The lockdown created a logjam of thousands of end of contract cars, prompting many vendors to reconsider their defleeting strategies. JONATHAN HOLLAND, managing director of ADESA UK, discusses how fleets are now reaping the benefits of online remarketing
Definitely. We are seeing a significant increase in online defleeting as a consequence of the Covid-19 crisis, prompted by vendors needing to remarket end of contract cars which have amassed since the beginning of the lockdown. For these vendors, speed to market is essential to realise assets in the most expedient and cost-effective way possible while limiting exposure to depreciation. Waiting for physical auctions to reopen has not been an option for them.
Our conversations with vendors show there is a real desire to review and challenge the status quo; for them, digital remarketing now makes more sense than ever before.
As a result, we have started to transact a small but growing number of end of contract vehicles still in their driver’s possession, addressing the issue of vehicles stuck in limbo on driveways during the lockdown.
Digital remarketing is resonating with vendors as it’s helping them to reduce defleet lead times, physical touchpoints and their total cost of disposal (TCD). With such a large backlog of vehicles to wash through the system, the immediacy of online remarketing has never been more prescient for them.
There’s a growing number of corporate fleets, funding companies, lessors, OEMs and dealer groups coming to us for the first time. Vendors who would previously have only used physical auctions are looking at online remarketing differently, and gaining firsthand understanding of how digital empowers them to quickly work through their defleets backlogs. They are also concerned about the increased costs of getting cars to auction as logistics companies introduce new processes to adhere to social distancing and sanitising rules.
One corporate fleet company jumped into the digital remarketing world for the first time in May transacting a large volume of cars with us, and they have been delighted with the results. We were also approached by a large dealer group that typically would send everything out to a physical auction. They had never transacted online before but needed to clear their stock logjam and could not wait for physical auctions to reopen. They’re now experiencing the online immediacy of turning unwanted stock into cash.
For all businesses, cash is king. Online remarketing is enabling vendors to realise their assets faster than in the physical auction world. End of contract cars can be remarketed immediately, limiting the impact of depreciation and removing costly storage and transportation fees. Vendors receive a lower TCD per vehicle with cash generated much sooner.
The vehicle remarketing industry has had to quickly pivot as a direct result of the Covid-19 crisis, and many physical auction companies are now using simulcast technology (a hybrid of physical and online) to facilitate sales. We believe this is part of a broader paradigm shift that will see a significant move to transacting online, whether that be through a physical environment or via specialised digital providers such as ADESA UK.
Yes. When it comes to buying confidently online, dealers need reliable and accurate condition reports. As an online specialist, ADESA UK has worked hard to deliver fully costed condition reports utilising cutting-edge artificial intelligence to ensure greater accuracy.
We’re now serving dealers who have previously said they would never buy vehicles unseen online. The Covid-19 crisis has forced them to do something outside of their comfort zone, so we’ve made it easier for them by providing quality condition reports and multiple images for every car on our platform.
Yes, we’re back to pre-lockdown averages. As fast as we get stock, we transact it and rather than vendors waiting for the next physical sales event, we can create an event within an hour.
Also, having more dealers on our platform speeds up the process. Part of the paradigm shift we’re seeing is that as buyers move online, that opens up the opportunity for both vendors and dealers to move the remarketing process upstream, enabling cars to be defleeted and bought much sooner than is possible in the downstream physical environment.
As long as vendors can describe a vehicle accurately and buyers can purchase with confidence, then why wait days to have it moved and processed before it’s offered for sale? Now vendors and buyers have many reliable options to choose from when it comes to complementing their operating models and meeting their needs.