“While a variety of approaches are employed, the major leasing companies across Europe have a common strategic view when it comes to remarketing their end-of-lease cars," says Peter Dietrich.

“There is a strong requirement for a clear audit trail to meet both the needs of the business and the appropriate tax regulations in the markets they are operating in. And there is a clear understanding that the remarketing choices made for their de-fleeted vehicles play a significant role when it comes to setting front end leasing rates and managing in-lease-costs. It is a hugely competitive industry where small margins across large volumes can have a substantial effect on the company bottom line and overall profitability.”

Once an asset is not ‘working’ and earning money for the lessor, there is the potential for holding costs that will nibble away at the profit that vehicle has made over its two or three year working lifespan.

Dietrich comments, “Time is of the essence and working capital is increasingly important, so there is a strong desire to minimise and streamline the processes from the lease-end position to vehicles being sold and funds back on the company bottom line. There is a drive to prevent additional expenditure – the often invisible holding costs – after the lease-end, so reducing storage requirements, avoiding the need for double-inspections and keeping transport costs to the minimum are increasingly important.”

“With this in mind there is a strong focus on online and digital platforms to shorten the selling cycle and reduce these holding costs. Many leasing operators develop their own remarketing online-platforms and set up their own ‘Cross-Border’ departments (or even separate companies) to manage elements of the remarketing function, often in partnership with existing remarketing specialists such as BCA. Success in these endeavours requires the specialist volume buying power to ensure a steady churn of used vehicles.”

“There is also a move towards multi-platform selling with ‘simultaneous bidding’ – where leasing-companies share vehicle sales data with several suppliers at one time to achieve the best price or quickest sale for fixed price vehicles,” he adds.

“A similar strategy may be employed by leasing companies working with specific remarketing partners, offering vehicles in multiple channels – fixed price ‘buy it now’, online and physical auction, for example – to ensure a swift sale.”

Dietrich sees a variety of approaches from leasing companies across Europe, but all with a similar goal to sell vehicles for the best possible price in the shortest possible time. He added: “Some leasing companies have a 100% B2B ‘sold and gone’ strategy, whereas others introduce an element of ‘retailing’ certain high-demand stock direct to consumers through outlet centres. It’s the balance of risk and reward – the benefit of the typically higher retail price against a potentially longer time to sale, the need for trade ins and the added post-sale responsibilities of warranties and after-care.”

As well as a comprehensive Europe-wide remarketing programme for the leasing industry, BCA offers complementary services for outlet centres serving the sector, providing valuation and appraisal services for the trade-in and handling the remarketing of the trade-in vehicle where appropriate. BCA also offer platforms to sell non-runners and total loss vehicles for those leasing companies that self-insure, reaching the specialised buyer base for these vehicles.

Dietrich concluded: “The critical activity for the lessor is to sell a valuable asset at the end of its first working life and then put that capital back to work for the benefit of the business. This is how the long-established partnership between the leasing industry and the remarketing sector was founded – the combination of the need to sell large volumes of vehicles and the channels and buyers that want to buy them.”