Remarketing proceeds are received faster by companies that own their vehicles than by companies that lease or purchase their vehicles through a fleet leasing or management company. In a survey conducted by Automotive Fleet magazine, the time it takes companies, on average, to receive their remarketing funds was quantified.
On average, it takes just more than 18 days for the companies surveyed to receive their remarketing proceeds from the time a vehicle is sold. However, for companies that own their vehicles, the average time is nine days while for companies that lease their vehicles, the average time is 21.5 days.
Gary Treece is fleet administrator for Kansas City Southern Railway. His fleet of 523 vehicles is mostly owned, but some are leased. When vehicles go out of service, it takes more time to get remarketing proceeds from the leased vehicles, Treece said. “With the leased vehi-cles, there is more paperwork shuffling around,” he said. “After people bid on the vehicle, the lessor decides which bid to accept, and that takes some time. With our owned vehicles, we call the highest bidder right away and get a check within a day or two."
Connie Carpenter is fleet administrator for Quest Diagnostics in Tampa, FL, which leases its entire fleet. She agreed that an owned fleet gets remarketing proceeds faster. When her leased vehicles go out of service, “I have to fill out forms, fax or FedEx them to the leasing company, they have to pick up the vehicle, and take it to auction. If you own the vehicle, you're going to do eve-rything on a first-hand basis and take the vehicle to auction yourself.”
Although owned fleets may receive their remarketing proceeds faster than leased/managed fleets, some fleet managers feel the extra time is balanced by higher returns on resale values. “I don’t think the time I wait for proceeds to come in from my leasing company is unreasonable,” said Julie Olson, fleet director for Reedy In-dustries in Glenview, FL.
Olson has found that although the time to receive remarketing proceeds varies, payment is always within 30 days. “It is far more beneficial for me to have my leasing company handle my resales for me, and since I usually see the money within 30 days of the sale, I am perfectly satisfied with that time frame. The method used to remarket vehicles also affects the amount of time it takes to receive the remarketing proceeds.
With employee sales, there may be a noticeable delay before proceeds are received. “With employee sales, sometimes it can take two months or more to receive the payment,” said Deborah Melton, corporate fleet administrator for Family Dollar Stores in Matthews, NC. Melton, who oversees 485 vehicles for Family Dollar, must wait for drivers to return payment for the company vehicles they purchase, since 95 percent of the vehicles the company remarkets are sold to employees.
Melvin Pawlisz fleet administration specialist for Oce Printing in Boca Raton, FL, said that how long it takes to receive remarketing proceeds is pretty much out of his control. When a vehicle goes out of service, the employee has the first option to buy.
How long it takes to receive remarketing proceeds on an employee sale depends on how long it takes the employee to get the money to the leasing company, said Pawlisz, who manages 473 vehicles. “If the vehicle goes to auction, we usually get the proceeds the follow-ing month,” he said.
John Kam, fleet manager for SLI Lighting Solutions in Clayton, NC, oversees about 600 vehicles. Kam said he sells all the vehicles through his leasing company. SLI leases some vehicles and owns some. If a leased vehicle is sold, it appears on the monthly bill Kam receives from PHH.
If it is an owned vehicle, the lessor sends Kam a check. He said the time it takes him to receive remarketing proceeds depends on the area of the country where the vehicle is sold, and the time of year. “The Midwest and sometimes in the Texas area, it takes longer, but I don't know why,” Kam said. He also said he receives proceeds faster in the fall, with winter taking longer.
