WLTP creates additional opportunities for fleet disposal profits says Aston Barclay
The growing demand for used cars, particularly diesels,
should encourage more fleet and dealer vendors to consider refurbishing stock
prior to sale to increase their disposal profits.
Aston Barclay says it has reviewed the condition grades of
thousands of used cars it sold in September and October. The average value of a
grade three and four car during those months was £6,429 and the difference in
price was 6.99% of CAP, which equates to £449.
By investing £185 in refurbishing the grade four car to a
grade three vendors would be rewarded with an average £264 uplift in price in
the current market, according to the vehicle remarketing company.
Refurbishment has been a key talking point in the industry
as leasing suppliers have been forced to extend contracts due to some motor
manufacturers’ new car orders being affected by the introduction of the Worldwide
harmonised Light vehicles Test Procedure (WLTP).
Indeed, new analysis by automotive data provider JATO Dynamics
reveals that 37% of new models have yet to be homologated to WLTP standards.
That, in turn, has restricted used car volumes coming into
the market, particularly in the fleet, personal contract purchase and personal
contract hire sectors, as operators/owners retain existing models.
High demand, said Aston Barclay, had seen stocking days of
late and low and ex-fleet used cars reduce by four days and 1.6 days
respectively during September and October, while prices had increased by £287
and £447 year-on-year.
Aston Barclay believes it could be March 2019 before this
WLTP-induced issue resolves itself, and in the meantime used car demand and
prices were likely to remain strong.
“We have taken the average prices of the two different
grades of cars and as individual models need slightly different refurbishment,
but from analysing our data it is clear vendors need to consider refurbishment
more seriously,” explained Martin Potter, Aston Barclay’s group operations
“Refurbishment isn’t relevant to every make and
model, but in this buoyant used market it’s worth sitting down with your
remarketing partner and doing the sums to identify the end of contract and part
exchange cars where extra disposal profits are available.”