My recent two days attending the 2012 Conference of Automotive Remarketing (CAR) again brought me a recurring realization. I know you can’t find time to “do everything,” that your company has a tight fist on traveling, and you’re busy doing what you do best.
Yes, the administrative burden with your fleet relies entirely on you and you get a personal satisfaction enjoying the selection and purchasing process. Nobody from the auction networks calls on you, the online people don’t take you to lunch, and the fleet wholesalers may not even leave a voicemail. More to the point, you probably don’t even know who your OEM remarketing director is.
See where this is going? Administratively, you have your routine tasks, but, if you honed your skills at monitoring your outsources, you aren’t going to get into trouble. With gasoline prices where they are, you’ve already done all you can with vehicle selection and everything connected to earning the best in mpg. Contrary to what many believe, purchasing is pretty well pegged by the OEMs as your volume buy basically dictates your discount range.
If you agree so far, you need to know, accept, and immerse yourself into the remarketing arena. First, accept the fact that while fuel costs are making a run for the title as the single most costly expense of vehicle ownership and resale retention rates have been relatively high for the past few years, depreciation still ranks ahead of all costs. And, that’s precisely where you can emerge as a hero with significant cost savings by your own hand.
AF’s own research identifying our readers’ main fleet responsibilities shows that 63 percent of fleet managers “manage” the remarketing of used units. This factor begs the question as to how resale is managed. Are you merely monitoring your FMC, who does it for you? Are you a public sector fleet where you run your trucks and cars literally into the ground before getting rid of them? Do you really know what your three-year-old car with 75,000 miles on the odometer is really worth? How do you know for sure the values of used cars sold to employees are what they should be?
I’ll tell you this. Guys like Jim McCarthy (Siemens) and Mike Bieger (ADP) are ahead of the pack. They attended every session at the CAR Conference. They networked with key people from auction, wholesaler, factory, and online firms who know what’s happening. They heard Bob Rauschenberg (ADESA) predict there’s only one more year of high residual prices for the used units. Rauschenberg says OEMs are the ones asking about how to best remarket the hybrid/alt-fuel vehicles (no one seems to know yet).
The NAFA Fleet Management Association conducted a survey in 2011 among 240 members who claim that 90 percent of them make the decision as to when to remarket the vehicles. While most utilize auctions, 23.8 percent sell to drivers, another 19.6 percent sell to other company employees, and 15.3 percent sell as trade-in vehicles to dealers.
Interestingly, NAFA has 13 members on its Education Steering Board and 19 members (many serve on both) on the Education Development Committee. Yet, with their base of vaunted “Eight Disciplines,” they do have “vehicle fuel management” (to their credit) as one of their core competencies. However, “remarketing” remains buried in one of the others.
I’d suggest to every fleet manager that you can learn how to cut big bucks in the depreciation area if you make it a priority. I have been guiding the focus on this segment of fleet management for decades, and I know attaining this skill pays off. Start networking with the key people who already make it an everyday assignment. You, too, can be a special kind of hero.