substantially from the car market and complicates the assessment process. Philip Nothard, insight director at
Cox Automotive, says this is one of the reasons why a van grading scheme has taken so long to establish. “A car has a shell, four wheels, a bonnet and a boot,” he explains. “In the most the basics of terms, it [appraisal] is fairly standard from one car to another to another.
“The challenge is the complexity of a commercial vehicle… 90% of the time, a commercial vehicle is for an end user. It’s a work tool, and there are elements of a commercial vehicle that are more relevant to the user than the condition. You get a vehicle that’s ply-lined or it is not ply-lined. Is there a bulkhead or not? Has it been a BT van? What do you appraise on a tipper truck? “How many appraisal templates do you have to cover the complexity of the commercial vehicle marketplace? Let’s take it from digital to paper: How many sheets of paper do you have to do an appraisal? All the various types – not derivatives – the types of commercial vehicles. That’s the bit that they’ve got to get around.”
Grading is conducted by NAMA- trained inspectors who examine the vehicle and make a note of its
condition. As Hill explains, assessors are responsible only for the recording aspect because the grade itself is concluded by NAMA’s software. “The common misconception is that a vehicle inspector determines what grade a vehicle is, which is absolutely not true,” he defends. “A vehicle inspector is highly unlikely to know what grade a vehicle is, even when he or she has completed the inspection… literally, all they’re doing is recording the damage – ‘I’ve got a 30mm scratch there and a 20mm dent there’ or whatever it may be.” Inspectors will then punch their findings into the auction company’s software, which generates a grade based on NAMA’s data and algorithms. “In round numbers, there are about 10,000 different matrix components,” says Hill. “For want of a better term, all of those get put into a machine, which says, ‘right, this is the grade for that vehicle,’ so everything’s predetermined. There are some really minor elements that on their own wouldn’t affect a grade, but if you had 10 of them, then they potentially would. There are also some fairly major elements – structural parts of the roof panel, for instance – that would affect the grade right from the outset.”
NAMA claims the scheme is applied to more than 90% of cars sold at auction, which is said to have equated to more than 10 million units since its inception. The scheme received the King’s Award for Enterprise in April this year.
Remarketing companies have previously told What Van? that they sometimes employ ‘tactical refurbishment’ to prepare vehicles to a particular grade to boost their value and improve their chances of a first- time sale at auction. This might involve, for example, relatively low-level body repairs to bring a vehicle from a grade four to a grade three, which would increase its appeal to buyers and its potential sale price for a nominal sum. Despite its accolades and now
industry-standard status, NAMA’s car grading scheme has come under fire in the past, with some claiming the grades can be inconsistent and unreflective of the vehicle’s condition. Speaking to What Van?’s sister publication Business Car on condition of anonymity in 2019, a senior auction company manager said: “We still get feedback that a grade A (one) in one site can be a grade B (two) somewhere else – and it could even be a grade C (three). So, the application of it is still
a problem, but the need to have it is becoming more prevalent.” Car grading has been refined over the years and training has increased for those applying it. Though not without its flaws, remarketing specialists generally acknowledge that an industry-wide programme is superior to an alternative whereby individual auction companies are left to create their own standards. Nonetheless, it continues to be divisive among buyers and sellers alike. Nothard believes the same is likely to apply to van grading and, as with cars, some teething trouble is to be expected, but the scheme has been too long in the works to wait much longer. “Car grading has been going for
11 years. It’s had various changes and developments, and still today comes under scrutiny in terms of its accuracy and subjectivity. You’re going to get that for commercial vehicles and you’re probably going to get more of it. But… it’s taken 15 years’ worth of discussion, debate and shutdowns and we’ve still not done it. “How long do you take to try and perfect something? Do you actually not do it, or do you do something and work through it once you’ve done it? I think the decision has to be that you work through it.”
As part of the event held by NAMA, used LCV buyers and sellers examined five vehicles that represent the proposed scheme;s categories.
@whatvan
October 2023 WhatVan?
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