Fleet News

Marketwatch: Used van market looks set to stabilise

THE rate of decline in van residuals is set to slow, improving future prospects for fleets. A report by market analyst CAP suggests less RV risk for fleets with vans compared with recent years.

Key light van models are forecast to keep their value better over the next three years, with the least risky option being heavy panel vans with more powerful engines.

The leasing sector is increasingly exposed to RV risk when it comes to vans, because of market expansion, which poses the risk of over supply in the future.

Last year, an unpublished survey by CAP of the top 50 van fleets revealed that most of them were concerned about the impact of increased used supply, but planned to continue expanding in 2006.

CAP says growth in volume alone is insufficient to explain the recent weakness in used values for many vans.

Instead, it identifies the major factors as the aggressive pursuit of market share among some manufacturers and the impact of new vehicles creating wider choice.

But the future looks more positive for fleet portfolio values, assuming there are no unforeseen changes in market developments.

Used value reductions in the car-derived van sector are slowing and CAP foresees three-year residuals averaging about £100 below current levels in 2009.

Among heavy panel vans CAP differentiates between those with low and higher power outputs. The former are expected to reduce by almost £500 at three years/60,000 miles by 2009, while those with higher power outputs are expected to remain stable.

Senior forecast manager John Watts said: ‘Fleets are already well aware of the risks around increasing their LCV portfolios and this report suggests they will be able to write good business in a reasonably stable environment.’

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