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Warning over mileages and misleading residuals

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Van manufacturers are under-estimating the mileage their products cover during their lives, resulting in misleading residual values.

That’s the warning from RV experts EurotaxGlass’s, which says the commercial vehicle sector needs to take a more real-istic approach instead of benchmarking unrealistically low mileages.

Most van manufacturers are primarily carmakers, and typically calculate RVs for commercial vehicles over three years/60,000 miles.

But with the majority of panel vans covering upwards of 30,000 miles a year, this is resulting in glaring inconsistencies.

“The industry yardstick for average mileage falsely favours those less robust products that will survive intact to a modest mileage, but would fare far worse as the 100,000-mile mark approaches,” said George Alexander, EurotaxGlass’s chief commercial vehicle editor.

“The need is to determine values for hard-used vans at
the end of a contract and not for the cleanest, most popular models, with modest warranted mileage.”

Mr Alexander said using a yardstick that fails to reflect the norm was wrong, and urged the industry to use real world data.

“Prices can then be adjusted upwards for those rare examples that are as clean as a whistle, having covered fewer miles, and will all but sell themselves,” he said.

“In the current marketplace, stock which has covered 60,000 miles or less is in great demand and will command strong prices.

“The danger is that, if an assessment of future residual worth for competing products starts from such a point, there is little chance that stock returning with 90,000 miles or more will have a chance of meeting vendors expectations.”

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