Fleet News

Marketwatch: Falling van RVs could impact fleet costs

A RESIDUAL value crisis in the van market could change the nature of vehicle demand among fleets.

TLS Vehicle Rental says demand for used vans, especially larger vans and vehicles in poor condition, is dropping in auction halls, making it difficult for many fleets to achieve the residual values they estimated.

TLS’s view is supported by Glass’s, which reported that demand for used 3.5-tonne vans was falling, and that only the very best-presented examples stood a chance of selling for decent money.

Sean Welham, marketing director at TLS, said: ‘The used CV market has been buoyant for a number of years and this has helped persuade fleets that buying vans is a viable option.

‘However, over the past few months residual values have started softening, and many fleets are getting their fingers burned. Only the best vehicles are achieving book price, and buyers can afford to take their pick.

‘Losing out at disposal time can be especially traumatic for smaller fleets and one-man businesses. They were expecting a lump sum, probably to put towards a new vehicle, and it is suddenly much lower than they were hoping for.’

Welham said TLS is making some headway in convincing commercial vehicle operators to look at long-term rental as an option.

He added: ‘We are coming across instances in the last few months of small to medium-sized businesses which have suffered with van disposal and are now open to the idea of acquiring a vehicle in a different way.

‘In these cases, we believe that rental is a viable option and, while it is quite a mental shift for these businesses to make, we are achieving some successes. ‘What rental provides is simple – a fixed cost van where you only get charged for the time that you need it with no unexpected costs.’

Welham added that TLS has largely been insulated from the effects of softening RVs by its disposal strategy. He said: ‘We dispose of between 8,000 and 9,000 vehicles every year.

‘While it would be wrong to say that we have not had to work a little harder to achieve good prices, we are very much holding our own.’

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