Vehicle Remarketing Flashcards
Questions
Answers
7.2.1 What 6 activities are common when decommissioning a vehicle from the fleet? (p.93)
- Title Transfer
- Equipment Removal
- Fuel Sysem removal
- Certification
- Inspection
- Information System
7.2.2 What are some considerations that should be made when decommissioning a vehicle from a public fleet? (p.93)
- Public Image - Identifying decals, license plates and other markings should be completely removed.
- Liability - The government has a legal and moral obligation to use utmost care in identifying assets which should not be resold to the public and should be sold for salvage or destroyed
7.2.3 What are some considerations that should be made when decommissioning a vehicle from a private fleet? (p.94)
- Turn-Ins at Dealer process
- The vehicle being decommissioned will go through an inspection process by the driver
- Many times, the decommissioned vehicle may be dropped directly at an auction by the driver, with the same visual inspections being completed
- Decommissioned vehicles may go through a detailing
- Decommissioned vehicles may be offered for sale by the disposal entity to the driver of the vehicle
7.2.4 What are some considerations that should be made when decommissioning a vehicle from a utility fleet? (p.94)
(1) Testing. Vehicles with aerial devices should be tested to ensure compliance with Federal, State and Provincial standards.
(2) Maintenance records. On decommissioning, maintenance records of the vehicle should be copied and stored to prove that all necessary
maintenance was performed during the life of the vehicle.
(3) Warning labels. A final check should be done during decommissioning to ensure that adequate warning labels are still affixed to any
vehicles being remarketed.
7.2.5 What are some considerations that should be made when decommissioning a vehicle from a law enforcement fleet? (p.95)
- Equipment Life cycles: Each piece of equipment mounted in or on a law enforcement vehicle has its own life cycle
- Stripping
- License plates:
- Preparation for disposal
7.3.1 What is vehicle reconditioning? (p.95)
- Anything from simply washing a car to performing major mechanical and body work
- A general rule is that the reconditioning work must return at least 3 times the cost of reconditioning
7.4.1 What should a remarketing policy contain concerning the sale of vehicles to employees? (p.96)
- It should address pricing of vehicles sold to employees,
- Sales to employee’s immediate family
- Approval of repairs for a certain period prior to sale
- Time to pick up after sale, and other entity specific consideration
7.5.1 What is the Employee remarketing method and what are the benefits of using it? p.96)
- One of the least expensive methods is selling to Employees
a. Maintenance is upkept
b. particular concern is setting the price of the vehicle. Setting the price too low reduces the company’s return but setting it too high can delay the sale and be perceived as trying to “gouge” employees
7.5.2 What is the Auction remarketing method and what are the benefits of using it? (p.97)
- On Site:
a. This requires setting up your fleet location to be a sales point for both your own vehicles and those of other sellers.
b. requires significant space as well as accepting the liability of storing other company’s vehicles on your property. 2. Off Site:
7.5.3 What is the trade remarketing method and what are the benefits of using it? (p.97)
This practice is used by most dealers anywhere for both fleet managers and the general public buying new cars and trading in their old ones
One advantage of using this channel is that use of space is minimized as one vehicle is removed from the lot and one is added for a net gain of 0
7.5.4 What is the retail remarketing method and what are the benefits of using it? (p.97)
Though retail can bring in higher revenues it does require added time, costs, and expertise
7.5.5 What is the direct remarketing method and what are the benefits of using it? (p.98)
Direct sales involves finding a certain target whether it be an organization, demographic, or individual
7.5.6 What is the third party remarketing method and what are the benefits of using it? (p.98)
Third party is one of the easiest ways of selling vehicles however it may give the lowest return
Selling through a third party is the best option when vehicles need to be moved quickly
7.5.7 What is the Internet remarketing method and what are the benefits of using it? (p.98)
A significant advantage of this method is that the market is expanded globally.
7.5.8 What is upstream remarketing and what are the benefits of using it? (p.98)
This involves selling vehicles as a dealer or while still in service
The Fleet Manager begins to know when the buyer is looking for vehicles, and can target the vehicles to this buyer to maximize revenue.
7.6.1 What is the difference between effective depreciation and book depreciation? (p.101)
Effective depreciation, the actual value of the vehicle consumed in use (net acquisition cost - net resale value)
Book depreciation is the total acquisition cost - estimated residual value of the vehicle at replacement
7.7.1 What is the goal of a fleet manager when selecting a vehicle? (p.102)
The ultimate goal of a fleet manager is to buy a vehicle that does the job, has the highest resale value, and has the lowest operating cost.
7.7.2 What are the two factors that dictate effective depreciation? (p.102)
the expected “useful” life of the vehicle and the approximate market value of the vehicle at lease-end
7.7.3 In general, what are the differences in planned vehicle life between government fleets, private fleets, executive fleets and leased fleets? (p.102)
- Government fleets: this period may be longer.
- Private fleets: 36 months is the average period
- Executive fleets: 36- or 40-month lease is typical
- Leased Fleets: a longer write off period is the norm, since it will help lower payments.
7.7.4 What should be considered when deciding to sell a vehicle in order to minimize effective depreciation? (p.103)
vehicle’s age, mileage, condition, time of year, regional differences, etc., in order to optimize value and, thus, minimize depreciation
7.7.5 Know how sale price volatility can affect various vehicle classes. (p.103)
- compact cars tend to have a wider seasonal swing in prices than do mid-sized cars
- Over the past few years, luxury cars exhibit the greatest price stability
- Vans and minivan prices represent one of the weakest segments in the used-vehicle markets since the late 1990s
