Small businesses should adopt big business best practice to save money when they sell cars.

That’s the conclusion of a new report written by Professor Peter Cooke.

Called ‘Rethinking Used Business Car Disposal Strategy‚’ Professor Cooke reckons “a lot of money is wasted by poor disposal methods.”  He suggests that a car costs £10 per day between the end of its use and the time it gets sold.

“This covers the cost of storage, the use of capital, further depreciation and so on,” said Professor Cooke.

Using traditional disposal methods – such as selling privately or to used car buyers – takes on average 40 days. That’s a cost of £400.

Using an auction to sell the cars takes just 14-16 days. That’s a cost of £160, and a saving of £240 per car over traditional routes.

“Small businesses that own their business cars should sit down and review their policy. A lot of emphasis is placed on the front end cost savings of acquisition. But not enough on the back end cost savings at disposal. The money clawed back here can add to the bottom line. It should not be ignored,” commented Professor Cooke.

“All the major leasing companies and major dealer plcs use auctions for disposal. That’s a best practice lesson from which small businesses could learn.”

Professor Peter Cooke is the KPMG Professor of Automotive Industries Management at Nottingham Business School.

The report, which was researched and written independently by Professor Cooke, has been sponsored by BCA Vehicle Remarketing.