The real value of residual underwriting

“It’s very easy to do things a particular way because that’s the way they’ve always been done,” says Julian Pullen, Procurement Manager at grs. “But when it comes to de-fleeting vehicles we would always recommend taking a look at other options that may help to reduce risk and increase value.”
One way of achieving this is to look at alternative, or additional, disposal routes as part of a multi-channel remarketing strategy, such as residual value underwriting.
“It can help to reduce risk, eliminate uncertainty and speed up the de-fleet process,” says Procurement Manager Julian Pullen on the benefits of this approach, which gives vendors such as rental, contract hire companies and other fleet operators a guaranteed amount for their vehicles when they come off-fleet. This enables them to forward plan with greater confidence.
“Residual value underwriting can give fleet operators far greater operational security, as we provide the underwriting and take the problem off their hands,” continues Julian.
“Let’s say an operator has 20 Honda Civics coming off-fleet in six months’ time. We could provide a guaranteed price for those vehicles today which transfers the risk from the vendor to grs, providing far greater financial security.
“It’s always a good time to talk to us about it,” continues Julian, explaining that many rental companies and fleet operators are likely to have brought new vehicles on to their fleets following the registration plate change on 1st September. “Residual value underwriting is so beneficial because it enables operators to buy their new fleet based on the value of their existing vehicles, and there’s much to be said for the security that brings.”
Such forward planning can pay dividends in the long run, especially when market conditions are uncertain or volatile, or when values are depressed. When faced with such difficult conditions it may appear tempting to keep running vehicles for longer than originally planned, yet the additional maintenance costs such as servicing or a new set of tyres – not to mention those costs inherent in having a vehicle off the road – are likely to outweigh any benefits.
There are other advantages too; for many operators space is limited, which can create problems when new vehicles are delivered. “The handover period can be tricky and we can help ease the fleet change process. We will collect vehicles quickly, freeing up parking space, and either settle finance agreements or deposit funds straight into the vendors bank account. An all together quicker and less painful process than alternative routes to market such as auction or direct vehicle by vehicle sale”.
For more information on the benefits of residual value underwriting, or to talk through your specific requirements, please contact Julian Pullen on 01743 281814.

Making life as easy as possible for retailers

Newly promoted to the position of Sales Manager, Dean Richards talked to re:market about his new role and how grs is aiming to make life easier than ever before for retailers across the UK.
“I always wanted to join a company where I’d have the opportunity to work my way up,” says Dean Richards, who arrived at grs straight from college six years ago. Starting out as a sales executive, he has indeed worked his way up, becoming an account manager in the south east before being appointed Sales Manager earlier this year.
Since taking on the role, Dean has overseen a restructuring of the six-strong team of account managers which has seen them move away from having geographical responsibilities, to looking after a selected portfolio of clients instead, wherever they may be based.
Explaining the changes, Dean says: “Building relationships is key both for us and our customers, as it’s vital that we really get to know them and understand their businesses. As a result, we have been looking to match account managers to customers, rather than taking a geographical approach.
“We are a relationship business as much as anything else, and by getting to know our customers even better will help make sure work in partnership with them to develop the full potential of their businesses.”
What this means in practice is that some retailers may recently have been introduced to a new account manager who they are also likely to meet soon, if they haven’t done so already. As well as encouraging the account managers to take to the road to meet with customers on a regular basis, Dean is also keen to invite retailers to visit grs – to make their own inspection of Cold Meece logistics centre, which is capable of storing up to 4,500 vehicles at any one time.
All vehicles are thoroughly inspected and prepared for sale at the purpose-built 36-acre site, which also features a state-of-the-art photographic suite where they are photographed inside and out on a 360 degree turntable. The high quality images are then posted to the grs website, which can then be used by retailers to order stock. The online resource can even become an extension of a retailer’s own stock, with the images helping to close sales up and down the country.
“Our aim is to make life easier for retailers and taking a look around Cold Meece is a great way of demonstrating how we’re able to achieve that,” says Dean, adding that retailers of any size are able to benefit.
“Whether retailers buy one or a hundred vehicles from us, they can all tap into our extensive stock and the expertise of our team, who can provide advice and guidance on makes and models which are selling particularly well at any given moment.”
He concludes: “What’s more, they can all be assured of quality, consistency and speed, as we aim to deliver vehicles within two days of receiving cleared funds. That’s important, as it enables retailers to have the vehicles they’ve bought on the forecourt and ready for sale as quickly as possible.”
If you would like to know more or are interested in visiting Cold Meece, please contact Dean Richards on 01743 281818.

