12th October 2016

The pros and cons of buying an ex-fleet company car

Don’t elbow us for saying so, but the New Year’s not all that far away and Boxing Day onwards is when some people’s thoughts turn to their plans for the twelve months ahead. Tablets at the ready and leftover mince pies within reach, the nation begins searching topics ranging from holidays and decorating to getting a new car. Budgetary limits in relation to the latter see minds wander over to the perennial debate over whether buying an ex-fleet car can make sense, so we thought we’d take a look.

Figures from the start of the year1, issued by the likes of BCA and Manheim identified a 4.3% year-on-year drop in the value of ex-fleet cars being processed through auctions, despite typical fleet cars now materialising as 46-month-old examples with fewer than 52,000 miles on the clock, compared to the perhaps dated perception that they’re all high-mileage rep-mobiles that have racked up six-figure distances.

Fast forward to September and the situation became considerably different2, BCA’s Pulse Report highlighting a 3.2% year-on-year increase, ex-fleet cars commanding £317 more than twelve months ago, their average value now nudging over £10,000 for the first time on record.

Ex-fleet cars sold off by all manner of organisations from SMEs and large multinational firms, to charities and emergency services, can typically be found at traditional car auctions, but may also appear on main or independent dealer forecourts, in used car classifieds, and listed privately on online auction sites like eBay.

As with any used car, but especially with an ex-fleet car which is more likely to be considered ‘high mileage’, regular servicing in line with the manufacturer’s specifications is key. Some forum threads3 contain posts from people who have bought ex-fleet cars that had been serviced every two months, which is unusually fastidious and a real bonus for the lucky buyers. Most organisations lease the cars and vans they run on their fleets, and leasing (also known as ‘contract hire’) companies stipulate that cars must be serviced regularly, which is again a good thing for potential future owners.

Businesses and other organisations simply can’t afford the knock-on effects of any of their fleet vehicles being taken off the road, so any issues will more than likely have been addressed in a prompt manner, and any recalls will almost certainly have been processed. This isn’t always the case with privately-owned cars for sale on the used market.

High-mileage ex-fleet examples, no matter where they come up for sale, will probably have spent most of their time on the motorway, meaning that their engines will have been working optimally, their brakes seldom used, and fewer potholes and speed bumps encountered. Additionally, their diesel particulate filters (DPF) will have had more opportunities to regenerate or unclog themselves compared to low-mileage cars used for bumbling about the drivers’ local areas.

A danger with buying an ex-fleet car on the used market, though, is that their drivers may not have ultimately taken quite as much care of them had they been privately-owned vehicles, so clutches, brakes, suspension, tyres and interiors may have come in for greater levels of abuse, especially if regularly driven by employees in a rush.

The automotive industry traditionally views former company cars as slightly less valuable than cars that were privately-owned, which is why many used car dealers and car supermarkets these days buy ex-fleet cars at auction and sell them on as ‘one owner’ examples. Caution is advised here, as further digging can sometimes identify that a car actually has two recorded owners, the first being a leasing company, or the original dealer if the car was used as a demonstrator. A handy tip when going to view and test drive a used car is to look at the number plates and see if you can spot a name such as Lex Autolease, Hitatchi, Leaseplan or Arval, as these are all contract hire firms.

There are clearly pros and cons to buying a higher-mileage, ex-fleet car from an auction, dealer or private sale for use as your personal family car. As with any used vehicle, its condition inside and out, service history and ownership details all need to be carefully weighed up and its price compared to the values quoted by the likes of Parkers and Glass’s.

 

Sources:

  1. http://www.am-online.com/news/used-cars/2016/02/17/ex-fleet-car-values-are-dropping-at-auction-but-trade-ins-are-holding-up
  2. http://www.businesscar.co.uk/news/2016/used-car-values-hit-record-high-in-september
  3. http://forums.moneysavingexpert.com/showthread.php?t=5410784