The value of conditioning

Date: Monday, February 25, 2013

The acute shortage of used vans coming into auctions means it has become a sellers’ market. But that’s no reason for vendors to be complacent as James Dallas discovers.
The boom period that preceded the financial crisis of 2008 may seem like a distant memory now but the economy is still suffering the hangover and the commercial vehicle industry has not escaped.
One of the consequences of the crash was that new van sales fell off the cliff as businesses struggled to make ends meet and many, particularly small and medium concerns, went to the wall.
The knock-on effect three years down the line was that there was a chronic shortage of stock flowing into the used market. Ironically, this has made life easier for those who do have vans to sell, as the lack of supply has driven up demand from buyers who have hardly been spoilt for choice. As a result, prices have continued to rise, in tandem with mileages as operators work their vans harder before disposal.
George Alexander, chief editor, commercial vehicles at Glass’s Guide, explains: “Following a run of years when LCV registrations have been low, the shortage of prime, ready-to-retail used vans and pick-ups this created now sets the agenda. The consequence of fleet managers needing to work LCVs harder is that average age and mileage have risen and will continue to do so until increased registrations lift the pressure from those light commercials currently in harness.”
But there is no reason for vendors to become complacent – stock mix is vital and good values at auction cannot be assumed. Duplicate and damaged stock must be carefully managed and benchmarked against clean examples and the values achieved by other models in the segment. With retail demand weak, there is little enthusiasm from customers for poor quality product on the forecourt.

Duncan Ward, business development manager for commercial vehicles at remarketing giant BCA, emphasises the appeal of well-specified vans: “The load area should be ply-lined to stop inside-out damage and the rear doors should be solid – no windows for prying eyes to see a builder’s toolbox for example. Side loading doors and high-rooftops are often favoured, and don’t forget the driver – they work in the van, so comfort is just as important to them as it is to a car driver. Aircon, bulkheads, satnav and in-van entertainment systems can all make a difference. And if you are selling a fully loaded example, with every manufacturer extra including metallic paint – the fabled ‘Christmas Tree’ spec – then you really will get the buyer’s attention.”
 

Disposal time

There are a number of factors operators need to consider at disposal time.
First up is to make sure the vans are insured by the auction company from the point of collection to the point of sale when they become the buyer’s responsibility. The vehicles must be roadworthy and possess a valid MoT to be driven to auction.
Pre-auction bodywork inspections play an important role in determining both the specification and condition of the vans, which can be particularly useful for online buyers. An inspection can identify damage and potential costs of repair and can also ensure vans are realistically priced, increasing the chance of a sale. For leasing companies, an inspection may shed light on unfair damage that can be charged back to the lessee.
Although vehicles are traditionally ‘sold as seen’ at auction, transparency is always helpful for buyers, so vendors investing in mechanical checks prior to sale will improve their reputations along with their sale prices.
Removing livery before remarketing vans is advisable both to make them more attractive to buyers and to protect the seller’s name if the vehicle is subsequently involved in an accident or in criminal activity. The buyer is not obliged to remove sign writing that may contain the previous owner’s logo and trademark. While vinyl wraps can protect paintwork from minor scratches and scrapes they should be removed professionally to avoid causing expensive damage to the body, which would obviously diminish the vehicle’s value.
Vendors can also maximise the value of their decommissioned vans by sprucing them up with a touch of smart repair although the cost may not be appropriate for older vans with dings and dents that would require bodyshop treatment. Some buyers may actually prefer to see stock in its raw state to gauge how much work they need to do.
For nearly-new vehicles with superficial damage BCA offers its Smart Preparation service, which uses paint technology, cold metal dent removal and repairs to interior and trim to bring vehicles back to “showroom condition” and help vendors maximise returns in the auction hall.
“Smart Preparation is a useful tool in the van market, provided vehicles are chosen carefully. For a 2011 model year van at 10,000 miles in good condition, but with a few small dents, it can be a cost- efficient choice for the vendor,” says Ward. “However, the return on the investment to bring a five- or six- year old, 100,000-mile van, without a straight panel to its name, back to showroom condition is likely to be less rewarding.”
Reconditioning that removes ghosting left from the removal of signwriting can give values a boost, and for older vans BCA recommends its Smart Detailing package, which deletes trade names, steam cleans the engine bay and polishes and de-greases the exterior paintwork.
Says Ward: “Proper preparation and good presentation are vital if your LCVs are going to achieve the best possible price in the auction hall. And with the current high demand for well-presented vans, there is a massive opportunity for sellers. On any used van, condition is important – panels should be straight and clean, and trade name deletion must be done to a good standard.”
Vendors should also make sure their vehicles are valeted inside and out before entering the auction hall. When two similar vans are on offer, buyers are far more likely to choose the one that’s cleaned to a higher standard.
“Selling unprepared vans sends all the wrong messages to buyers and particularly affects the end-user buyer, who has a considerable presence at most commercial vehicle sales these days,” Ward says.
“While a trader or dealer will see a dirty van and try to buy it below-book to polish some profit into it, the end-user/buyer will often draw the conclusion that the van has not been cared for and will move on to another vehicle.”
Supplying all relevant documentation, such as logbook, MoT and service history is a vital part of the process and will enable the auctioneer to market the vans accurately and maximise attendance at sales.
Ward says: “A full set of documents is highly valued by professional buyers when offered with the vehicle at the time of sale.  The presence of the V5 means no delays in onward selling, while a full service history shows the vehicle has been well maintained by the previous owner and confirms that a warranted mileage is correct as declared.
“Building buyer confidence is hugely important and even hardened trade buyers value the comfort of knowing their judgement is supported by a comprehensive history file.“
For the end-user a light commercial is not only a workhorse, but a calling card for the business, so it needs to tick all the right boxes when it comes to condition and documentation.

 

Smart move for buyers

With new technology playing an ever-expanding role in vehicle remarketing, independent auction group SMA Vehicle Remarketing has launched an app that delivers details of stock available at its sites in Edinburgh, Kinross, Leeds, Newcastle and Birmingham. By scanning QR codes with the apps’ built-in scanner, customers can get images and full condition reports sent to their smartphones.
SMA claims it is able to pioneer digital innovations because it is free of the legacy systems that can stifle progress.
SMA’s boss Bob Anderson says:
“The capacity to deliver on technology innovations too often gets delayed or bogged down. We have avoided this
trap thanks to a clear digital strategy, great people and a leading-edge technology platform.”

 

 



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