Selling green Ex-Fleet vehicles

As vehicle traders and the general public becomes more educated and trusting of low and zero-emission vehicles, the demand – and therefore price – for such vehicles increases, writes John Davies, chairman of the Vehicle Remarketing Association

Selling ex-fleet vehicles that have green credentials needn’t be the headache that perhaps it is perceived to be. Like selling any ex-fleet vehicle, businesses can maintain and best prepare their green ex-fleet vehicles to receive the strongest price, but equally the final prices businesses are able to get is subject to the conditions of the market and consumer demand.
    

We are finding that as vehicle traders and ultimately the general public become more educated and trusting of alternatively‑fueled vehicles, such as electric vehicles (EVs), hybrids and LPGs, so increases the demand and thus price for such vehicles.

Hybrids
Full hybrids are doing well; vehicles like the Toyota Prius have been on the market for a long time and consumers are trusting large manufacturers to build a vehicle that is solid and reliable many years down the line.
    
As the market continues to be educated on alternatively fuelled vehicles, hybrids can find themselves holding their prices well as they avoid the problem of range anxiety commonly found with EVs, while still giving the buyer the a vehicle with reduced CO2 emissions.
    
Because of all this, selling ex-fleet hybrids shouldn’t be too different from remarketing traditional diesels. Plug-in hybrids like the Chevrolet Volt may need a little more explanation about recharging and the full benefits of the car over full hybrids. But essentially hybrids should not be treated too differently as primarily they are a diesel with a small electric motor for urban motoring.

Electric Vehicles
The jury is still out on the electric vehicle market. EVs once used to be preserve of early adopters and businesses as part of their corporate social responsibility. But times are now changing and the EV market is growing thanks to improvements in EV technology.
    
To underline this, new sales of EVs are expected double from 3,000 in 2012 to 6,000 in 2013, and Transport for London is ramping up its number of chargers from 900 to 1,300 in 2013. Given however that just over two million new cars were registered in the UK in 2012 (source, SMMT) the 100 per cent EV market is obviously still in its infancy. Therefore there are currently not many vehicles on the second hand market, making it difficult to comment on residuals. We can however predict how we expect the used EV market to behave in the near future as more used EVs enter the forecourts.
    
We can see electric vans like the Nissan eNV200 doing well based on their low running costs and being purchased based on business needs and low daily mileages.
    
EV range capabilities have now improved sufficiently enough that businesses and consumers that fit a certain profile – for example, those who drive their vehicles less than 100 miles per day – are happy to use them as their method of transportation.

Accordingly, sellers should be targeting their ex-fleet EVs in urban areas. As a practical example, in London demand and prices may be higher than in the rest of the country because EVs will enable potential buyers to get around the Congestion Charge and will generally reduce motoring costs. In future, cities such as London that have a pollution problem may be incentivised to run more EVs, so used prices may fluctuate by region.

Batteries
Another serious consideration for fleets with EVs is the batteries. Critics of EVs will point out that while EV owners forego the cost of filling up, batteries deteriorate over time. And according to Glass’s Guide, the typical EV battery will have a useful life of up to eight years before potentially costing thousands to replace, obviously affecting the final price sellers can expect to fetch at market.
    
Accordingly, for those selling ex-fleet EVs, the amount of manufacturer warranty left on the vehicle, information on battery condition and mileage covered will be crucial to determining the peace of mind of the buyer, and therefore the price they are willing to pay. Those with an eight year warranty such as the Volvo V60 Plug-in Hybrid however should easily attract successive owners.
    
What’s more, there are far less moving parts in an EV than those with internal combustion engines. This means the potential for expensive end of contract repairs due to wear and tear is much reduced, all meaning less time and money spent at the repair shop against those vehicles with ICEs.

Letting the market mature
In closing, as the market become more comfortable with hybrids and EVs, so it will become easier to sell ultra-low CO2 ex-fleet vehicles. The EV market is slightly less mature than the hybrid market and so we would expect some volatility in this area as traders understand the long term implications of batteries on residual values.
    
In the near future we would expect values to stay fairly consistent, especially in this market when supply in general of used cars is relatively low. In the future the supply and demand economics will kick in and if there are too many in the market prices may fall, if supply remains limited and recharging costs low, prices will stay strong.
    
Who would have thought ten years ago the Toyota Prius would have become a mainstream used car so sought after by drivers? Hybrids and EVs are here to stay.

Further information
www.vehicle-remarketing.co.uk