A surcharge for pure battery-electric used vehicles (BEV) leaves many buyers reluctant to switch to cheaper diesel used vehicles.
Alternative fuel vehicles, which include mild and plug-in hybrids as well as all-electric cars, only make up between 5-8% of Aston Barclay’s used inventory.
However, for some fleet customers it can represent 10-12% of their total inventory, according to Martin Potter, managing director – Aston Barclay customer.
He says fleet operators are realizing that although they are currently remarketing three-year-old internal combustion engine (ICE) vehicles, their product mix will change quickly as the majority of new fleet registrations become electric.
Recent research by Centrica Business Solutions showed a healthy appetite for fleet electrification, with UK companies planning to spend £ 16 billion on plug-in vehicles in 2021 – a 50% year-over-year increase.
It found that UK companies had spent £ 10.5 billion on EVs and on-site charging stations through March 2021, but are now planning to invest £ 15.8 billion in the same area over the next 12 months .
Two fifths (40%) of respondents said they had increased the total number of electric vehicles in their fleet between April 2020 and March 2021.
Incentives for fleets and company car drivers have contributed to the record registrations of electric vehicles thanks to the new tax rates for benefits in kind (BIK) introduced last spring.
“We are all working very hard to understand the market and, most importantly, where consumers are from,” said Martin Potter, Aston Barclay
According to the Society of Motor Manufacturers and Traders (SMMT), a total of 108,205 battery-electric BEVs were sold in 2020, significantly more than the 66,879 plug-in hybrid electric vehicles (PHEV) registered during the year.
Regarding non-plug-in mild hybrids, the SMMT data shows that 110,087 cars have been registered.
Two thirds (67%) of the approvals for BEVs and PHEVs (68%) came from fleets last year.
Potter said, “The hybrid stock we are selling is 44 months old, averages 48,000 miles, and averages around £ 13,000.
“This is very similar to typical fleet inventory and at a price that the consumer can work with while looking at the electric battery, which is an average of 20 months, 18,000 miles and an average retail price of £ 25,000.
“The gap between what someone has to pay for it and a diesel or even hybrid equivalent is so big right now that it’s hard for them to justify, but that is about to change.”
Dylan Setterfield, head of forecasting strategy at pricing expert Cap HPI, recently told Fleet News that the absolute higher residual values (RVs) of electric vehicles were not just due to higher list prices; Small amounts also have an effect.
RVs are supported by carefully managed remarketing strategies by the manufacturers, keeping used copies in the dealer network or negotiating bulk deals for niche second-hand use,
However, he assumes that the current markup on used BEVs and PHEVs will gradually decrease over time thanks to increasing quantities.
The values of older used models can also come under pressure when newer models come up with better technology or a lower list price.
“We are all working very hard to understand the market and, most importantly, where consumers are from,” said Potter.
Covid helps drive sales time reduction
After welcoming buyers back to the auction halls in April, Potter told Fleet News that the return to physical sales was worth it as conversion rates rose and those in attendance made up a higher proportion of the final bids. “The physical buyers were definitely buying more cars,” he said.
Aston Barclay takes an “omni-channel” approach to selling its vehicles, the mix depending on the industry it serves.
Fleet vehicles are sold online, for example, but buyers can also bid in person in the auction hall. Cars are not driven through the auction hall, however, and buyers can view the stocks before they are sold.
Inventories where condition may be more of a potential problem, such as: B. the exchange of dealer parts, are driven through the auction hall, while OEM stocks are traded externally and completely virtually.
Potter said, “I’m really glad we have this different approach to different sectors and without the pandemic I think it would have been really difficult.
“The pandemic has forced people to get used to different technologies and different types of remarketing.”
He continued, “It’s a really exciting time for business. More and more people are looking for variety in vehicle launches to maximize their value, but the most important thing is fewer days to sell, especially in the fleet and financial sectors. “
As soon as a vehicle is removed from the fleet, the leasing company no longer receives any monthly rent. Hence, the time to sell is critical, especially when it comes to an asset that is depreciated.
“They want the money back in the bank so they can fund another,” Potter explained. “We are now able to take advantage of new technologies, products and services, all of which can be used to reduce the number of days on sale.
“For example, we have a number of customers who use our app-based assessment tool three or four weeks before the car’s contract is due to end, so they can start marketing before it’s used up. That will shorten the days. “