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After having the privilege of participating in the Remarketing segment at the NAFA Canadian Fleet Conference last month, it was apparent that every fleet is facing the same challenges and will become even more dependant upon their fleet management company to uncover methods that will maximize the return on lease disposals. We are now in the midst of a downward cycle for used vehicles. The fact that cars are now being imported as opposed to exporting should be enough evidence to substantiate this statement.

With the Canadian dollar trading at par with the U.S. “Greenback” we will see more used vehicles from the United States entering the Canadian market place putting downward pressure on pricing.

There is the distinct possibility of the manufacturer’s lowering Canadian new vehicle pricing to be more in line with new car pricing in the U.S. We need to learn from our experience in the early 2000’s and be aware of the adverse affect “front end” money has on the used vehicle market.

Both of the above issues will increase depreciation costs. I suggest reviewing your policy for depreciation rates and residuals with your client service team as soon as you can. You may or may not be in a vulnerable position now but I’m sure we are all in agreement that it’s best we address this sooner rather than later to avoid any surprises.

Other items that were discussed were the continued evolution of internet auctions, hybrids and alternative fuelled vehicles and their impact in the used vehicle marketplace, “Employee Purchase” programs and the importance of providing vehicle history on both the physical and mechanical components of the vehicle.
Foss National Leasing has witnessed the importance of providing maintenance history records on the vehicles we have sold over the past couple of years. Vehicles that have maintenance records, convert (sell) the first time the vehicle is available 75% of the time compared to less than 60% for those vehicles without service records. What this means is that you are more likely to sell your vehicle and take advantage of the current market as opposed to exposing yourself to declining prices over time.

Consumer Protection Law changes have put more pressure (rightly so) on all parties involved in selling a used vehicle to disclose all information about the vehicle. Foss National Leasing has been utilizing vehicle history reports on our trade-ins, used vehicle purchases and closed end lease returns for well over a year now. We do not have significant measurements yet, but we strongly feel that these reports are having a real and positive impact on how a vehicle is perceived and ultimately its value and are well worth the minimal cost. As we were with the maintenance reports, Foss National Leasing is going to be the “pioneer” in the fleet world and begin utilizing vehicle history reports for all vehicles handled by Foss National Leasing’s remarketing team (wholesale, auction or retail) beginning November 1st.

Please contact your Client Service Representative (C.S.R.) if you DO NOT wish the reports to be run on your vehicles. If you require more information about vehicle history reports please view the CarProof website www.carproof.com or alternatively, contact your C.S.R. or myself directly.
Foss National Leasing is sensitive to your fleet’s costs, realizing that depreciation is one of the largest expenses. Our Remarketing department takes pride in continuously searching for ways to maximize your return to reduce these costs.

Sincerely,
Todd Ritza
Remarketing Manager
905-771-0543
tritza@fossnational.com