Fleet News

BCA reveals residual-boosting options

New data from BCA has highlighted the must-have and nice-to-have options for commercial vehicles at remarketing time, from air-conditioning and alloy wheels, to parking sensors and ply-lining. 

BCA's Duncan Ward said: “Generally a better specification will make a van more desirable and saleable, and higher-spec vehicles will often sell the first time they are offered, improving cash-flow for the seller.”

Ward added: “When you are offering upwards of 400 vans in some of our bigger sales, you really notice how the buyers gravitate towards the best presented, well-specified vehicles.  If you are a professional buyer for retail, you know that certain vehicles will stand out on the forecourt and you want those on your shopping list.  In a similar fashion, the end-user buying at auction will seek out the best vehicle they can buy with the budget they’ve got – and if a van with two side loading doors, a bulkhead and aircon is on offer that will be the one they bid for, if all the other vans available are basic models.”

Item Nice or necessary? Added value
Ply lining Necessary £100+
1 side loading door Necessary £150
2 side loading doors Nice (but becoming necessary) £250
Factory satnav Nice £100
Bluetooth Nice £50
Parking sensors Nice £50
Aircon Nice (but becoming necessary) £100 - £200
Retail paint finish Nice - very desirable £300 - £500
Alloy wheels Nice up to £200

“When valuing options, it is important to remember that price is always relative to the current market conditions, the demand from buyers and the presentation of the vehicle itself.  For example, in the current market, if you offered a van with every option imaginable, but it was in poor cosmetic condition, any possible premium would be wiped out by the buyers’ concerns about the time it would take to repair the vehicle – when values are falling, time equals money!”

“Possibly the best value extra you can specify for your van fleet is interior ply-lining.  For a start, used buyers expect to see it and secondly it will protect your valuable company vehicles from the bulk of ‘inside-out’ damage they might otherwise experience during their working life. All sizes of vans benefit from this ‘extra’, from LWB High-roof examples to small hatchbacks.  In terms of added value, plylining might add £100, but the real benefit is that the van is much more likely to be in a more saleable condition after three or four years’ hard work.”

“Side-loading doors are the second key option for fleets to consider.  This option is as essential for smaller vans (Connect-sized, for example) as it is for the one tonne and 3.5 tonne van sectors.  A single nearside SLD is probably the bare minimum these days, while a van that is going to work in tight urban conditions would benefit from two side-loading doors.  Potential value in the used market can increase by around £150 for a single and £250 for two side-loading doors, depending on the vehicle.”

“Satnav is so ubiquitous now that it really is not the deal maker it once was – when you can get a fully functioning system for under £100 retail, or free of charge on your Smartphone, then there is little margin to be gained by having it.  That said, a good quality factory-fitted integral system might add £50 to £100 for the right buyer.  In-van entertainment and blue-tooth connectivity may add some value to a retail-standard vehicle, but any increase would be marginal – say £50.  Parking sensors are rare, but are valued in the 3.5 tonne market where low-speed reversing damage is more common – this feature might also add £50.”

Ward added: “Where cars go, vans inevitably follow and today’s extras will be tomorrow’s standard.  LCV operators should certainly bear this in mind when considering which vehicle to buy for their business.  It could well be worth investing a little more at the front end to get a well-specced example rather than a cheaper, but more basic model.  It is more likely to be in step with the next buyer’s needs when it comes to be sold again in three or more years’ time.”

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Comments

  • Graham Hubbard, Smartfleet Asset Management. - 25/06/2014 13:32

    Options alone will not improve residual values - a well presented car or van will inevitably attract more buyers and a better price, more often than not, achieving a sale at the first showing. When it comes to refurbishment, it is wise to select only necessary repairs (tactical) that will reflect a good residual performance.

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