First published in Fleet Auto News June 30, 2017 By Caroline Falls
The internet of things has been a major boon for auctioneers of used fleet vehicles and fleets looking for best possible returns, said Chris Goscomb, managing director of Queensland-based Nasco truck and machinery specialist auctioneers.
“There’s been a big shift to auction,” he told delegates at the IPWEA Australasia Fleet Conference in Brisbane in May, comparing the disposal method to selling via trade sales.
“Put up your hands if you dispose of vehicles through auction,” he asked the room full of fleet managers, many from local government councils. There was a sea of hands that shot up to prove his point.
Simulcast options had opened up the potential bidding pool to anyone anywhere. The old mindset of 10 years ago that an auction is where one can pick up a bargain no longer holds true, he said.
It’s not unusual for vehicles today auctioned in Queensland to sell to Victorian based buyers, or vice versa, Goscomb said, adding the increased pool of buyers was driving up returns for sellers. “Buyers can use phone, tablet or desktop and are very comfortable buying online.”
As well as traditional auctions and online auctions, there is increasing use of an online “buy now” option on vehicle stock listed by auctioneers. Goscomb said the online auction audience could reach several hundred. He said vehicles being sold online had increased to near 50% from about 30% a few years ago. He said auction clearance rates today were often 100%.
Goscomb provided examples of how auctions are trampling trade sales and why. Here’s one you won’t forget: A western Qld council sold an Isuzu 500 tipper for $22,000 in a trade sale to a dealer in Toowoomba, who then offered it into a Nasco auction in Dalby two weeks later where it sold for $37,500.
In another example, a north-west Qld council sold three CAT 12H graders to one buyer via a trade sale for $301,000. The buyer resold the three graders at an auction four weeks later for $380,000.
Trade may seem like an easy way to dispose of assets, and anyway you may have locked in a guaranteed buy back price when the vehicle was originally purchased. But, that’s a habit that’s being broken as fleet managers recognise it’s an avenue where dealers resell at a significant profit, and a lost opportunity for improved ROI, or return on investment, for their own organisation.
Goscomb said government fleet vehicles, including state and local council assets, were among the most highly sought after at auction. Those fleets were getting top residual values at auction thanks to their reputation for best maintenance practice.
Goscomb had some tips for fleet managers looking to maximise returns from disposals: Avoid purchasing specialist brands, as there will be an impact on ROI because there are less buyers for anything that is not mainstream. Similarly, avoid personalising vehicles or purchasing at the top of the range. Detailing the vehicle mid-life and at the end of life was also a money spinner.