SANTA BARBARA, CA – Automotive Lease Guide (ALG) has launched ALG Fleet Residuals, a residual projection model for vehicles serviced in commercial and daily rental car fleets.
"Accurate projections of vehicle depreciation are an important aspect of maximizing fleet profitability," said John Blair, CEO of ALG. "ALG Fleet Residuals enable fleet professionals to predict vehicle depreciation, which in turn helps fleet managers learn lifecycle and seasonality trends and make more educated purchasing decisions."
ALG Fleet Residuals are based on historical trends of fleet vehicle auction resale performance and specific mileage adjustments for nearly new vehicles' depreciation trends, with a focus on seasonality patterns. The ALG model incorporates the impact of incentives (fleet and consumer), vehicle days' supply, and used-vehicle prices for one- and two-year-old models. New-vehicle fleet residual values are provided on a bimonthly basis in dollar or percentage format, and fleet managers can select terms between three and 48 months. Residuals are based on an annual mileage of 21,000; however, the basis can be modified from 18,000 to 30,000 miles/year.
The guides are updated every two months and are available at a cost of $200 per year in three formats: online, electronic data, or hard copy.
"In the future, we plan to continue to support this market with online tools that allow fleet managers to upload their remarketing results, evaluate the value of the residuals they have on their books, and compare their remarketing efforts to national average auction prices," said Jonathan Banks, senior director of ALG consulting.
Jonathan Banks is presenting at the Automotive Fleet and Leasing Association (AFLA) in Rancho Mirage, Calif., Sept. 14, 2006, and at the Fleet Industry Symposium in Atlanta, Sept. 20, 2006.
