For years, I have worked with many dealerships and dealer groups in disposal of used-car inventory that has overstayed its welcome.
I've also worked with manufacturers and rental car companies in disposing of fleet units.
I am writing this column because of the need to educate the new generation of remarketers who are responsible for handling fleets. Some members of the computer generation may misunderstand the primary objective in the first place.
The goal of such remarketing simply is to liquidate a large sum of capital at as close to a profit as possible. Failing that, minimize the loss as much as possible.
Here are three basic steps:
When you are given a portfolio, the most important number is the total value of the vehicles.
All those units have to be accounted for, more than just on paper. A real remarketer has looked at and understands the condition of these vehicles and has done selected visual inspections to get an idea of what it will cost to get these vehicles ready for sale.
Step 1 is a vital link for being successful. Nobody can look at $10 million worth of cars and open the hood on each one, but 20 random inspections will give you a good idea of the average miles, the average condition, and what reconditioning they will need.
- Align your disposal method.
Nice dinners, golf shirts and hats are great, but when you pick your auction source, or whatever source you think necessary, to dispose of these vehicles you need to streamline the cost process of putting these vehicles up for sale.
There are many ways to reduce costs. Look into competitive freight. Cut a deal with a battery company, a tire company. Sit down with the auction and have them tell you exactly what they are doing for your reconditioning dollars. Then go through the detail barn, the area of an auction where these vehicles are cosmetically prepared for sale.
- Know the numbers.
You now have a realistic goal to convey to your boss or client. It is not “pie in the sky” but for real, representing today's current values. All determining factors have been considered.
When the time comes for you to pull the trigger, it doesn't take miles of red tape and 40 phone calls to make a decision.
The three steps are extremely simple and, when understood, allow for orderly remarketing.
When I would have a conversation with a remarketer about disposing of a certain model, brand or a whole fleet, we cut right to the chase because I did my homework.
So, put on your jeans. Get out there and look at the fleet units. Go through the barn. Get on the block.
If you do a good job on remarketing, I promise you will move up the ladder. Good luck.
Tim Deese is a used-car expert and heads Progresssive Basics Inc.