As economic conditions have worsened, business owners and fleet managers have been looking for new ways to cut costs. There are three different ways small fleet managers can meet that objective: online auctions, fleet remarketing specialists and Craigslist. The first two solutions reduce the days to sale and expenses associated with selling out-of-service vehicles. The third offers a simple interface and a retail-level transaction. All three are part of an online remarketing revolution that is changing how we buy and sell vehicles.
Small fleet solution: Tap into a large pool of buyers, access third-party services for accurate price listings and inspections and make a quick sale.
Each week, millions of buyers log on to online auction sites such as OPENLANE (www.openlane.com), GMAC's Smart Auction (www.smartauction.com) and Manheim's OVE.com. For fleet managers who want to reach a large pool of potential buyers, online auctions are a good option - especially when time is of the essence.
"You can sell the car and get the proceeds while the engine oil is still warm," says Steve Kapusta, director of operations for Smart Auction.
Auction sites also offer increasingly sophisticated tools to match your vehicles to up-to-the-minute values. OVE.com offers current Black Book and Manheim Market Report data online. Smart Auction offers a tool that allows a user to enter a VIN number and mileage to pull a vehicle sales history report.
Kapusta says his sellers set a list price and a "buy it now" price, but no reserve. "A lot of consignors put a vehicle out there for $10,000 and a 'buy it now' of $10,300 or $10,500," he says. "If your floor price is $10,000 and only one person bids on it for $10,000, it's sold. You can't put it on there for $8,000 when you want $10,000. First bid can buy it."
Listings are free, in most cases, but each site differs in fees charged to the seller or buyer when a deal is closed. Some are online only; others have evolved out of brick-and-mortar auctions. Most offer third-party services such as inspection and certification, which can minimize unexpected objections from buyers. That's especially important if you're taking your vehicles online to break into new markets.
Nagi Palle, vice president of analytics for OPENLANE, says his company offers sellers the option of ordering an inspection through the site or using their own service. "We've found that every seller has their own expectations," Palle says. "If they want to use the service of their choosing, we can accept data from just about any inspection company."
Units sold online don't incur the cost of transportation to an auction site - another major draw for fleet managers. And once a vehicle is sold, buyers have increasingly sophisticated shipping options. A number of providers have partnered directly with the auctions to bid for new business. The sites can display shipping quotes from competing transportation companies instantly. Transporters are becoming more sophisticated in the new marketplace, piecing together shipments from multiple sources and moving beyond their traditional range. This makes it economical for sellers to move smaller batches of cars to a greater number of locations, and farther away.
Sellers should be aware that this is still a wholesale transaction and is similar to a brick-and-mortar auction in regards to sale price. However, the transaction requires little work; the turnaround is quick and the fees surrounding the sale are minimal.
Small fleet solution: Use a custom site to sell out-of-service fleet vehicles to your own employees or outside buyers at a better-than-wholesale price.
Fleet managers can also turn to companies that provide customized online remarketing sites. They offer many of the same benefits as the auctions, and available services run the gamut from employee sales to dealership consignment. Technology now provides easy access to maintenance history, condition reports and vehicle photos, as well as online purchasing processes.
Once the domain of large fleets, fleet remarketing services are now accessible to small fleets as well. Ron Shoemaker, president of Flexco Fleet Services in Westerville, Ohio, says that his company tailors its services to each fleet, regardless of size.
"For all fleets, including small fleets, we facilitate employee sales," Shoemaker says. "If the driver declines, we outsource the condition report to a third-party vendor and place the vehicle on a proprietary Web site."
"There are several advantages to partnering with our company instead of putting your inventory on Craigslist or eBay," says Steve Bender, national corporate fleet remarketer for Largo, Fla.-based Fleet Street Remarketing.
Selling end-of-lease vehicles to drivers and other company employees minimizes days-to-sell, thereby reducing depreciation and eliminating downstream expenses such as auction costs. It also offers your workers a valued benefit.
Another benefit is limited liability to protect against potential negligent entrustment claims brought by a new buyer. This value is not offered on public auction sites.
"We protect the company selling the vehicle and the buyer, which is usually their employee," Shoemaker says. "We take liability and exposure out of the equation wherever possible."
Like the major online auctions, established remarketing firms have gained experience in working with all manner of businesses and vehicles. That includes fleets comprised of upfitted work trucks and vehicles in public-sector work.
At Flexco, Shoemaker has launched a program geared toward fleets looking to add quality used vehicles.
