LeasePlan manages some 1.42m multi‐brand vehicles in 32 countries and these numbers lead to 1,000 cars a day being remarketed in Europe alone. So says Wolfgang E Reinhold, senior vice‐president, car remarketing and procurement operations.

Any company handling that level of volume has to have a sophisticated remarketing operation and that is precisely what LeasePlan has set up.

Single remarketing platform

“We have established a single in‐house world‐wide platform that we control ourselves and we dispose of vehicles by means of online auctions,” Reinhold says. “That way we know we get the best price – the highest price wins – and the process is a transparent one. In my view electronic auctions are the way to go. They represent the future.”

The bidders for LeasePlan vehicles tend to be independent dealers who have registered with the platform after being checked for, among other things, their VAT number.

However, just because a dealer is based in a particular country does not necessarily mean that the car will ultimately be sold to a retail buyer who lives there.

“70‐80% of the cars we sell in Belgium for example leave that country 5 to 8 days later,” says Reinhold. Ex‐LeasePlan cars can ultimately end up in countries all over Europe – mainly in the east and south‐east – as well as in countries such as Israel or further east.

“In central Europe, stock is often sent to neighbouring countries where the used market is more established and where they can achieve higher prices,” says Nuno Castel‐Branco, Cox Automotive’s regional managing director for Europe, Turkey, Brazil and Thailand.

Cross-border taxes

Getting vehicles re‐registered is not usually that difficult but taxes may be imposed in some countries. “That is the case in Denmark and Portugal for example while Algeria has in effect become a closed market because of the high import tax,” Reinhold says.

Looking further afield, the variety of different local taxes levied by states in India can make de‐registering a car in one state and re‐registering it in another a complicated exercise,” he says.

LeasePlan stores cars that are being disposed of in a number of big compounds dotted around Europe. Once they are sold dealers either collect them themselves or delivery can be arranged for a fee.

While the majority of LeasePlan’s European vehicles go through an online auction, around 20% are retailed by the company through its own outlets. “We have 13 of them trading under various names in countries such as France, Italy, Spain, the Netherlands and the Czech Republic,” Reinhold says.

ALD International operates retail outlets in a number of European countries including Germany and France, says deputy chief executive officer, Tim Albertsen. “Our retail activities account for around 20% of the vehicles we remarket and we sometimes sell cars to the people who are currently driving them,” he explains.

“The other 80% or so are wholesaled to dealers primarily through ALD Carmarket, an electronic platform,” he adds.

“Usually this is done by means of auction but other mechanisms are used too. In France, for example, we use a tendering process because you need a licence to run an auction,” he says.

“The commission in France is dictated by legislation,” adds Castel‐Branco. “Auctions can operate more flexibly in other markets.”

Returns policy

LeasePlan does not refurbish its cars prior to offering them for sale because it has found that it is not cost‐effective to do so. What it does have however are clear return conditions, which ensure that the majority of lessees bring their cars back in a presentable state.

“Every lessee receives a copy of our fair wear and tear guidelines in advance of acquiring their vehicles,” Reinhold explains. “They include for example an assurance that any small dent that can be covered by a 1 euro coin will not be charged for.”

Cars are independently inspected by either DEKRA or SGS on their return to ensure accurate reports and realistic photography. If there is any severe damage then customers are informed and told how much they will be charged to get it repaired.

“The secret of our success is our transparency,” he says.

Only a handful of the cars LeasePlan handles are subject to manufacturer buy‐backs. “Tesla for example has a buyback arrangement with us but we’re talking in terms of 30 or 40 vehicles,” Reinhold remarks.

Online or physical auction?

Outside Europe the disposal process is often different because the markets concerned have yet to attune themselves to online auctioneering. “In the USA, Australia and New Zealand for example we use conventional auctions,” he says.

None of this of course should be taken to imply that online management and disposal of ex‐lease vehicles is unknown outside Europe because that is very far from the case.

In April, for example, Porsche Cars North America (PCNA) inked a deal with Cox Automotive to use its Actuos platform to manage the return of cars from the lessee to the lessor and their remarketing. It captures information on the car’s condition, makes it easier for it to be bought by the dealer or customer and enables the entire process to be integrated with the services offered by the auction companies. An online portal allows sales to be made to any defined group of users.

“Providing us with access to the entire lifecycle of our vehicle portfolio will enable us to make better decisions in the future,” says PCNA remarketing manager, Jim Kuna. “We will be better equipped to channel the right vehicles to the right dealers at the right time.”

