Fleet vehicle remarketing is part of every fleet cycle, but if you don’t have the right procedures and information, it can quickly turn into a nightmare. This is one area where you need to make sure you are getting expert guidance.
The term ‘remarketing’ refers to the process when vehicles are retired from a fleet and either sold or traded in for new vehicles. Anyone who has gone through the fleet remarketing process will tell you that attention to detail is the only way to get through it.
While the process sounds simple enough, when you’re working with fleet vehicles, the remarketing process needs to factor in details such as high mileage risk factors, availability and cost of replacement vehicles, changing fleet needs: do you need to replace with similar vehicles or have your fleet needs changed? What does this mean in terms of cost? And many, many more factors.
Because remarketing forms part of the overall fleet cost, you want to ensure that you are saving money and improving your overall fleet efficiency. This means that the remarketing process must form part of your fleet strategy to ensure a seamless process.
At EQSTRA, remarketing is often one of the first big steps that clients take when taking on a professional fleet partner. Whether your fleet has grown exponentially, or whether you are simply looking to refocus on your core business rather than fleet management, remarketing is often one of the first steps.
This is because many companies opt for EQSTRA to acquire their vehicles outright and then work on a leaseback basis. This has many benefits including:
- Reduced risk to your business
- Instant cash injection and improved cash flow that can be used to support your core business
- All vehicle admin processes are managed by experts, which dramatically reduces workload and risk
- Your fleet now becomes a true asset that is working FOR you, instead of a necessity that requires constant attention and maintenance.
- Vehicles that have reached the end of their lifespan or no longer hold relevant value are assessed and then ‘disposed’ of, which usually means they are sold off.
- Clients can opt for various financial solutions that best suit their business needs.
Process transparency
A proper fleet partner will always ensure complete process transparency and follow very specific remarketing guidelines. The goal is always to reduce cost and risk for the client.
A vital part of the process is vehicle evaluations. If, for example, EQSTRA is taking on a client fleet it is important to ensure all service histories, maintenance plans, repairs, accident reports, and general wear and tear are carefully evaluated. The condition of the vehicles determines their value which, in turn, affects your entire fleet strategy.
EQSTRA is a member of the Southern African Vehicle Rental and Leasing Association (SAVRALA) and closely follows guidelines and best practices when evaluating vehicles. Evaluations of the vehicles are done in detail and all information is shared with the client, so that customers can be assured they are receiving the best value for any vehicles that are sold/refinanced.
Impact of current new vehicle delays
Over the past few years the value of used vehicles has gone up, but in many ways, the fleet industry is used to fluctuations, changes, and delays. So while the magnitude of new vehicle delays is unprecedented it is just another market fluctuation and doesn’t have a big impact on normal remarketing procedures. The delays are being managed and there are many solutions to look at while the new vehicle market recovers.
COVID-19 had the biggest impact on new vehicle supply, but the impact carried over into 2021 with the global solenoid chip shortage and local factors such as the KZN floods.
Some vehicles in circulation have therefore stayed on fleet longer than expected and must be maintained diligently in order to keep running efficiently until they can be replaced. But we’re not talking about running a vehicle five years past its lifespan. In most cases, it is months or at most a year. And that can be managed with maintenance.
In terms of vehicle lifespan, EQSTRA parameters remain the same, even with the delays in new vehicle production. It all depends on the specific vehicles and their intended use, but 180 000 km is still considered the upper limit after which the risk of increased maintenance costs becomes too high.
That said, most OEMs have been very supportive in terms of extending maintenance and service deadlines (especially during the COVID-19 lockdown) and ensuring that vehicle owners—including fleets—did not lose vehicle value due to the country being on lockdown. In some cases predicted vehicle lifespans have been extended to accommodate delays in new vehicle supply.
The ‘hidden’ remarketing details
Remarketing usually includes a change in vehicle ownership and EQSTRA handles all of the admin on behalf of their clients. This is a tedious process that must be followed to the letter to avoid any SARS/ownership queries down the line. EQSTRA perfectly manages this side of the remarketing process.
Another factor that often comes into play is employees who want to buy these vehicles when they are removed from the company fleet. EQSTRA assists with all necessary procedures and documentation when company vehicles are sold to staff. Doing this through a fleet supplier instead of selling directly to staff ensures that all tax requirements are followed and that there can be no confusion down the line about the vehicle still being a company benefit even though the staff member now legally owns it. It adds a level of security for all parties when such sales are managed by a fleet supplier.
In addition to all admin, tax, and legal requirements, the remarketing process must also cover basic details such as removing company branding. You don’t want random people driving around with your company logo!
At the end of the day, remarketing is easily one of the most admin-intensive fleet processes and it requires a fleet partner that will follow all legal and best practice rules to the letter.
Vehicle remarketing is an admin-heavy process and the right fleet partner will do it all for you. Contact us for fleet management solutions for your business.
