Buying Used Cars (Intelligently)

Every operator has felt the effects of the changes in our industry this past year: a reduction of program car availability, price volatility of risk vehicles and limited finance options.

In past years an operator might acquire a few used vehicles to meet specialty or short-term seasonal needs—but going forward, used vehicle acquisitions will become a necessity for many rental car operators.

This list of best practices will guide you in acquiring used vehicles for your fleet needs.

Only Buy What You Need
Many operators in a panic to “fleet-up” will buy too many vehicles and/or vehicles of a type that truly do not fit their needs. Make sure to identify your volume and vehicle type requirements before you start buying.

Look on the Fringe
One consideration for buying properly, especially if you are a franchisee or are affiliated with a national reservation group, is to look for “fringe” vehicles that are in a particular car class but not necessarily promoted by the corporate reservation group.

Look also for fringe vehicles in a higher car class as well. You may be able to acquire them for a price comparable to a featured car in a lower class. By doing this, you have the opportunity to meet vehicle demands in both car classes. Don’t get hung up with buying a particular brand of car—diversify.

Know the Resale Potential
The other key consideration in vehicle selection is resale potential in your market. Having an idea of which used cars sell well in your market will help you to select or shy away from particular brands or models. If you are depreciating your vehicles properly and keeping them in service for a reasonable amount of time, you will be in a great position to sell your vehicles when necessary. (See sidebar.)

Which Content Retains Value?
Content is huge, not only for rental revenue but also for resale value. Items such as alloy wheels, sunroofs, multi-disc CD players and cruise control all add hundreds of dollars to resale values. Many times, these components are not VIN specific—so find out what options are available and confirm the content.

CONTINUED:  Buying Used Cars (Intelligently)
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