Q&A: CD Auction Group on its new defleet programme
How does it work?
‘Under the Fleet Crystallisation programme, CD Auction Group will offer to pay the vendor an agreed value for any vehicle within 56 hours of it arriving on site. CD Auction Group will then take full responsibility for remarketing that vehicle and any subsequent auction risk on it.
‘We will protect auction vendors against any fall in future residual values; ensure they get paid in full for a vehicle within 56 hours of it arriving on site and guarantee they are left with no unsold vehicles.
‘The programme means vendors benefit from improved cash flow, can avoid “distress” selling into a poor market and can defleet substantial batches of similar vehicles at one time, without fear of “flooding” the market.
‘Once the vehicles have been entered into the programme, we will take the responsibility and risk of releasing them for sale at the right time and in the right way. This could include decisions about holding vehicles back until market conditions improve, controlling volumes to market and vehicle refurbishment.’
What are its advantages to the defleeter?
‘This new finance programme, which is unique to CD Auction Group, has the potential to transform the cash flow of companies sending their vehicles to our online auction.
‘We believe it could be instrumental in removing some of the blockages in the fleet supply chain by guaranteeing virtually instant cash, up front, for vehicles coming to market. This could improve trading conditions across the industry.
‘It means vendors can avoid the peaks and troughs of the market, get their money up front and leave the risk with us.
‘Of course, all our customers will have a choice.
It’s up to them whether they stick to our successful “traditional” auction or take up our funding offer and get the cash up front.’
How do you value the cars and what charges are there for you taking the risk?
‘Valuations will be based on a vendor’s fleet profile, previous sale results and typical returns at CD Auction Group sales. The valuations will be made subject to vehicle condition and CD Auction Group will charge a standard handling fee per vehicle.’