At a recent NAFA Fleet Management Association meeting, PHH Arval remarketing manager said the current used vehicle market is strong, which opens the opportunity to reduce costs.
"It may be time to capitalize on today's strong resale values," said Tim McGee, PHH Arval Manager of Vehicle Remarketing and the meeting in Montreal. "Demand is strong, but supply is short, which creates an opportunity for fleets to sell their vehicles at a higher price and replace them with ones with less up-keep costs such as maintenance and fuel."
He recommended that fleets evaluate the opportunity to replace vehicles early – for example in the fall rather than next spring – by examining if:
- There is a vehicle that is a better fit for purpose or meets goals better;
- Maintenance costs would be reduced with a replacement vehicle; and
- The budget is available to make changes.
During his presentation, he also provided an overview of the current state of remarketing in Canada. In his presentation, McGee said "across the Canadian provinces remarketing volumes differ. For example, smaller cars have higher volume in the eastern region and in larger cities."
Additionally, McGee touched upon the used vehicle outlook, highlighting:
- There is a gradual return to normalized pricing for used vehicles.
- Current vehicle values and improved economic conditions are influencing replacement policy decisions.
- Increased maintenance and higher condition estimates are leading to reviews of extended replacement policies.
- The kilometers driven on a car influences value as much or more than its condition.
For additional information, see a recent PHH Arval webinar at http://bit.ly/PHHArvalRemarketing that looked at remarketing both in Canada and the United States.