Fleet chiefs in for auction shock

Aug 28 2008 David Whinyates

Fleet chiefs in for auction shock

FLEET managers are in for a nasty shock in the coming months. A glut of executive models including the BMW 5 Series and Audi A6 are set to be de-fleeted and a leading valuation expert expects auction prices for upmarket models to crash as a result.

HPI¿s Valuation Expert, Martin Keighley, believes fleet managers are putting too high a value on cars which are due for renewal at a time when the used car market remains volatile.

Though demand for low-mileage vehicles, between two and five years old, remains high, older, executive and ex-fleet models are becoming harder to shift. Retail demand continues to fall and next month¿s arrival of the 58 plate is unlikely to slow the decline.

The ex-fleet market is a concern, says Keighley. ¿Fleet managers are overvaluing their stock and subsequently many of these vehicles, often overpriced and out of condition are failing to shift at the auction hall.¿

An influx of executive models such as BMW 3, 5 and 7 Series and Audi A4 and A6 is also likely to cause problems. With large numbers expected to be de-fleeted towards the end of the year, the fall in values is expected to hit these models the hardest.

All this means providing accurate vehicle valuations is proving a harder science than for many years. Keighley comments: ¿Accurate vehicle valuation hasn¿t been so difficult for some 15-20 years. However today¿s market should be looked at as part of a normal cycle rather than an apocalypse.¿

Valuations have dropped across the board this month. Hardest hit are the `gas-guzzlers¿, including some of the bigger diesels. Vehicles in the proposed higher vehicle excise duty bands are also affected with most seeing a decline in value of, on average, around five per cent.

¿Doubts remain over the retrospective changes to vehicle excise duty which are adding to the nationwide lack of confidence. Clarification or an alternative plan may help sweep away some uncertainty,¿ adds Keighley.