Acting as an agent: the Cold Meece connection

“Any company de-fleeting vehicles is looking for three key benefits – speed, efficiency and value,” says grs Sales Director Danny Hartshorne. “Turnaround time is key, and vendors want a partner who understands their needs and has the flexibility and know-how to accommodate them”.

Recognised as a leader in the remarketing sector, grs has pioneered a number of different approaches which can all work together as part of a multi-channel strategy, including outright purchase and residual value underwriting, both of which have grown in popularity in recent years.

However, there is an increasing focus on a third route, which brings another set of benefits for vendors – where grs acts as an agent on their behalf.

“There will always be a place for auctions within de-fleeting strategies, but they’re only one of the options available,” continues Danny Hartshorne. “Working with grs on an agency basis means there’s no waiting for the next auction if a vehicle fails to sell first time. We have built up extremely strong relationships with some 13,000 franchised and independent retailers across the UK over the past 15 years, so we have a guaranteed market for de-fleeted vehicles.”

However, there is another significant weapon in grs armoury above and beyond its deep industry expertise and extensive retailer relationships – its 36-acre logistics centre in Staffordshire. The purpose-built facility is capable of processing 60,000 cars and LCVs every year, and has the capacity to store up to 4,500 vehicles safely and securely at any one time.

Continues Danny: “Our Cold Meece site adds another dimension to our agency service which is unrivalled, as it gives us the ability to de-fleet, inspect and refurbish vehicles without delay. The team there understands the importance of speed to our customers.”

An estimate for any refurbishment required can be provided as soon as the inspection is completed, or work carried out on a fixed fee basis, whichever suits the vendor best. What’s more, all vehicles are photographed in the new Cold Meece photographic suite which includes a 360 degree turntable and high quality digital camera equipment. Photographed inside and out against a consistent and unobtrusive background, vehicle details and images are uploaded to the grs website where they can be accessed by retailers 24-hours a day – making the company’s agency offer more compelling than ever.

In addition, management information can be tailored to meet individual vendor requirements, whether it’s ‘days to sale’ or ‘performance against the market’, ensuring accurate and consistent measures of success are provided.

“Partnership is at the core of the agency route,” continues Danny. “Our logistics centre helps give us the flexibility – and capacity – that’s required to work with vendors in the way that suits them best. It also enables us to move quickly on a vendor’s behalf, carry out value-driven refurbishment and achieve real speed of sale. It gives us a real edge on behalf of our customers.”

For more information on how working with grs on an agency basis could benefit your business, please call Danny Hartshorne on 01743 281836. 