"Many small companies simply don't have the budget to buy new," he says. "Our 'Refleeting' program is a concierge service that can find good used vehicles for fleets and even specialty vehicles for short-term projects."
Small fleet solution: Take the do-it-yourself approach to sell vehicles at a near-retail price with no fees.
Founded in 1995, Craigslist.org grew from a small, San Francisco Bay Area events guide to the world's largest-volume source of classified ads. Vehicle listings are free, and the site charges neither the seller nor the buyer at any point in the transaction.
The tradeoff? Sellers have to handle email and phone inquiries personally, and Craigslist is nowhere near the quickest way to sell any vehicle. These points seem to be acceptable to many business owners, however, as hundreds of commercial auto sales transactions are initiated on Craigslist daily.
Time is not the most important factor for veteran hotelier Larry Hall. Based in San Diego, Hall currently owns and operates six hotels in five states and uses Craigslist to remarket his out-of-service utility vehicles and tow trucks. Whether selling hotels or vehicles, he prefers to run a "Dutch" auction.
"I research similar vehicles for sale and set my asking price higher than the others," Hall says. "Then, each week, I knock it down until the vehicle sells. I advertise the fact that I'm doing this right in the description. The concept has been around for 500 years, but it still works."
Hall's most recent listing was a 2004 Ford E-350 cargo van upfitted with a Knapheide utility body. He first listed it well above the closest value he could find online, noting that it would be reduced by $250 every week until it sold. His description also spared no details relating to performance, appearance, options or cargo and towing capacity.
"I value my time, and I value the prospective buyers' time," Hall says. "My advice is, don't leave anything out."
Sidebar: Tips for Selling on Craigslist
In spite of its plain and limiting interface, Craigslist sells thousands of vehicles daily, including those sold by small businesses. Follow these tips to cut through the clutter and manage a safe transaction.
- For the busy seller, posting services such as PostShark.com will get around re-posting frequency restrictions and can post more photos and larger photos than Craigslist allows and even filters spam and scam replies to your ad. Cost is $3 to $19.95 depending on level of service.
- To research other car sales postings, Craigslist offers an RSS feed, which will bring specific matches to your desktop (i.e. "Ford F-150 in Tulsa"). Note that Craigslist RSS feeds "are for your personal use only, and are not available for commercial use without first obtaining a license from Craigslist.
- Craigscounter (craigscounter.com) gathers data about your ad's visitors to show you how effective your ad is. This includes live maps of visitor locations, number of unique hits and text-based data and features that allow you to search for competitors based on a search term and a minimum or maximum price.
- Verify the buyer's street address and phone number. Be wary of buyers willing to purchase your car sight-unseen, as well as buyers located overseas.
- Do not transfer title until you have payment in hand at the agreed upon price.
- Before you deposit a certified check, verify authenticity with the issuing bank and that it will guarantee payment on the check.
- Be suspicious of a buyer who proposes making payment through a friend or agent of the buyer. Don't agree to a plan where the buyer asks to send a check for more than the sale price and requests that the seller refund the difference.
- To avoid being responsible for the new owner's tickets or accidents, attach a release of liability form to the pink slip. Fill it out with the new owner's information and mail it into your DMV.
- Though shipping vehicles is a common part of online auctions, it is a common scam on Craigslist. Do not offer to arrange shipping - you will spook your buyer.
Listing and Selling
- If you've got the time, price the vehicle about 10 percent above its value to give you "haggle room." If you're in a hurry, price it 5 percent less than book value. Use guidebooks (KBB, Edmunds) to peg the "private party value" of your vehicle.
- Be as specific as possible in title and description. List features in detail, but don't be afraid to list all the vehicle's defects. Title should include year and make.
- Do put your phone number in the ad. You want to avoid casual inquiries, but for a serious buyer, email is too slow. By the time you respond they may be on to the next car - and you've wasted time typing an e-mail.
- Photos: The more photos the better; one way to get around the four-photo limit is to link to photo hosting sites such as Imageshack.us, Flickr or Photobucket. Take photos during the day but not in bright sunlight.
- If you're asked to drive the vehicle to them, it changes the power dynamics of the sale. Wait until they have time to come to you.
- Modify and repost your ad every two to three days.This is essential, as hundreds of vehicles are posted daily. The further down the list, the further your ad gets lost in the pile. If you're short on time, use a service such as craigslist-poster.com. For a small fee, they'll repost your ad as frequently as you want.