Lease return numbers could soon double the amounts seen just last year and one auction group, in particular, said it is taking measured steps to meet the surge in supply.

In the group’s latest newsletter, ServNet president Patty Stanley says the network of auctions is ready for the 2.5 million lease returns expected to hit the remarketing industry next year and the 3 million-plus returns predicted the year after that.

“Once thought to be nearing extinction during the downturn in the market, vehicle leasing has re-emerged with new vitality,” said Stanley. “The high number of new-vehicle leases written in 2010 was a positive sign that the economy was on the upswing, and as a result, we're seeing increasingly high volumes of returns hitting the market.”

“ServNet auctions in all parts of the country are reporting substantially larger numbers of lease returns this year over last, and all indicators point to a significant surge in volume in 2015, approaching 2.5 million cars and trucks,” she continued. “By 2016, forecasters are predicting lease returns to top the 3 million mark, nearly double the volume recorded in 2013.” 

Granted, such increases in volumes are not without challenges. But Stanley says ServNet’s auctions are prepared.

She points to the facility upgrades members have made, the technological upgrades as well as the fact that the group has been at the “forefront” of the multiplatform selling initiative in developing Hub technology. And the latter offers great exposure for these off-lease units coming in.

“Whether needing to process a single lease return to a thousand, any one of the 30 auctions in the ServNet auction group is prepared,” said Stanley. “With years of experience and proven success, each auction has a ready market, with a loyal, established buyer base and a team that stands ready to implement the most effective remarketing strategy.” 

One example of a ServNet auction’s adaption to increased volume has been at Flint Auto Auction, which has begun an expansion project, whose design is to end up adding 27 acres of vehicle parking space and 8,000 square feet of office space.

The auction bought two adjacent properties, kicked off construction this summer and will roll out phase II this fall.

“The timing on the property acquisition was ideal, allowing us to prepare additional acreage for the lease returns which are showing marked increases and will continue to expand into the coming year,” said co-owner Bill Williams. “In addition to making way for additional vehicle storage, we were also able to add 118 more spaces for customer parking, to accommodate the increasing numbers of people who attend the auction every week to buy and sell in the lane.” 

The new North Lot at Flint Auto Auction makes up the largest area of expansion. It includes 20 acres and is located about four miles from the main facility. It is utilized for storage and marshaling operations. There is also a 1,300-square-foot office on the property featuring offices for the Flint's Ally Financial and General Motors departments, as well as for the representatives for those accounts.

Phase II will include 8,000 square feet of office space for 18 offices, a conference room and a break room.  The auction’s marketing and accounting departments, IT, legacy floor plan, human resources and arbitration departments will be located there. 

“We're happy to report that at Flint Auto Auction we continue to grow our facilities right along with the services we provide to our customers,” said Williams. “We are proud of what we have accomplished in our 60-plus years of business, but our focus is on continued success for our remarketing partners.”