RISK: New launch is good news for fleets
CD Auction Group have launched a new finance scheme that aims to eliminate the auction risk for fleet operators and vendors.
The Fleet Crystallisation programme protects auction vendors against any fall in future residual values, ensure they get fully paid for a vehicle within 56hours of on-site arrival and guarantee they are left with no unsold vehicles.
Roger Woodward, Managing Director of CD Auction Group, said: “This new finance programme, which is unique to CD Auction Group, has the potential to transform the cashflow 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 is yet another example of how CD Auction Group leads the market in innovation and has grown successfully by listening to its customers and offering practical, effective solutions to their commercial challenges.”
Under the Fleet Crystallisation programme, CD Auction Group will offer to pay the vendor an agreed value for any vehicle within 56hours of it arriving on site.
CD Auction Group will then take full responsibility for remarketing that vehicle and any subsequent auction risk on it.
The programme, claim CD, means vendors benefit from improved cashflow, 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, CD Auction Group 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.
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.
“The CD Auction Group Fleet Crystallisation programme is simple but radical and based on our 25years of experience in this industry,” added Mr Woodward.
“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.”
CD Auction Group are currently discussing the programme with its vendor clients.
Early demand is expected to come from small and medium fleet operators and leasing companies.