THE PR IS RIG H
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Proper appraisal and evaluation systems will save you time and money when it comes to part-exchanging commercial vehicles. British Car Auctions has transferred its A&E skills from car to light commercials, so CM showed up to see if we'd make a good sales team.
Imagine you're a sales executive at an established commercial vehicle dealer. There are shiny new vehicles on the forecourt and all you need are customers keen to part-exchange and looking for a decent deal.
It's 12.35pm and you've just sent a fellow sales executive to the cafe over the road for fresh sandwiches and coffee. You can smell it from your desk. Joe Soap, local painter and decorator, comes in with a three-year-old panel van — low mileage, fairly clean, decal livery and decent specification.
The sandwiches arrive. Mr Soap only wants £4,500 part exchange and you offer £4,250. You shake hands, whisk through the paperwork and tuck into a coronation chicken on brown bread.
The following day, a workshop gives it a once-over and finds front-end damage hastily repaired with a half-decent spray job to cover its tracks, two illegal tyres, a failing clutch and oil leaking through the gasket. Repairs will cost up to £1,500.
It's an everyday story that highlights the importance of proper appraisal and evaluation (A&E) systems The dealer lost money on the part-exchange deal and the sales executive in question sought alternative employment before he was fired Alan Sugar-style.
While hands-on experience is priceless, so is training. British Car Auctions has previously offered its A&F, skills to the car network, but now it is shifting emphasis to the commercial vehicle world. Its two-day training course, Part-Exchange Appraisal Training, is free and offers dealers a broad look at the A&E process. It is designed to help the CV market help itself.
There are benefits for the auction houses too, as they want to sell lots at the first time of asking and buyers want to buy what is on offer. So why, in the words of UK dealer training manager Les Butler."would you blow your brains out" on a part-exchange deal'?
Part of the problem is lack of experience, with only the in-at-the-deep-end process in place to learn the ropes. Laziness could be another part, but with money such a fashionable topic, getting the process right is in everyone's best interests.
BCA's two-day course was condensed into two hours for the benefit of CM's Julian Milnes, Colin Barnett and Kevin Swallow, as well as CA P's editor of light commercials David Hides and Royal Mail national vehicle sales manager Annessa I ehane. "The start of 2006 looked promising, with positive sentiment throughout the trade. During this period, auction sales were well attended and the majority reported healthy conversion rates.This trend continued throughout the first quarter and, despite high supply in some sectors, volumes on offer were readily absorbed with very competitive bidding for the best on offer.
"With a strong retail market, vehicles are sourced that require minimal preparation work. This offers a potentially quick turnaround sale, removing hassle for the dealer. With mainstream models, which are readily available, substandard examples that require extensive reconditioning work are often unwanted and make repeat visits to the rostrum.
-Many dealers report that damage rectification costs are rising rapidly, and in some cases spiralling out of control. For disposers this represents an opportunity to maximise returns by clamping down on return conditions, or rectifying excess wear and tear before disposal, provided the investment is not higher than the potential returns.
"Missing documentation can be extremely frustrating and often leaves dealers with a wait of between four and eight weeks before replacements arrive. It can also have a negative impact at the rostrum with even the nicest of examples. Enhanced values can be achieved by the inclusion of extras such as air conditioning, metallic paint, ply lining and side loading doors.
"Specialist types, typically mess vehicles', which have been converted from the standard specification, often struggle to find a home, Invariably the reason behind this is that the market for this type of vehicle is small.This leads to a tendency to purchase new rather than used. If only a few of the above points are acted upon, the benefits in enhanced returns would far outweigh any perceived hardship in their implementation."
AND THE WINNER IS...
CM's attempt to value the nine vehicles on offer was curtailed by time and some obvious dents and legalities. In particular, a heavily tinted front window on one vehicle wasn't picked up.
In the end all our prices were optimistic, going against the trend for sales teams which are normally too afraid to spend over the odds, Annessa Lehane and David Fikles picked up the most correct prices, but overall the winner and just i500 over the actual cost at auction was our own Julian Milnes. •