the fleet.
“I have to balance that against the ease of disposing of the vehicle to a dealer.”
CASE STUDY: Motability Operations
Motability Operations (which provides contract hire vehicles to more than 62,000 disabled customers through the Motability Scheme) disposes of its vehicles via its car sales arm, MFLdirect. On average, 200,000 vehicles are remarketed each year.
Cars are initially offered for sale exclusively to the franchised dealer group that maintained the car throughout the life of the lease. A vehicle is offered for sale while the customer is still in possession of the vehicle – up to two weeks before its planned hand-back date.
Supplying dealers are rewarded for buying back their managed and maintained cars in the form of a ‘Get Your Own Back’ reward. This recognises that cars returned to their original dealership require minimal transportation and the specific dealer can usually deliver a fast sale due to their in-depth knowledge of the car’s service history.
If the supplying dealer does not buy the car, it is made available to all mfldirect registered dealers on a first-come, first-served basis. The cars not bought on mfldirect.co.uk are sold via auction.
Alistair Jeff - 06/09/2013 08:59
Using lots of local physical auctions makes sense to avoid the cost of vehicle movements for the vendors. The challenge ahead is to use 'digital' to help connect buyers nationally with the cars in ways that work with their existing daily routines. An influx of new digital sales channels will only assist the industry if these great new channels are connected - an aggregated view of the trade market produced by an independent business will allow buyers to see all vendors cars and make an informed decision on their purchase. In many ways this is more about using 'retail' experience to improve effectiveness for trade buyers. Services like Autotrade-mail's MultiSource will connect vendors & buyers like never before - MultiSource is offering an aggregated view of 12 auctions (and growing) in one simple search. Each vendor & auction business should develop their own sales channels & buyer experience and as an industry how we connect with that stock though should be better informed & a lot lot easier than it is today.....