Making a commercial difference

The strong performance of commercial vehicles has continued unabated throughout the first half of 2011 with low de-fleet numbers keeping prices correspondingly high. This has been accompanied by a distinct flight to quality, with the emphasis now firmly on condition and presentation over mileage.
“High quality, well presented vehicles have been out-performing book values significantly and we see no reason to believe that this won’t continue,” said grs Commercial Specialist David Fildes.
“Condition and preparation are two keys to achieving strong returns and are definitely more important than the distance a vehicle has covered. On the other hand, poorly presented or poor quality vehicles are consistently selling for a lower percentage of book value. Without doubt, today’s market is all about quality, more so than ever before”.
Car-derived and medium sized vans such as the Ford Transit and the Vauxhall Vivaro are proving particularly popular, and grs has noted another interesting trend in 2011 – a strong growth in demand for different colour and higher spec vehicles boasting features such as air conditioning and parking sensors.
While seasonality may account for the importance of features such as air conditioning as buyers look for additional comfort during the hot summer months, this doesn’t explain the growing demand for different colours.
Ben Harvey, Commercial Vehicle Team Leader explains: “At first sight, this may seem hard to explain. However, vans can be quite an emotional purchase and for a small business they can also be a valuable shop window. When money is tight businesses may not be spending so much money on traditional advertising, but they do appear to be investing in the appearance of their vehicles, which can say a lot about a business to potential customers, as well as acting as a permanent mobile advert.”
Continued Ben: “That’s why good presentation is so important in today’s market, along with anything that helps a vehicle to stand out from the crowd, such as a different colour and metallic paint too. Add to that some professional sign-writing and businesses have a really valuable opportunity to advertise their business on the move”.
With this in mind, commercial vehicles – especially those with some additional bells and whistles – should be borne in mind by retailers, to help make their forecourt stand out and to tempt customers through the door.
The number of commercial vehicles sold by grs has risen ten-fold over the past five years, with more than 2,000 sold last year alone. This year has started strongly too, as more and more retailers realise the opportunities they can present.
Retailers looking to dip a toe into this market can call on the expertise of the grs team who are always on hand to talk them through the process and provide advice on the most popular vehicles and specification at any given moment.
“The shortage of high quality, well presented commercial vehicles makes them a terrific profit opportunity. Retailers who haven’t traditionally focused on this area might want to consider putting one on the forecourt to test the market and wet the appetite of customers,” said Ben.
“Retailers can treat grs stock as their own, offering their own customers access to the entire grs database online, making it entirely risk-free for them. And we don’t charge retailers a penny for buying from us – the price they agree is the price they pay for the vehicle.
“We really do make buying trade vehicles as easy as possible”.  

Its a people thing - re:market talks to Chris Sargeant, Contract Manager

“It’s all about certainty,” says Chris Sargeant, Contract Manager at grs. “We’re able to give vendors certainty in terms of selling their vehicles and in terms of cashflow, both of which are incredibly important.”

With nearly 20 years experience of vehicle buying, Chris has been an important part of the grs team since 2005, and he has also experienced life on the other side of the fence having previously worked for several leading retailers.
Chris is passionate about the grs proposition and how it can benefit vendors. Turning his attention to outright purchase he continues: “There’s no risk to the vendor whatsoever and they have no exposure to changing market trends and the problems of vehicles not selling the first time at auction. We take away the risk and also take the vehicles off the vendor’s balance sheet straight away”
Payment is always quick – normally within two working days – and grs will arrange for the vehicles to be collected as soon as possible. This is particularly important for fleet operators working on a “key for key” basis who need their outgoing vehicles to be moved quickly, to make way for new arrivals.
Chris acknowledges that vendors will continue to send vehicles to auction but says that more and more are choosing to remarket a proportion of their fleet via grs as well. “We have the in-depth market knowledge and expertise that vendors need, across all manufacturers, models, specifications and vehicle ages, from nearly new up to five years’ old, so we can advise vendors on the value of their vehicles at any given moment.”
As you would expect, the market expertise of the grs team is supported by all the necessary infrastructure, systems and processes required to ensure vendors can sell their vehicles quickly and with the minimum of fuss. It’s the company’s network of franchised and independent retailers across the UK that really sets grs apart, as it provides an extensive market for vendors’ vehicles.
However, the scale of the operation should not deter smaller vendors from approaching grs, since they too can benefit from exactly the same level of expertise. “We will buy one vehicle, a hundred and one, or more,” explains Chris. “For example, a smaller rental company may not have the time nor the infrastructure in place to sell, say, four or five vehicles. We may well be able to buy them and take the problem away for them, while also helping to maximise their value”.
Yet it isn’t the market knowledge of the six-strong buying team, nor even the purpose-built logistics centre at Cold Meece which holds the key to success for grs, according to Chris Sargeant. In fact it’s something rather old-fashioned, which so many companies in today’s high-tech business world too often forget – relationships.
“Ultimately we’re a people business and it’s our people that really set us apart,” he explains. “We work extremely hard to build the trust of our customers who know they can buy from us with complete confidence

Playing for two winning sides, the secret life of Chris Venables

To many retailers, especially those in the North West, the name Chris Venables may well be familiar.

