REMARKETING: Getting the spec just right
06 February 2017
Author: Debbie Wood
Like Goldilocks and her porridge, used car buyers like a car that is kitted out and priced just right for their tastes. It needs to look good, offer value for money and come with a variety of mod cons.
So what key equipment should fleet managers be looking to include on their cars for a quick sale and strong value when it comes to de-fleeting? In this article, we take a closer look.
Has sat-nav had its day?
Sat-nav has been a must-have for second-hand buyers for some time now and traditionally have helped improve the speed of sale as a result. However, Jon Mitchell, Autorola's UK group sales director, warns fleets to not pay over the odds for the tech when buying new.
"Kit like this will always help sell a car over an identical car without it," he tells granitekitchen. "But don't spend additional money on upgrading the sat-nav as you will never see the return."
Martin Potter, group operations director at Aston Barclay, believes fleets should only consider sat-nav when it comes as part of a wider technology options pack.
"Sat-nav in isolation is no longer what consumers are looking for - they will be looking at packs to include sat-nav, wireless, Bluetooth, internet access etc," he says. "Don't invest an extra £1,200 in a bigger screen for your sat-nav; instead, look at some of the increased number of broader packs that are now being offered by car makers."
Simon Henstock, BCA's chief operating officer, UK remarketing, agrees, and believes smartphones have lessened the value of integrated sat-navs in today's used car market.
"Most equipment upgrades eventually become 'expected', both by company car drivers and private motorists who expect a good deal when they buy a used car," Henstock says. "A factory-fitted sat-nav was a big incentive a few years back, but less so nowadays because most smartphones have perfectly serviceable navigation apps that can be downloaded and activated via a hands-free set."
It's climate control or air-con that are deemed essential for used car values, as Henstock explains.
"Air-con - and increasingly climate control - is expected in the used car market on anything above an entry-level model. Here, it is more about losing value if it is not present. The bar is always rising for in-car entertainment, and used car buyers' expectations are equally high."
Newer features such as panoramic sunroofs and LED light technology are proving popular in the new car market - however, used buyers, according to Mitchell, are yet to fully embrace these options.
"We are seeing a big interest for these sunroofs in SUVs, but the expensive outlay isn't always returned," he says. "We haven't seen that headlights are yet on the used car buyer's radar, but BMW, for example, now, in some cases, reverts to halogen as standard, which forces buyers to pay for LEDs upfront to avoid problems selling on the back end."
Henstock adds that, although headlamp technology is a perk for many drivers, it's unlikely to deliver a return on the initial premium paid.
"Advanced headlamp technology is regarded as a 'nice to have' on executive and premium models, but negligible in terms of return. Safety features are generally 'expected' and buyers tend not to factor them in as a premium."
Potter disagrees, though, and believes that in three or four years' time, used buyers will feel differently about the technology as it will be more commonly used.
Investing an extra £20-30 per month for high-spec headlights on a £40-50k car might be worth the investment as in three to four years' time the used buyer investing £20k in this type of car will want the latest equipment and this includes the latest LED and driving lights," he says.
Connectivity, is becoming an increasingly important requirement for the modern-day driver and, according to Henstock, is also becoming desirable in the used car market too.
"Increasingly, extras like smartphone connectivity, touchscreen media systems and controls, driving and parking aids are expected on younger used cars, as well as multi-functional dashboard computers that monitor everything from your mpg to recommending the gear you should be in, rain-sensitive windscreens and light-sensitive headlights.
"Going forwards, connectivity, data and safety are likely to be critical - giving drivers live information about their journey so blockages and accidents can be avoided, for example - as are an increasing number of driving aids from hands-free parking to auto-stopping to avoid accidents."
Sportier trims and features also do well in the used car market - however, fleets are being warned that features in poor condition can actually have a negative impact.
"Black wheels look great when they are new, but when they have had a few scuffs they look less attractive. In our experience it's more about the condition of the wheel that will help sell the car at a good price," says Mitchell. "If they are in poor condition they reduce the chance of a quick sale and definitely reduce used prices."
Potter, however, doesn't agree and espouses the virtues of 'blingier' alloy wheels, saying that fleets should always look to larger and coloured alloy wheels to improve the car's appearance and therefore resale values.
"The Jaguar Black edition is a good example of how coloured alloy wheels make the car look even sportier; at the same time they are very tasteful. Larger wheel options are now commonplace on many cars, and you should always look at opting for the right size of wheel to make the car look good," he says. "Be careful, though, as if they are too big the consumer may be put off by the cost of tyre replacement in three to four years' time when the car comes back into the used market. Optional AMG and M-Sport wheels immediately increase values on Mercedes and BMW models."
Each sector will have different requirements that used buyers come to expect. According to Mitchell, cars in the executive class must have alloy wheels, metallic paint and leather upholstery, "otherwise it simply won't sell".
Henstock adds that low-spec premium cars can be very difficult to market and fleets shouldn't cut back when it comes to specification on these particular models.
"If you have premium models on the fleet then they should have a good level of specification - attractive paint and trim, leather interior, alloys, all the expected bells and whistles - because low-spec premium cars can be difficult to remarket.
"Never scrimp on specification when putting premium and luxury models on a fleet, but equally be aware that the investment at the front end is unlikely to be returned in full at remarketing time. However, a well-specified premium model is much easier to sell than the lower-spec'd example and - all things being equal - will attract more buyers and better returns.
"With this in mind, user-chooser fleets should beware of badge snobbery among their drivers, where an allowance is stretched to breaking point just to get the 'right' badge on the bonnet at the expense of spec and trim."
Colour choice still critical
Garish paintwork is still top of the list when it comes to the optional equipment fleets should avoid. According to experts, get the colour wrong and some cars are just about unsalable at market price.
"Motorists will make decisions about desirability and value and will buy the best-used cars they can for the money they can afford, avoiding the cars that appear overly expensive, poorly specified or in unattractive colours," says Potter.
He also adds that executive cars should always come with metallic paint, and matching the right external colour with the interior is very important on these models. On the other side of the scale, family car buyers also demand value for money.
Specification is important on family and executive cars. "No consumer wants to buy a three to four-year-old used car with a basic specification any more," Potter explains. "Lower-spec cars aren't as attractive for a consumer with £10k to spend on a used car."
Finally, there's one 'old-school' piece of kit that all our experts agree, if absent, will have an impact on values, and that's the spare key. So making sure one is always filed away is well worth remembering.