Going Once, Going Twice, Going Well? What Are Your Options When It Comes to Selling Fleet Vehicles?
Right, let's talk about something that keeps business owners and managers awake at night: getting rid of multiple vehicles without losing your shirt in the process. You’ve got a few options you can look at:
Sell Privately
Trade-In
Lease Company Buy-Back
Vehicle Wholesaler
Employee Purchase Plan
Tender Sales
National Auction Houses
1/ Sell Privately
A ‘brave’ decision, but is it a wise one?
Pros:
You will get closer to ‘retail’ prices. If you’re patient, you may get a better price.
More control over timing. Over when you put them on the market, not when prospective buyers darken your doorstep.
Cons:
Might leave you with difficult-to-sell vehicles. If the vehicle(s) are unusual in any way (make/model/fit-out) then the broader market appeal will be limited.
Time intensive: VERY time intensive; don’t you have a business to run?
2/ Trade-In
Very convenient, but convenience comes at a price.
Pros:
Dead Easy. Simple transaction, you bring in the keys, you sign the paperwork.
No condition disputes. The dealer knows the condition of the vehicle.
Minimal vehicle preparation required. Vehicles should be presentable but there’s no need to go overboard on detailing. The dealership has the experts at doing that, and at a lower cost then what you could probably do.
Provides more leverage for negotiating fleet discounts on new vehicles.
Great for cashflow: Minimises the time-lag between sale of old vehicles and purchase of new ones.
Cons:
Prices may be lower than the open market.
3/ Lease Company Buy-Back
“We'll buy these vehicles from you at a price we determine, saving you the hassle of disposal."
Sounds reasonable, right? Sometimes it is, sometimes it definitely isn't.
Pro’s:
Simplicity that money can’t buy (or can it?) One phone call, minimal paperwork, vehicles gone. You don't have to think about auctions, private sales, condition reports, or any of the usual disposal headaches
Guaranteed sale, no market risk. You know exactly what you're getting, when you're getting it, and there's no risk of vehicles not selling or market conditions tanking.
Minimises condition disputes: The lease company already knows these vehicles intimately because they've been managing the maintenance, they know the history, they understand the condition. But you still might get slugged with Unfair Wear and Tear charges (UFWT).
Minimal vehicle preparation required. You won’t (necessarily) have to go through the significantly time-consuming hassle of detailing and taking photos of all the vehicles.
Immediate Cashflow. Payment is usually processed quickly, often within days rather than the weeks or months it might take to sell vehicles through other channels.
Relationship benefits: ‘Playing nicely’ with your lease company on buy-backs might give you better terms on future leases or more flexibility on other matters.
Cons:
Below market pricing; often significantly, and to be fair there’s good reason for that. They’re accepting the second-hand vehicle market risk at the end of the lease, and they’re not running a charity - they need to set their buy-back pricing at a level that allows them to profit on resale.
Limited transparency: It’s a mystery box! You’ll rarely get detailed explanations of how buy-back prices are calculated. Is it based on current market values? Trade prices? Their internal targets? That’s their proprietary information.
No negotiating power: The lease company sets the price. You can take it or leave it, but you can’t negotiate. This hurts you if your vehicles are in better condition than average, or the second-hand market is strong.
Pressure tactics: Some lease companies use urgency to push you toward accepting buy-back rather than exploring other options.
Trust factor: See all of the above!
4/ Vehicle Wholesalers
Not a bad way to sell a lot of vehicles quickly. However, you may need a panel of 4 or 5 of make sure you’re not getting mugged on price.
Pros
Speed of sale. The sales process can be executed within weeks, not months.
Efficiency. The Wholesaler can buy your all of the vehicles that you want to dispose of.
Little, if any, vehicle preparation expenses. They buy as-is.
Cons
Time-consuming vehicle condition report preparation. Whilst they buy ‘as-is”, it can chew up a lot of your time arranging vehicle condition reports for them: photos etc.
Limited negotiating power: Wholesalers usually make take-it-or-leave-it offers.
They have the information advantage. They know the current market values better than you do and will (quite understandably) use this information to their advantage.
Price. If the second-hand vehicle market is strong then you may be leaving a significant dollars on the table.
5/ Employee Purchase Plan
A lot of positives to this. Useful as part of a hybrid sales strategy as not all employees will participate.
Pros:
Fair price. If set reasonably then it’s a win-win. Your employee can buy at below the retail price, you can sell at above the wholesale price.
Time efficient. Assuming that the employee is buying the car that they have been driving then they know the vehicle. This means you don’t have to spend time of generating condition reports.
Driver behaviour. When an employee knows that the vehicle they’re in could one day be theirs (or bought for family member), than they’re more likely to care for and drive it more responsibly.
Cons:
Multiple price negotiations, unless you can establish a fair and and consistent pricing mechanism that’s generally accepted.
Multiple payments and collections. This means a lot more red-tape to work through. Doable, but it chews up time.
Internal friction / resentment. Perceptions (or reality) of internal favouritism as to who gets to buy the vehicle; unless you’ve restricted employee purchases to the one person allocated to that vehicle.
6/ Tender Sales
Essentially a private auction where you invite specific buyers to submit sealed bids for your vehicles, either individually or as a complete package.
The envelope’s opened…and the winner is?
Pros:
Good for selling specialised vehicles, finding an audience that understands and appreciates them.
Competitive tension; buyers know they’re competing but can’t see what others are bidding so they may place a more aggressive bid.
Timing Control; you set the inspection times, bid deadlines and sales conditions.
Simplified administration; one buyer, one contract, one collection
Cons:
Intensive document preparation; a lot of work is involved in preparing detailed documentation, clear terms and conditions. and formal evaluation procedures.
Professional buyers have the information advantage. It’s harder for you to gauge the market and set appropriate reserve prices. Whereas the professional buyers will know the market better and set their bids accordingly.
Binary results, tenders usually tend to either work brilliantly or fail spectacularly.
Sunk costs, if the tender fails you’ve spent a lot of time and energy for no benefit.
7. National Auctions
To be clear, I’
Pros:
Speed. You can move your vehicles very quickly via national auctions.
Efficiency. Saving you a lot of time, most auction houses have very streamlined paperwork processes.
Vehicle transportation. Most auction houses will be able to arrange transportation for you.
Vehicle preparation. Saving you a lot of admin time, most vehicle auction houses will have in-house vehicle detailing services.
Reporting: Most vehicle auction houses will be able to provide you with detailed Unfair Wear & Tear (UFWT) reports. Helpful for understanding where to set the reserve by vehicle, and at a higher level you can build a picture of your internal culture of vehicle care across departments.
Information advantage. Most auction houses will be able to provide you with market intel that will help you set a realistic resource price. There are multiple different national auctions going on across Australia, a quality auction houses can lot your vehicles into the ones that they think will deliver the best sales price.
Price: Whilst you’re unlikely to achieve ‘retail’ prices, the deep market and mix of both professional and individual buyers generally translates into a competitive bidding.
Cons:
There are costs involved; fees and commissions. Service comes at a price.
Problematic if the market is weak. If there’s a glut of vehicles on the market then this oversupply will affect your price outcome and/or the time it takes (number of auctions) for your vehicle(s) to sell.
What's your experience with fleet disposals? Have you tried auctions, or are you still wrestling with the decision? What worked, what didn't, and what would you do differently next time? Share your war stories in the comments – we're all learning together.