Auction block
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Knowing how to get the best out of truck auctions presents a tricky problem for both buyer and seller. Here, an industry insider brings the hammer down on when to sell and how to buy.
The market in trucks, whether new or used, has been flat for years. The market for used commercials tends to follow new truck sales, and the latest figures show that sales of new vehicles over 3.5 tonnes fell 4% last year, from 52,263 to 50,153. One manufacturer is said to have 400 units still unsold while a model due to replace them waits in the wings.
Early last year, one vehicle disposal manager was being bid a paltry £2-2.500 on Volvo tractive units from specialist traders dealing with the export market On good advice, however, he held out until the Spring, when he got more than ,C4,000 per vehicle.
At one time fleet operators and local authorities generally regarded vehicles at the end of their operating lives as almost worthless: any profit they might make was seen as a bonus. Not any more. With the increasing importance of competitive tendering transport and distribution costs can be a crucial factor, leading to a heightened awareness of potential resale values. One consequence of this is that auctions have come into their own.
Not surprisingly, auctioneers are often the first to spot sales trends and can advise their customers accordingly. Throughout the period of the construction of the Second Severn Crossing, for example, ex-utility tippers were at a premium in the South-West.
Indeed, ex-utility and council vehicles continue to sell well as a lot of sub-contracting work is available through the growth of cable TV in many areas. Smart buyers can often be seen buying relevant vehicles at auction for
immediate leasing and this looks set to continue throughout 1997 as cable moves into street after street.
The moral is, vendors can maximise the residual value of their vehicles at auction— and buyers can find real bargains—if they know what they are doing and take the best advice. This is particularly important now that an increasing number of owner-drivers, smaller local authorities, and service companies are sourcing their trucks directly from auctions. These buyers are joining dealers, who snap up around 90% of all auction entries. Vehicles generally come from large fleet operators, utilities, local authorities, the MoD, finance repossessions. A fair sprinkling also come from the dealers themselves, who are disposing of vehicles bought at another auction or direct from a client to make a quick profit. Many dealers are also obliged to sell over-age stock which they have been unable to sell to retail buyers.
But what should the vendors bear in mind when offering their trucks to the market at auction? And how do buyers avoid buying a dud vehicle and ensure that they end up with a bargain? By following the steps outlined here you can minimise the risk. _I by Peter Harrison
Peter Harrison is commercial manager of tine CMA Group, which holds auctions of LGV:s, plant, and MoD equipment at Leeds. Gloucester and Middlesbrough.