An empty open road

PCP return drives need for smarter remarketing


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Major vendors such as leasing companies, as well as manufacturers, will have to come up with smarter remarketing strategies in 2016 to cope with the challenges thrown their way by the growing volume of vehicles reaching the used car market, says valuations firm Glass's.

Volumes of vehicles will continue to grow with the return of PCP, coupled with the effects of a strong new car market feed through to the used sector, says the company. It's inevitable that this increase will impact on values.

Close up of a car headlightThe best way to combat this is through the "fastest possible, most effective disposal turnaround and sale", said Rupert Pontin, Glass's head of valuations. "In a more difficult market, ensuring the use of cash is being maximised in this way is essential."

Technology will be the key to making fast sales happen, he continued. "Online trade sales of all kinds are becoming more and more effective and efficient, especially through use of the NAMA grading system and improved online images and video."

Those likely to see the firmest values will be the manufacturers that have invested the most time and effort in creating strong remarketing programmes focused on the needs of franchise networks and vendors such as leasing companies.

"There are some good repatriation programmes now in place, many of which are also aiming to make the best use of technology. While they do tend to incur additional days to sale, this is generally outweighed by the benefit of the prices achieved in selling to a franchised dealer who truly knows the value of that vehicle to their dealership and the retail customer," said Pontin.

But manufacturers and franchise dealers face another problem – many of the PCP vehicles entering the market are in better, lower mileage condition than ex-company cars. This could lead to high grade vehicles increasingly being retailed through other channels.
The question will be: how much should you invest in refurbishment before a car is brought to sale?

"It could be that some models are unsaleable unless they are in excellent condition because that has become the de-facto standard," added Pontin.

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