A member of the successful grs sales team for nearly five years, Chris spends his evenings and weekends as part of another successful team – Welsh Premier League side Llanelli.
“I always wanted to play football, from a very young age,” says centre midfielder Chris, whose superb 15-yard shot into the far corner of the Bangor goal sealed his side’s 4-1 victory in the Welsh Cup in May – a result which also earned Llanelli a place in the Europa League for the second year in succession.
After securing his place on a soccer scholarship scheme in Shrewsbury, where he is based with grs, Chris first played for Welsh Premier League side Caersws before joining Llanelli. In addition to the Cup win, Llanelli finished in fourth place in the league and Chris has recently signed up for a third season.
And if that’s not enough, he will have the chance to play against the top stars of Manchester United in a pre-season friendly in August – an opportunity he is relishing. “I can’t wait for that. They’ve already sold 5,500 tickets so we’ll be playing in front of a big crowd,” he says.
Playing for two leading teams is demanding for Chris, who has to plan his life with military precision around both his day job and passion for football. Working out in the gym three times a week, he also trains with a local team and meets up with his own team-mates once a week for training, as well as playing most weekends throughout the season.
“It can be hard to juggle commitments to work and club, but grs are great – they’re really flexible and do all they can to help,” says Chris. And while his work colleagues are quick to congratulate him on Llanelli’s successes, they keep their thoughts to themselves when the team loses. “They don’t say too much. They know how seriously I take it!” he says.

The rise of stealth charges and how to avoid them

Most of us will be familiar with the term ‘stealth taxes’, and have probably felt the impact of them in our pockets over the past few years.

Danny Hartshorne

The term has perhaps not traditionally been associated with the car-buying market,   yet today increasing numbers of retailers are noting the unwelcome introduction of stealth charges being levied by some of the auction houses and other re-marketing companies alike.
“The market has changed and many sellers are looking to recoup revenue being lost in other areas by imposing additional fees on buyers – and that’s unwelcome in today’s challenging times,’” says Danny Hartshorne, Sales Director at grs.
Danny draws a parallel with the budget airlines which have gained an unwanted reputation for making numerous additional charges, making the final amount paid much higher than the price of the original ticket. “Buying a vehicle is no longer always as straightforward as it should be, as retailers find that on top of the vehicle price, they are being charged additionally for having documents or spare keys sent out to them, while fees are being levied based on the vehicle’s price or even its engine size.”
Not so at grs, which has a very clear policy – absolutely no additional fees or charges whatsoever. “The price of the vehicle is the price that retailers pay – it’s as simple as that,” says Danny.
He continued: “We pride ourselves on working in partnership with retailers, as we want to help them build their businesses and maximise every opportunity for profit. After all, if they’re successful then so are we, and if retailers are happy with our service, they’ll come back to us to buy more vehicles, and everyone benefits”.
In addition to its promise of no fees, grs offers retailers a range of added value services to make their lives easier, including consultancy from expert account managers and online access to the entire grs stock, which they can make their own once a customer is in the showroom – at absolutely no risk to themselves.
“We offer a tailored buying service for retailers. If they only want red Clios, that’s what we will source for them, though we will also advise them as to whether red Clios are selling strongly at the moment and will recommend something different if appropriate. We don’t charge additionally for that consultancy – it’s just part of our partnership approach.”
So what’s the secret of success for grs? “There really is no secret at all,” laughs Danny. “In fact, it’s about deliberately not having any secrets, especially when comes to additional charges!
“We have 15 years’ experience in the market, employ the best people in the business and have invested heavily in our Cold Meece logistics centre, which is the operational heart of our business. That all adds up to a service that retailers can trust and rely on to deliver, every time. It’s as simple as that”.