Fleet News

Market watch: Shortage of LPGs affects price

A LACK of LPG-powered vehicles entering the used car market is putting professional buyers off choosing those that do go up for sale, fleets operating the alternative fuel vehicles are being warned.

A new study from remarketing giant BCA suggests that LPG has a long way to go before capturing the hearts and minds of professional auction buyers.

The company questioned a cross-section of buyers and canvassed their opinions on LPG and diesel, with the results showing that many are put off LPG, believing examples are difficult to source, value and retail.

BCA’s commercial strategy and communications director Tony Gannon said: ‘Professional buyers are ambivalent about LPG because they don’t see high numbers of these vehicles reaching the used market, which makes it difficult to gauge demand.

‘When they can buy diesel power which has all the right connotations for the end-user – economy, value and desirability – the view is almost ‘why bother with LPG?’. In the case of LPG, our experience is that resale value is closely linked to engine capacity and the type of installation used, along with the more familiar factors of age, condition and mileage.’

Although there is a ‘select market’ for LPG, BCA says the price they fetch is not comparable to similarly-specified diesel models.

Gannon added: ‘High specification vehicles fitted with direct injection LPG units achieve a price parity with comparable petrol-driven examples, providing the mileage is not excessive.’

Buyers were asked to rank the following criteria for valuing an LPG vehicle. Age, mileage and whether the LPG system was manufacturer or retro-fitted were joint first, condition/presentation was second and make/model was ranked third.

Professional buyers were asked anecdotal evidence on when they might buy LPG in the future. Their responses included ‘only to a customer pre-order’, ‘if it seemed cheap enough’ and ‘to offer a retail alternative to diesel’. Gannon added: ‘There is an element of the chicken and the egg for LPG – if there were more, purchasers may feel more confident to buy.’

The company was keen to stress that fleets operating LPG should not despair at its findings. Gannon said: ‘The few examples we handle all seem to find buyers if valued in line with market expectations. The message for fleets must be ‘be green to be good’, but don’t expect to see a financial return at remarketing time for being eco-friendly.’

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