Increasing use of auctions to sell second-hand goods

The sale of used cars for the long-term hire company generates about one third of its turnover. Then, when used-car prices reach high unit values, as they will in 2023, it happens that the resale of used cars generates around EUR 2.9 million for the entire sector (source: Aniasa), bringing almost EUR 600 million more to the rental companies' coffers than the previous year, equal to growth in value of 25%. But it is one thing to invoice, quite another to make a profit. The margin on the sale of used cars depends on the delta between the sale price, net of repair costs and other miscellaneous costs, and the residual value that the lessee had attributed to the car at the time it was leased. The analysis is therefore of vital importance for used cars.

According to Autovista Group figures, in April 2024 a 36-month old used car with around 60,000 kilometres on the clock was purchased by professionals at an average of 53% of the list price, down by 5% compared to the same month last year. Residual values are expected to fall by 3.7% in 2024. In addition to the drop in values, the number of days it takes to sell a used car has increased. In April, vehicles remained in stock for an average of almost 58 days before the sale was finalised, compared to 51 days in 2023.

Charterers use several channels to sell their used cars. The numerically most important channel is B2B, i.e. sales to intermediaries, the dealers. This channel is largely managed through auction portals that are becoming increasingly sophisticated, with the aim of simplifying the selection mechanisms and subsequently acting on the delivery times of the cars purchased. For example, at Arval, where 70 per cent of sales are generated by the B2B channel, which has around 1,800 customers, they have made available to customers, according to Emmanuel Lufray, Remarketing Director, a tool that displays the market price on a national and provincial scale of the cars available and which they include in their auctions.

In addition, the company's proprietary platform gives customers the possibility to select cars of interest in advance and thus be informed about auctions where they will be featured. Furthermore, during an auction the customer will be able to choose a model type or make of interest without wasting time going through the entire list. Work is also being done on logistics where the aim is to aim to reduce the average delivery time of cars, which today is 12 days.

The car that comes back from hire also generates turnover by putting it back into circulation through rented cars, which is becoming an increasingly strategic service.