Fleet News

'Green' vehicles pose questions over residuals

FLEET operators investigating the feasibility of running alternatively-fuelled vehicles are having to grapple with the tough task of forecasting residual values. With no historical market in used 'green' vehicles, their residual values are unknown territory.

Indeed, their very calculation is problematic since price equality with ordinary-fuelled vehicles in the second-hand market actually represents a poorer residual value, because the proportion of 'retained' value is lower when the initial cost of conversion is taken into account.

Alex Wright, CMA's commercial vehicle manager, south, applauded manufacturer and fleet operator initiatives to implement low emission vehicle policies, but warned that residual values could suffer unless the refuelling network expands significantly. Mark Cowling, chief economist at CAP Motor Research, said: 'Vans are bought for working purposes, and a gas tank means the working space is narrowed slightly. This is unimportant if you only use 75% of the load space, but if someone wants to rack it out it creates another reason not to buy it.'

In a worst case scenario Cowling can see alternatively-fuelled vehicles worth the same at disposal as orthodox vehicles, minus the cost of converting them back to petrol or diesel power. In a best case scenario, CNG and LPG will continue to be cheaper than petrol or diesel, the refuelling network will increase and parts and servicing will become available across the country.

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