2023 Remarketing Trends: Changing Times

There is some good news for work truck fleet managers, and it has to do with resale.

“The work truck used resale market has continued to be strong and will likely remain so for some time. In recent years, due to global and economic factors, many manufacturers have been forced to produce fewer vehicles due to ongoing supply chain constraints,” said Jeff Krogen, vice president of Fleet Strategy at Enterprise Fleet Management. “Because of this, they supplied their dealer networks with pickups that were more retail-oriented due to higher equipment levels, positioning them for retail sales and limited availability to fleets by allocating fewer trucks than demand warranted.”

Used prices have remained strong for most fleet vehicles, particularly work trucks and cargo vans. But things are starting to shift.

“As the available supply of new vehicles has increased in recent months, creating an increased turnover of used vehicles for remarketing, we have seen prices come down, especially for higher mileage vehicles,” Krogen added.

He noted that buyers now have more options than in recent years and are more willing to wait for used trucks below 100,000 miles if they can.

The experts at Black Book agree that a change is starting.

“Commercial vehicle values continue a downward path due to a mixture of increasing inventory and stalling demand. Remarketing efforts have increased over the past 45 days as we’ve noticed a large increase in auction inventory and wholesale and retail transactions.  The commercial market has been saturated with three- to five-year-old units with above average miles, adding even more downward pressure to an already weak market,” said Josh Giles, principal automotive analyst at Black Book.

FLD also sees some challenges, specifically related to vehicle quality.

“The biggest trend we see is that lower-quality assets increasingly define the market as what’s left of the ‘good stuff’ gets sold and fewer new vehicles are coming into the marketplace,” said Bill Bishop, SVP of sales and marketing for FLD, Inc.

It's no secret fleets are holding assets as long as they can, given diminished vehicle allocations over the past few years.

“Right now, we are seeing a lot of wrecked, challenged, or high-mileage units. If your asset is none of these things, your ROI can be spectacular, but more and more, we’re not even seeing middle-of-the-road stuff make its way into the market,” Bishop added.

Given this scenario, Bishop advised if fleets have quality vehicles that are not critical, “sell them now as it’s likely the environment for selling these kind of quality assets at a premium will never be better.”

Looking specifically at equipment, the story doesn’t get any rosier.

“The market has turned from a seller’s market in late 2021/early 2022, when our internal data showed high competition amongst buyers, to a buyer’s market for most of this year. We have seen more equipment hit the market in the first three quarters of 2023 than in 2021 or 2022. And with a greater supply – we see falling prices. The good news is someone out there is looking to upgrade their equipment,” said Rob Slavin, senior valuation analyst at Ritchie Bros., an RB Global Company.

Looking ahead, however, there are some positive changes on the horizon.

“Everything is still affected somewhat by what’s happened since the pandemic, and there’s no doubt the work truck remarketing space is still in flux. Overall, things are far more stable than they were 12 months ago and even 12 months before,” Bishop added.

Technology & Remarketing Trucks Today

Technology has been making a huge impact on fleets looking to ensure they get the highest proceeds for their used vehicles.

One new technology-driven remarketing breakthrough noted by Fleet Street is CarVantedge.com. Owned by longtime industry remarketing company Fleet Street Remarketing, CarVantedge is an online, direct-to-consumer website that sells expertly maintained, end-of-lease fleet vehicles to consumers nationwide.

The site is like retail websites such as CarMax that sell used vehicles to consumers.

According to Fleet Street President and Owner Steve Bender, CarVantedge offers a "rare win/win because it helps fleet customers sell end-of-lease assets quickly to a wider audience and for higher returns than traditional remarketing channels like auctions or dealers."

FLD has focused on technology since starting its in-house tech group in 1995.

“The group developed the industry’s first online condition report in 1997. Over the years, we’ve updated it several times, and today, it is our free OVRView app. This solution lets fleets – and as few as just one employee – manage the entire remarketing process in real-time on any device, anytime, anywhere convenient for them,” noted Bishop of FLD, Inc.

The app has saved FLD customers time, money, and resources because they don’t have to have multiple people working on remarketing.

“One person can handle it all. It lets customers do everything from assigning vehicles to approving quotes to even getting paid,” Bishop said.

The advancement of technology continues to play an important role in work truck remarketing.

“The ability to analyze specific equipment and series levels and how they retain their value is very valuable when evaluating vehicle purchases. Improved analytics is also helpful when addressing the optimization of the term based on all factors within a total cost of ownership model,” said Krogen of Enterprise Fleet Management. 

But, when it comes to a fleet plan, Krogen can’t convey the importance enough of not establishing a plan only to “set it and forget it.” 

