Black Book's recent launched Commercail Value Xpress product provides fleet managers with a realiable source to benchmark their independent fleet vehicle resale averages to the national average.
To compile this information, the provider of wholesale pricing guidebooks, based in Gainesville, Ga., was given an initial statistical sample of more than 500,000 vehicles from the nation's major fleet remarketers.
"We developed an algorithm that compared our weekly numbers to the average commercial vehicle based on mileage, region, trim level, and several other critical factors. Based on the results of running that algorithm, we are able to determine which of our weekly numbers works best for a particular commercail vehicle," said Tom Cross, Black Book senior VP and GM.
100% Commercial Value Index
Black Book's algorithm helped to establish a commercial value benchmark index, set at 100 percent. "If you're a remarketer and you're coming in at 101 percent of the index, your vehicles sell at 1-percent more than the industry average. If you're at 98 percent, you're selling at 2-percent below the industry average," said Cross.
Black Book provides individual values for all segments of the used-vehicle industry based on region, make, model, year, trim level, VIN, mileage, and universal vehicle code (UVC) - a three-digit code provided to Black Book customers.
If you're using raw data from an auction, it's only as good as the information you're provided. If you only have a vehicle's VIN, it will only get you down to the model level. The spread within a model can be $5,000-$6,000, depending on whether it's a base or higher model," explained Cross. "Our UVC code actuall brings you down to the trim level, which elimiantes that disparity.
How to Subscribe
Companies that have licensed Black Book's Commercial Values include GE Commercial Finance Fleet Services, Automotive Resources International (ARI), and PHH Arval. The index, updated on a weekly basis, provides data on light trucks, SUVs, vans, and passenger cars. The service produces current and historical information regarding vehicle resale values. Individual subscribtions to the Commercial Value Xpress product are available through Black Book's Web site: www.blackbookusa.com.
Black Book's Commercial Vehicle Data is also available in the following formats:
- Licensed database to remarketers and large fleets to incorporate into their software.
- HTML and XML portal solutions.
- Unattended analysis - programtically assigns the commercial vehicle values to vehicle portfolios uploaded by the user.
Benchmark Against Industry Values
Black Book constantly analyzes the index to make sure it is appropriate to the industry, according to Ricky Beggs, VP and managing editor. “We double-check our algorithm against the index to ensure that our index is relevant. Remarketers can tell whether they’re doing better or worse than the industry average,” said Beggs.
Some fleet management companies will use their standing at 101 or 102 percent of the industry to obtain more business, said Beggs. Those at 98 percent of the industry may explain that they tend to hold vehicles longer or their clients drive more miles per year. Excluding those circumstances, the average fleet car at any given year, model, or make, should be at 100 percent, based on Black Book’s algorithm, explained Cross.
“It all starts with a sound value that we established based on auction prices,” said Cross. “We physically attend auctions across the U.S. every week and classify sold vehicles into one of four conditions: average, rough, clean, or extra clean. We note the mileage, auction conditions at the time of sale, and anything else that could positively or negatively affect pricing. All this information is entered into our proprietary database.
“Our numbers are very accurate, this isn’t a stab in the dark. It’s not something that’s published every month or so, it’s published weekly and looked at constantly. As such, as a remarketer, if you’re not at 100 percent, this service helps determine why,” said Cross.
Focusing on Improvement
Demand for benchmarking fleet vehicle resale values is increasing, according to Cross. “We worked with the largest remarketing companies, so we have a rich database to learn from and to balance our algorithm against to ensure accuracy and constant improvement.”
Black Book programs its index to double-check itself for accuracy. As more clients begin to incorporate the UVC, Black Book’s data will become even more accurate, according to Cross.
Black Book also sets up turnkey services for fleets, explaining how a fleet’s portfolio stacks up against the industry. “Fleets can make us their one-stop shop for not only valuing their portfolio, but also continually generating reports for them so they can better manage their portfolio,” explained Cross.