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Disposal of Vehicles
No prudent businessman can afford to ignore potential financial losses that are a direct cost to the bottom line profits when used vehicles are not disposed of at the right price.

The actual disposal process usually needs, to be refined. This requires an in-depth knowledge of the used market, i.e. dealers, pricing, new models, local markets, market guidebooks, legislation etc. The used market buyer and what influences are brought to bear on him are also important aspects.

Disposal procedures should be developed taking into account the following aspects:-

1. There are different ways to dispose of a used vehicle. In essence they are trade-in, retailing, wholesaling, tenders, auctions, and sales to employees. Each method has its pros and cons and should be properly evaluated.

2. The formation of buying rings must be acknowledged and procedures must be developed to stop them.

3. All vehicles due for sale must be inspected. Used vehicle condition reports must be developed and used to ascertain condition, make good costs and set the reserve resale values. The used vehicle value guides must form part of the system used to set these values.

4. Decisions must be made on maximum expenditure per vehicle in order to obtain the best residual values. Used vehicle conditioning is not an entrenched practice in South Africa. An evaluation system must be developed to decide on what to do with appropriate vehicles. Either too little or too much reconditioning can affect resale values and financial returns. The condition of the vehicle will always have the highest impact on the value. '

5. Minimum reserve prices must be established for each vehicle.

6. Most fleet owners still dispose of their vehicles through dealers. This is usually done as a trade-in at the time the new vehicle is purchased. In the long run this is probably the easiest method to use, although you will not always get the best price.

7. Wholesaling, retailing and employee sales are all options but the method that gives the best return in the shortest period, with the least administrative problems and costs should be the chosen method.

8. Resale value targets must be developed and set as company guidelines.