Fleet News

Why cheap vans cost more in the long run

THE residual values of many commercial vehicles on the used market are weaker than necessary because some fleets fail to pay sufficient attention to the needs and expectations of used vehicle buyers.

Glass's Information Services is warning that snap decisions by fleets to buy vehicles cheaply rather than assessing what specification will sell well on the used car market is costing them money.

George Alexander, chief editor, commercial vehicles at Glass's Information Services, said: 'Omissions only store up big problems for the future. Far too often, the worst residual performances accompany those occasions when fleet or rental customers were 'encouraged' to buy new vans with non-turbocharged engines or without power-assisted steering.'

Although the highly discounted prices offered to the first owners may persuade them to take vehicles with unsuitable specification, it is not always enough to compensate them for the financial loss suffered at disposal, he argued.

Alexander added: 'Some manufacturers persist in acting in a high-handed manner, producing vans for the UK marketplace that do not always meet our domestic needs and preferences.

'The consequence of this is that otherwise excellent, newly-designed vehicles clog up the auction halls for weeks, acting as a drag on the used market and adversely affecting the reputation of certain marques.'

Glass's points out that buyers themselves can also do more to protect the future residual value of vehicles they buy from new.

For example, using permanent signwriting can only harm the used value of a vehicle. Removable vinyl decals are a much better solution, says Glass's. Colour should also be considered carefully by more of the UK's buyers.

Alexander said: 'White is clearly the safe choice, but silver can also now prove popular, so long as the numbers on offer are low.

'Dependent upon the load and use the vehicle is to be put to, a plywood lining is certain to prove to be a wise investment, as dents caused by unsecured loads are sure to damage its sales prospects. Keeping the interior, as well as the exterior, clean is a task that should not be allowed to slip.'

Glass's says there seems to be an unstoppable trend for higher engine power in 3.5-tonne vans, with anything sub-100bhp being considered as gutless, which the residual value expert says in 'somewhat unfair'.

Ford's Transit T280 illustrates this when the comparison is made between 74bhp and 99bhp. Glass's, in its Guide to Commercial Vehicle Values, suggests just £500 in favour of the more powerful offering. However, the T280 74bhp may fall behind the indicated guide value, whereas the T280 99bhp may often rise above it.

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