by Jack Kazmierski
July 17, 2009
NAFA’s 2009 Remarketing Survey
Do You Measure Up?
NAFA’s 2009 Used Vehicle Remarketing Survey sheds light on how fleet managers throughout North America remarket and how they benchmark the results of their resale efforts. How does your organization compare?
The results from NAFA’s 2009 Used Vehicle Remarketing Survey were recently published in NAFA’s FLEETSolutions magazine. NAFA polled 235 fleet managers from across North America—80% from the States, 13.5% from Canada, 5.5% with fleets in both Canada and the States, and 1.3% with international fleets. Here are some of their findings:
Remarketing policies vary dramatically. Replacement policies for automobiles and passenger vans range from 0 to 24 months to as high as 150 months, with the average falling between 37 and 48 months. For SUVs the range is between 37 and 48 months and 61 and 72 months, with some SUVs kept for as long as 108 to 120 months (10% of those surveyed).
According to the Survey, cargo vans and light-duty trucks are kept from between 49 to 60 months and 61 to 72 months, while some are kept for as long as 108 to 120 months. Nearly half of mediumduty trucks are kept between 108 to 120 months and 120 to 150 months, while most off-road vehicles are kept for more than 150 months. Over half of the fleet managers surveyed said they will not be making any changes to their policies this year.
Fleet managers seem to be evenly split when it comes to the methods they employ to remarket their vehicles. Forty percent said they remarket internally, while 35.7% use a leasing company and 36.2% employ a third-party.
Over 70% prefer auctions with auction locations being chosen by the leasing company 24.2% of the time to maximize value (17.4%) or based on proximity to the driver (4.8%).
A quarter of the respondents said they market in the spring and fall while 10% said they remarket only in the fall, and less than 3% only in the spring.
Sixty percent of fleets offer resale vehicles to their employees, basing prices on leasing company estimates (21.8%), NADA Guides (15%), and Black Book values (11.2%). Some companies also allow their employees to bid on vehicles.
Seventy-three percent of employers who offer their employees an opportunity to buy resale vehicles do not add a percentage to the book value or leasing company estimates, while those that do add between 1 and 5%.
The vast majority of respondents (over 75%) said they rarely, if ever, recondition their vehicles before resale. Those who do, spend vastly varied amounts on reconditioning: $35 to $2,500 per vehicle for automobiles (average: $178.34), less than $100 to over $50,000 for heavy-duty equipment (majority spend between $100 and $250, with a high of $80,000).
With a third of respondents saying they do not benchmark their resale efforts, it’s clear that many fleet managers may be missing out on opportunities to improve their remarketing efforts.
Those who do benchmarking base their data on a combination of their own previous experience with their fleet’s resale (48.3%), current retail value (20.7%), the original cost (18.2%), leasing company sales reports (16.7%), other published sales reports (10.3%), and by comparing results from similar fleets (10.3%).