Giving Customers an Offer in Hours. Paying them in a day. Leaving Them Free To Move On.
By Bill Bishop, Senior Vice President, FLD
Earlier this year, many of us who follow the wholesale used truck market were cautiously optimistic that 2020 would finally be the breakout year the industry has been looking for. In fact, I said as much – with a caveat for Covid – in FLD’s first quarter White Metal Market Report, a comprehensive market update we send to clients.
My how quickly things have changed.
In a few short months, the world has turned upside down, and companies everywhere are scrambling to survive in a challenging new world.
Taking Care of Customers, Keeping Employees Safe
Like most entities, FLD’s initial reaction to Covid was to ensure the health and safety of our employees, while maintaining a high level of service to customers. We are proud to say that since the first day of shelter at home orders, our operation has been fully remote, functional and delivering the same great service customers have come to expect for more than 40 years.
Since then, we have put policies like no-contact vehicle recovery and drop off in place. We’ve also quickly optimized our online tools, ensuring that customers can easily conduct the entire remarketing process through our WebAccess portal, or quickly prepare a vehicle condition report with our OnceOvr app.
Traditional Indications Turned Upside Down
Trying to make sense of traditional economic indicators that affect wholesale used truck sales has been a study in frustration. In June, the US Unemployment rate – which was at all-time lows in February – boasted highs unseen since the Great Depression. The price of crude oil is surprisingly low, while the strength of the US dollar seems to have stabilized. Meanwhile, the Housing Market may have slowed initially, but has shown surprising strength through May and June.
The Wholesale Truck Market Today
On a positive note, we have seen signs that the wholesale vehicle market is strengthening, and we are actively purchasing – and selling – vehicles every day, some at pre-pandemic prices and higher. And, while this is subject to change at a moment’s notice, there appears to be some encouraging trends emerging in this new market.
To begin with, most of the entities we dealt with before the pandemic continue in some capacity, and business is being transacted. Money continues to flow, and we have been able to move vehicles through the remarketing process without interruption since early March. As the only provider that protects sellers by purchasing end of lease vehicles up-front, our message is gaining traction with vehicle sellers who want to totally eliminate their remarketing risk.
The Future is Murky, but We’re Staying Positive
Gazing into the future, everyone’s crystal ball has gone from “fuzzy” to “shattered.” If someone tells you they have a definitive handle on where things are headed, we’d be highly suspect. With so many variables, FLD is simply focused on delivering the best remarketing experience possible, but there are a few of the things we anticipate going forward:
- Digital Dominance: The digital age will likely replace the simulcast era for most big box auctions and major FMC’s. Meanwhile, independents will probably lag their larger counterparts, as the tech investment required to compete in this brave new digital world is likely cost prohibitive for most.
- Rental Cars Under Pressure: The wholesale vehicle market will remain volatile as rental car companies struggle to right-size their fleets in the face of a slew of corporate travel restrictions and workforce rules. Without question, used vehicles will be near the center – if not the driving force – of these changes.
- Ride Share on Shaky Ground: It is unclear what the fate of rideshare and mobility companies will be, as the industry has grown like wildfire in just a few short years. Because of this, predicting the impact, much less the winners and losers, is difficult if not impossible.
- Credit to Tighten: Credit markets will almost certainly tighten soon, with large banks like Wells Fargo recently stopping auto loans altogether. As OEM’s attempt to restart production, we will continue to see only used vehicles available, with increased competition and premium prices for well-maintained models.
Count on Us at Every Turn
Everyone at FLD sends our heartfelt condolences to those who’ve been negatively affected by the pandemic. Our hope is that someday we can all go back to our “old normal.” Until then, you can count on FLD to give you an offer in hours, pay you in a few days, and let you move on to more important aspects of running the best fleet you know how!
Bill Bishop, Senior Vice President of FLD, is an expert on wholesale used truck marketing, and writes the White Metal Market Report, an in-depth quarterly look at the news, views and factors that affect wholesale used truck market.