F&I Management & Training

"The current instability in the rental market makes it a difficult time to step away from predictable buy-back deals in favour of risky retail sales, even if they are more profitable."

Budget Rent-a-Car has started selling cars to the public and dealers directly through its rental sites.

 
With the fleet industry looking to spread risk by using multiple sales channels to sell on defleeted vehicles, many will follow this experiment with interest. 

Budget is to sell a selection of 2008-plate Ford Focuses and Fiestas to the public from six of its airport locations at Heathrow, Gatwick, Edinburgh, Glasgow, Birmingham and Manchester.

It will offer the cars at a no-haggle fixed price and has around 250 ex-rental vehicles available to purchase.

The cars can also be viewed through its website at   www.budget.co.uk/carsales.

The vehicles are available to trade and retail customers and average seven to nine months old with mileage between 11,000 and 15,000.

However, Budget will not take part-exchange vehicles. Customers will have to sell their cars – as well as arrange finance/loans – in advance.

Like the rest of the industry, the majority of the Budget fleet is acquired on buy-back agreements with the car and van manufacturers.

However, Des McCann, director UK network and operations, said: “This year we have also taken a small volume of vehicles which we will sell on the open market. 

This has given us the flexibility to manage the holding period of the cars to best match the demands of our customers throughout the year.”

McCann said the project could be expanded if it proved successful: “We are running the ex-rental car sales operation as a trial with a set number of vehicles available to purchase. 

“If it is deemed successful and customer feedback is positive, we will consider signing further deals that will allow us to sell more ex-rental vehicles in the future.”

However, there are a number of obstacles that may work to prevent this becoming a major sales channel for any rental firm. 

The current instability in the rental market makes it a difficult time to step away from predictable buy-back deals in favour of risky retail sales, even if they are more profitable.

The cost of setting up such a network would also be prohibitive: the acreage needed for a used car sales operation is not available at most rental locations, while a nationwide team of remarketing experts would be needed to price and sell cars. 

For the moment, this form of remarketing is an interesting niche, but unlikely to see massive expansion.

DATED: 14.11.08

FEED: AM