Actuos comes from Cox’s RMS Automotive division, which made its debut in the USA this year with commitments from Nissan and BMW Financial Services as well as PCNA. Having already processed over 1m vehicles for manufacturers such as Volkswagen, PSA and BMW in Europe to date – including upwards of 100,000 for PSA – it has won a Fleet World award for Innovation: Fleet World is the sister title to International Fleet World.

Perhaps not surprisingly, Autorola chief executive officer, Peter Grøftehauge (left), believes that the online remarketing of exfleet cars will ultimately render physical auctions obsolete. “They’re old‐fashioned,” he contends. “They represent the past.” Based in Denmark, the company disposes of some

220,000 vehicles annually – “and the number is increasing,” Grøftehauge says – through its online platform to buyers in over 35 countries.

It lists Arval, Alphabet, ALD Automotive and LeasePlan among its regular users: evidence that independent suppliers still have a role to play working alongside lessors who may have in‐house online remarketing channels.

Online auctions go global

Most of the countries Autorola is active in are European.

“However, we have a presence in other markets including Australia and Brazil and we are looking to expand our global activities,” he says.

Autorola keeps a close eye on marketplace trends.

“One thing we have noticed is that Spain, Portugal and Italy are no longer exporting used cars to the rest of Europe to the extent they were a few years back,” he reports. “That’s because second‐hand vehicles are fetching better prices in their domestic markets as their economies have improved.”

“The used market in most of southern Europe is pretty good right now,” says ALD’s Albertsen.

Other global markets throw up their own challenges to remarketers however, he adds.

“China’s used market is not very mature, as ALD we can only sell to dealers and while the prices aren’t bad it’s difficult to get hold of the licence plates you need to put a car on the road, especially in Shanghai and Beijing,” he observes.

Aside from Fleet Monitor, which helps operators handle the whole de‐fleeting process, Autorola offers an online business intelligence tool called Indicata. It helps fleets gauge the general health of the used market and assess how much their cars are likely to fetch should they choose to dispose of them.

A somewhat different approach to remarketing is pursued by Hertz says Rui Ferreira. Vice‐president, Hertz Car Sales, he is responsible for remarketing the company’s vehicles in seven European countries.

“The rental business is my used car factory,” he remarks.

Direct sales

Physical and online auctions account for a mere 6% of the business’s total annual sales volume of around 45,000 vehicles with an average age of 18 months. “The percentage is declining yearon‐year,” he says.

Far more significant is the Hertz Dealer Direct online operation, which sells vehicles to registered small‐ to medium‐size used car dealers at a fixed, no haggling price. It accounts for over 20% of sales.

“Every car is independently inspected by DEKRA, any damage is disclosed and each vehicle offered is accompanied by photos, including photos of damage,” he says.

So how can Ferreira and his colleagues be sure they are getting the best possible price for Hertz’s cars? “We work closely with the major used price guides in each market and we co‐operate closely with EurotaxGlass in particular,” he replies.

A high percentage of Hertz’s volume is dealt with through its wholesale operation. Its customers include buyers from the big dealer groups who may want to purchase, say, 150 small hatchbacks at a time that they can then sell through their own channels; from dealership forecourts for example.

“It’s interesting to note that in some markets the customers want to come to our compounds and physically inspect the cars themselves,” says Ferreira. “That’s often the case in Italy for instance.”

Try before you buy

On the retail side Hertz has been rolling out an initiative, which enables consumers to test drive one of its cars for several days then buy it if they like it. If they decide the vehicle is not for them then they simply return it to the company and are charged a discounted rental rate for the period they have used it.

“It’s a service that’s available from 80% of our rental locations and 96% of people who use it end up buying the vehicle they try,” Ferreira says.

“Business‐to‐consumer sales account for 10% of what we do and that’s something we intend to grow,” he adds.

“We run one or two retail locations ourselves. In France we’ve got one in Paris and one in Nice and in the UK we’ve got one in Lancaster.”

Ferreira is also responsible for remarketing some 10,000 to 12,000 Hertz cars annually in Australia and New Zealand.

Buy‐back agreements have a role to play in Hertz’s entire remarketing mix but he believes they should be treated with caution. “The car manufacturers lay down tight age, mileage and condition parameters and that makes buy‐backs the most expensive option for us,” he says.

“We have a few manufacturer buy‐back arrangements but we need to achieve somewhat higher residuals than the manufacturers are prepared to offer,” says ALD’s Albertsen. “To be honest we’d rather take any risk on the residuals ourselves.”