“It is so valuable for fleet managers to review their cycle terms regularly. At a minimum, every vehicle in the fleet should be reviewed once a year with a complete TCO and term analysis, but as the market changes, it is required to be reviewed much more frequently,” Krogen recommended. 

Technology and tools make analysis work much easier today.

“Remarketers now have plenty of data and tools to determine the optimal time and location to sell their vehicles. Data on the resale side helps tremendously and is another tool for remarketers to make data-driven decisions. It is also incredibly helpful to factor in geographic location and which areas may be optimal for specific models and series levels, based on industry and vehicle capabilities,” Krogen added.

What about cab configurations, wheelbases, roof heights, and vehicle colors? These can also vary based on geographic location and regional preferences.

Through improved technology, remarketers also have quicker access to dealer inventory levels with the ability to see what vehicles are moving quickly and those remaining on dealer lots for extended periods.

“At any given time, certain vehicles in specific mileage ranges may be more popular than others,” Krogen added. “The export market can also be leveraged on certain models in certain age and mileage ranges. With this market volatility, quicker access to data and telematics information helps a remarketer determine the best platform to sell vehicles in high demand or slower to move – whether it be an auction, online, direct to a dealer, or private sale.”

Impact of Work Truck Configurations on Resale

When purchasing a vehicle, how much must a fleet keep resale in mind? While an absolutely key factor in a vehicle’s total cost of ownership, it should be a part of the equation, not the entire consideration.

“Ultimately, fleets must build a truck that will work for their specific needs without thinking about remarketing because your primary goal is that it does the job you bought it for, so it’s critical it’s delivered exactly how you need it to perform its duties. That’s what matters most. But remember, just because you love it for your fleet doesn’t mean other fleets will want to buy,” said Bishop of FLD, Inc.

A work truck is a tool for a job. It is always important to properly configure a work truck for its job. Ensuring safety is the top priority. Additional factors must be considered once it is determined how the work truck will be used and the necessary job it needs to perform.

“Configuring a vehicle with remarketing in mind and the ability to appeal to a variety of buyers and their needs can positively impact the work truck’s resale price. Often, the more customized a vehicle is, the more it costs upfront, and the fewest buyers will likely be interested in resale, limiting competition and ultimately lowering the sales price,” explained Krogen of Enterprise Fleet Management.

At the time of resale, knowing the specific packages and equipment on a work truck to market it and secure the highest sale price efficiently is important. 

“With work truck fleets scattered throughout the country, a fleet manager might assume certain equipment they generally buy is on a vehicle, which is not always the case. If a work truck purchased stock (outside their normal buy) or entered the fleet through a business acquisition of another company, the fleet manager might not know exactly what they have,” Krogen warned. “It is very important to invest time in conducting early research and analysis to truly understand the value of each work truck and determine the necessary configurations to perform the job needed and meet resale targets when the time comes.

Bishop also noted the challenge of specialty configurations on work trucks and the impact on resale.

“Many fleet vehicles are built specifically for a company’s needs and don’t sell easily in the aftermarket. Think of what a railroad will need – it’s not an everyday vehicle. When you have those assets, you must understand you may have to plan for greater depreciation,” Bishop added. “It’s also really important that when you go to spec a new truck that fleets avoid powertrains or upfitting that can’t handle the job they want it to as those things will eventually break and lower your ROI when it’s time to sell.”

Thankfully, Giles at Black Book noted that sales and remarketing efforts have greatly improved over the past decade as this industry has embraced internet sales and marketing opportunities.

“Understanding your secondary customers is key. Where are these units being remarketed in relation to their prospective buyers? Today’s technology has allowed us to expand and cover more ground,” Giles added.

Remarketing for Tips for New Fleet Managers

We aren’t all born to manage and remarket work trucks. For those new to the industry, here are a few tips from Jeff Krogen, vice president of Fleet Strategy at Enterprise Fleet Management. that can help:

• Tip 1: Connect with remarketers that have been in the industry for a while. I have found the remarketing industry to be close-knit and welcoming to newcomers.  Those of us who have been working within this area for some time enjoy sharing strategies and hearing fresh perspectives.
• Tip 2: Be transparent and honest – this is critical to your reputation and success in remarketing.
• Tip 3: Be present and attentive at an auction. Watch the vehicles go through both online and in-lane bids. This approach will provide a better understanding of what is driving price. An example to watch for includes whether a specific vehicle rolls through a lane with one buyer on it and gets short-sold. Spend some time – and don’t judge the market on only a few sales.
• Tip 4: Price based on retail actuals, less reasonable dealer profit, less realistic reconditioning, and “get ready” costs – will be helpful.
• Tip 5: Trucks depreciate (most of the time), so keep the sales pace up. If it’s not moving, re-evaluate your floor price to ensure the vehicle doesn’t sit for an extended period.

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