Remarketing Forecast; Selling Upfitted Vehicles

PepsiCo Supplier of the Year

donlen-pepsico-supplier-of-the-yearDonlen is very pleased to announce that we received the PepsiCo Supplier of the Year Award. PepsiCo worked with Donlen on fuel data consolidation, reporting, and analytics to help the food and beverage company reduce their total cost of ownership.

Thanks PepsiCo, we’re very proud to partner with you on your fleet initiatives.


This week Gus Xamplas, Donlen VP of Remarketing, gives insight to what’s happening in vehicle remarketing. Here’s his forecast and a few thoughts on selling upfitted vehicles:

Remarketing Forecast

The S&P/Case-Shiller index – a widely followed measure of home prices – rose at the fastest rate since the summer of 2006…before the “great recession.” This made me think about the way we benchmark used vehicle market price trends. We routinely compare sales volume and price against last month and last year. However, comparison to last year might not give us the proper perspective, as 2012 was an extraordinary recovery year. I think that 2013 is the year we begin the return to normal. What’s “normal”? Used vehicles will be worth less next month than they are this month and the biggest depreciation bite occurs in the earliest portion of the vehicle’s useful life.

But we need to keep this in perspective, and it’s nothing to be afraid of. It means the basic elements of cycling decisions – mileage and maintenance for instance – continue to be the trigger points for replacement decisions. It also means that depreciation rates for new vehicles need to be tempered by the used vehicle volumes expected in the market at the time of turn in, not the lower volumes and correspondingly high values which occurred in 2011 and 2012.

Early in the recovery, there was speculation around the sustainable SAAR level. You’ll remember the low point was a little over 10 million in 2009. The industry learned how to be profitable at 12 million annual new units and we thought the days of 16 million SAAR were way in the distant future.

The number of used vehicles that enter the market is a direct result of the number of new vehicle sales. At 12 million SAAR there weren’t enough used vehicles to satisfy demand, and prices soared. This year, we’re expecting 15.3 million new units to be delivered and auctions are anticipating the corresponding used volume increases from trade-ins and lease returns. But used vehicle values are still comparatively high and demand is still strong. Used vehicle prices favor cycling right now.

Selling Upfitted Vehicles

We’ve noticed that some of the damaged and inoperative trucks that are sold at salvage auctions have various upfit items still attached; things such as small cranes, compressors, and hose reels. Consider removing the equipment from damaged and inoperative units before they’re sent to us for sale – particularly if the equipment is still operable. It is likely worth more to you, either on another vehicle or as spare parts, than it is to a bidder in the lane.

In general, specialized upfitting narrows the pool of potential buyers. A used vehicle buyer who is looking for a particular upfit configuration will be willing to bid more on a truck so equipped. But finding that buyer quickly can be difficult. In our experience, it’s best to offer heavily upfitted vehicles at specialty auctions that attract the special-interest buyers. But these auctions have higher fees and are held less frequently than the standard light duty auctions, sometimes as infrequently as four times per year. Also, they are absolute sales. Because there is no reserve, we’re cautious about consigning vehicles to specialty auctions unless it’s the absolute best option.

If you have questions about whether the upfitting on your vehicle will add or detract from its marketability, work with your Donlen Account Manager who will consult with the Vehicle Remarketing team. Together we can find the best solution for your vehicles.

Gus can be reached at 847-412-4995.


donlen-fleetweb-datamart-fuel-groupFleetWeb® Tips

Access all of your fuel reports inside of DataMart through FleetWeb.

  1. Type “dm g fuel” in the quick search field (abbreviations for DataMart, group, and report name).
  2. Click desired report from the drop down list and enter requested criteria.

donlen-hertz-value-lease-toyota-corolla-le-0413Hertz Value Lease™ Deal of the Week

 

2012 Toyota Corolla LE*

  • Estimated Mileage: 14,798
  • Exterior Color: Silver
  • Hertz Value Lease Base Price: $14,488

*Vehicle was available at the time of posting to FridayFleet. The exact vehicle may not be available after this date. Photo of vehicle is for illustrative purposes only. Contact your Donlen Account Manager to learn more about Hertz Value Lease vehicles that may be right for your application.


Driver’s Corner

Can you see any part of your vehicle in your side view mirror? If so, you need to make some adjustments. When positioned correctly, the viewing angle of the mirror will be further outward, eliminating blind spots. Check out this graphic to see how to make sure you’re not “driving blind.”


And finally…

And finally, today we have a soundtrack to go along with our find of the week (or maybe the year if you’re a classic car lover like us!). If you’re able to access YouTube, start this music first, then check out the pics of this unbelievably fantastic 1962 Chevrolet Bel Air Sport Coupe. But don’t worry if you can’t listen to the Beach Boys classic while checking out the car, it’s just fine on its own. Can’t you imagine how fun this would be to drive? We can. Giddy up!

Have a nice weekend. Safe travels.

Originally appeared in FridayFleet on April 5, 2013


About Donlen
A wholly owned subsidiary of The Hertz Corporation (NYSE:HTZ), Donlen (www.donlen.com), with headquarters in Northbrook, IL, is the fleet industry’s most comprehensive and integrated provider of financing and asset management solutions. Since 1965, Donlen has offered its clients highly personalized and responsive customer service, and their workplace excellence has been recognized as one of Crain’s Chicago Business “List of 20 Best Places to Work in Chicago” each year from 2009-2011, a Leader on “The Global Outsourcing 100®” list by the International Association of Outsourcing Professionals (IAOP) for seven of the last eight years, and a National Association for Business Resources “101 Best and Brightest Places to Work For in Chicago” each year from 2007-2012. Donlen’s innovation has been awarded with the Computerworld “2012 Honors Laureate for Economic Opportunity,” the “2012 InformationWeek 500” list for innovative technology; the Stevie® “2012 Gold Award for Business Intelligence Solution,” the Silver Award for “2012 Front Line Customer Service Team of the Year,” and the “2011 Corporate Environmental Responsibility Program of the Year.”