A new web site from Tesco selling second-hand cars could provide
leasing companies with a cheaper alternative to auctions when
selling old models, an expert has claimed.
Vehicle leasing companies have been hit hard by the recession
after a slump in residual values impacted on companies’
profitability.
Go deeper with GlobalData
Tesco’s new site, tescocars.com, offers thousands of used
vehicles that can be collected or delivered to customers’ homes.
Sellers can choose three different charges for using the site –
commission, profit share or sell and return. Each vehicle sold on
the site must pass an RAC inspection.
Andy Higginson, Tesco’s chief executive of retailing services,
said that the site had been designed as an alternative to
second-hand car forecourts.
“By supplying directly to customers, there is no middle man, no
expensive showroom and no salespeople on commission,” he said.
“Buyers can be sure they are getting the best value out there.”
Graham Hill, CEO of GHA Finance, a broker for
vehicle leasing, who was an advisor to the Tesco car site, said
second-hand car sites can provide a better return than auctions
because sales are direct to consumers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Traders and dealers are removed from the
equation leaving buyers with cheaper than forecourt prices while
still returning more to the lessor,” he said.
One early customer for the Tesco services is Motability
Operations, the not-for-profit company which provides contract hire
lease vehicles to over 570,000 disabled people through the
Motability Scheme.
But despite the ubiquity of online retailing, used-car web sites
have so far failed to get out of first gear. Last month, Autoquake,
the UK’s best-known online used car retailer, went into
administration.
One challenge faced by online car retailers is having the
capacity to store thousands of used cars. Each year, around one
million used vehicles from the fleet leasing sector come into the
UK market, according to fleet and vehicle registration data.
Tony Gannon, communications director of British Car Auctions,
said: “The current business models of consumers buying [cars]
through dealerships and leasing and fleet operators remarketing
through auctions and other channels is tried and tested and
successful.”
nick.huber@vrlfinancialnews.com
