When it comes to buying and selling cars, fleet operators have little time to trawl the country looking for the best deal and dealerships are feeling the pinch. Over 300 motor traders went bust last year, according to global information firm Experian.
Traditional methods of buying and selling can be expensive and time consuming and fleet operators are looking for an alternative and more direct method of reaching their customers.
The internet is becoming an increasingly popular tool. The benefits are obvious: users can search for cars at any time of the day, compare prices, even make a purchase at the click of a mouse.
This may sound like good news for fleet operators. But when the time comes to renew the fleet, many will have to work twice as hard to ensure their vehicles stand out from the thousands of other cars on the market.
Roger Woodward, managing director of vehicle remarketing firm Cars Direct explains, "The use of online auctions as a means of selling vehicles is on an upward trend. Contrary to traditional auctions which are often at a specified time and location, and can be some distance way, bidding for vehicles online has the benefit of being entirely at the convenience of purchasers in terms of times and location. Bids can be made at the office or whilst on the move and often in real time."
It can be risky however as it often requires buying from a photo online and some online companies are more reputable than others.
One website that hopes to reduce some of the risk is online remarketing firm AutoQuake. As well as a detailed description of each car with up to 70 photographs, it provides the registration and photocopies of the necessary paperwork. It also runs financial checks on each car.
Once a buyer selects a vehicle they must then travel to one of the company's three car centres in London, Leeds or Luton to make the final inspection and hopefully buy the car.
Since AutoQuake began eighteen months ago it has doubled the amount of cars it sells online from 50 to 100 vehicles per month. In 2007, it plans to increase this to 300-400 cars per month and is partnering with a number of leasing companies, fleets and dealerships. According to joint founder and CEO Fredrik Skantze buying or selling a car online offers a number of advantages:
"Fleets are looking for an alternative channel to the more traditional auction methods. They often have similar cars to sell and if they must go through the same channel for every car the pricing suffers. Also consumers are usually willing to pay a higher price for a car than a trader would," he says.
This sounds like good news for fleet operators. But an ever widening marketplace means more cars to compete with. Fleet operators must work even harder to secure the best price.
Gerry Lynch, managing director of used car remarketing company First Fleet, warns that corporate fleets that fail to defleet efficiently could be left in the vehicle disposal slow lane.
He says: "Almost daily we hear of new vehicle remarketing channels opening up, particularly online. If fleets are really interested in maximising disposal values they must invest in refurbishing vehicles to set standard, make condition inspection reports available to prospective buyers and put digital photographs of cars and commercial vehicles online. Additionally, we may see more sellers offering vehicles with finance and insurance packages available."
Other factors can also affect a car's value. Cars Direct's Woodward explains: "We're increasingly finding, especially with the top-end executive marques, that size really does matter when it comes to alloy wheels and residual values. Buyers have come to expect alloys to be fitted to premium brands, such as Mercedes, Audi and BMW, but we are finding that they are specifically looking at the design and size of the wheels, and are willing to pay a premium for the more appealing ones. If a vehicle is fitted with 17-inch alloys as standard, buyers are looking for desirable 18- or even 19-inch rims as they help to make the vehicle stand out."
Other popular 'must-haves' for buyers continue to be leather upholstery and satellite navigation which are both being made available on an increasing number of vehicles. Fuel economy and CO2 emissions will rank alongside mileage and colour in determining the desirability and resale value of fleet cars.
The increasing sophistication of the used car market and the widening array of disposal channels will play to the strengths of vehicle manufacturers, rental companies and contract hire and leasing companies who are prepared to invest in vehicle remarketing, according to First Fleet's Lynch.
"I don't see many corporate fleets prepared to make that commitment because despite many having millions of pounds tied up in vehicle operations, they generally view the fleet as a non-core activity."
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