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Fleet Disposal Methods
Written by Jerry Mumford
The North Carolina Highway Patrol operates 2,200 vehicles and purchases between 500 and 600 vehicles a year. This also means that we sell between 500 and 600 vehicles a year. Patrol vehicles are typically taken out of service at 75,000 miles.
Many options exist to dispose of patrol vehicles, including professional auto auctions, private auctions open to dealers, public auctions open to all, private auctions to select parties, trade-ins to local dealers, direct sales to taxi companies, online auctions, advertised sealed bids, and direct sales to the public. Other options probably exist, as well.
The best disposal method is based entirely on the limits imposed by your department. My advice is to challenge these policies! Look into all of the options, and then choose the one that works best for you under ideal circumstances. The best method of disposal is the one that offers the greatest return of money in the shortest time with the least effort or resources expended.
If your department does not have any limits or restrictions, research the best practices of other agencies. Consider benchmarking similar agencies, especially if they share the same fleet size, the same kind of jurisdiction, or the same geographic region. Learn from the successes of others. Find out who is doing it right. For the NCHP, we use direct sale to the public on an open lot.
The Right Person
To get started, be sure to involve the right people. In some cases, the fleet manager may be the best choice, while in other cases he might actually be the worst choice. In a smaller department, the chief or sheriff may be the best choice, though not necessarily. Instead, the right person could be the shop foreman or possibly the chief mechanic. It could be the jail commander or even someone outside of your department but (obviously) still with your government entity.
Then choose the best allowable method. Check around. See who is doing what. Gather data and get actual results. Budget up front and stay on task; plan the work and then work the plan.
Prep or Not Prep
Make presale preparation decisions. Should you detail the vehicle? If it costs $100 to detail it and compared to your non-detailed cars, you average $500 more, the answer is obvious. You need hard numbers here, real before and after numbers.
The same goes for repainting the two-tone to a solid color. This may cost $300 to $500 on a car that you have just taken out of service. That’s a lot of money for a car you will never see or use again. However, if the freshly painted solid color car gets you $1,000 more than your scratched and scraped two-tone car, again the math is clear.
How about new tires, brake pads, and freshly turned rotors? You can use inexpensive tires, aftermarket retail pads, and your own shop can do all the labor, but again, be sure to do a cost-benefit analysis. Some jurisdictions require tires and brakes on a car sold by a government entity to pass a safety inspection, but most are sold as-is and don’t require this. Does the investment more than pay for itself? If so, then do it!
At the minimum, have a copy of each vehicle’s maintenance history in the car. A known commodity, even if it is not the best news, is always more valuable than an unknown commodity.
Car Lot Sales
Placing an ad in a local newspaper or running it in a regional auto trade magazine can be an effective way to sell a car. Also, consider using auctions on the Internet to sell your car or placing an ad on the agency Web site to attract interest. The Idaho State Police have been very successful with eBay auctions, while the Missouri State Highway Patrol has had success with its Web site ads.
What works well for the North Carolina Highway Patrol and the California Highway Patrol is the car lot approach. We sell our used police cars on municipal property. And we consign our used police cars with local car dealers. We currently do no advertising whatsoever, but the Web site has info on how to buy the cars.
Fast turn around on used cars is important! The quicker the sale, the better. You lose money if the car grows another model year older before you can get it sold.
Pricing must be consistent with the year, mileage, and condition of the vehicle. We price our vehicles at the NADA average LOAN value, not the retail, and not the wholesale. We price it for what a prospective buyer could get a loan on it with minimal down payment. This price is clearly marked on the windshield of each vehicle in bold and bright colors. Also marked on the windshield is the model year and odometer reading.
The price marked on the vehicle is simply not negotiable. However, we do offer tier level discounts to all buyers. Typically, we allow a 5% discount for single sales of 10 to 49 units and a 10% discount for sales of more than 50 units. Discount pricing is also available to other government agencies and to repeat buyers.
The CHP has one main location for E-class sedans, pickup trucks, and SUVs at its academy grounds outside of Sacramento. The NCHP has nine different locations throughout the state with a car lot at every state police barracks, troop, or post. And, we move the cars back and forth to the locations that happen to be selling well at any one time. No state funds are used for this vehicle transfer. If a trooper is already scheduled to travel from one location to another, that trooper drives over in one vehicle and back in another.
After the sale, we survey the customer. We ask, “How did you find out about us?” and offer options such as by newspaper, Internet, word of mouth, or drive-by. We ask, “What attracted you?” and list price, condition of the car, and size of the car. We also ask the customer about what we can do the help him, whether it be better shopping hours or more detailed maintenance history. We also ask what the customer would change about the sale, if anything, such as light prep work of new belts, oil change, new paint, new tires, or new brakes. We conclude our survey by asking, “Would you buy from us again and why?” to determine the level of customer satisfaction.
Lieutenant Jerry Mumford is in the Technical Services-Logistics Section of the North Carolina Highway Patrol. He can be reached at email@example.com.
Published in Police Fleet Manager, Jul/Aug 2006
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