The value of getting the right kit for second service

Date: Thursday, February 26, 2015   |   Author: James Dallas




Used buyers are increasingly demanding more equipment on their vans, but what are the options that make most sense? James Dallas finds out




In the not-too-distant past, when it came time to renew the firm’s LCV stock, the fleet manager would be inclined to scroll down to the base-level model and put in an order for required number.

Anything more generously kitted out was likely to be the preserve of owner/drivers or, possibly, small businesses.
But with vans increasingly converging with their passenger car stablemates in terms of interior styling, and with operators and drivers demanding higher standards of practicality, refinement and comfort, the situation is changing. But do spec-laden vans fare better when it comes to remarketing time, enabling vendors to claw more back for their bottom lines?

Duncan Ward, BCA head of LCVs, certainly thinks so. He believes up-speccing commercial vehicles at acquisition time can deliver benefits to operators by making them more desirable in the used market at the end of their first working life.

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

Ward continues: “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.”

But George alexander, Glass’s CV editor, adds that too many extras can have a detrimental affect.

“This can limit the suitability of an LCV when subsequently it is offered to a business that might have very different needs to those of the first owner,” he says.

He also points out that when a model moves out of warranty, the cost of maintaining certain optional features can render it less desirable. The same is true for a chassis with specifications that fundamentally and permanently change that vehicle’s functionality, such as glass frails, personnel lifts and most bespoke coach bodies.

Internal racking systems that have resulted in a lot of holes being drilled into the structure, preventing it being returned to its original form, are also not welcomed.

“LCV residual values are best supported when the vehicle in question appeals to the maximum number of potential buyers, and it’s true to say that less is often more,” alexander says.

Ward cautions that the value of options is relative to the condition of the vehicle itself – in other words, a shabby van will always struggle to sell even if offered with every conceivable addition.

BCA draws a distinction between options that operators consider essential on a used van and those that are merely preferable to have included.

Ward cites ply-lining as the most in-demand value extra for vans, saying it protects load bays against most inside-out damage and helps to ensure stock is in a saleable condition after years of hard work. a near- side side loading door is another must-have, while doors both sides are extremely desirable for vans working in tight urban environments.

 

Alexander agrees: “For standard panel vans, being ply- lined and having a side loading door is a must if this vehicle is to sell at its full worth.”

Ward says satnav has become so ubiquitous that it is no longer the deal maker it once was, particularly with smartphones now offering the service free of charge. Nevertheless, he admits an integral, factory-fitted system could add up to £100 to the sale price. In-van entertainment and bluetooth only provide a marginal uplift, he reckons, while reversing sensors attract more interest on larger vans.

Air-conditioning is a valued feature but only when combined with a bulkhead, Ward warns: “Otherwise, all that cool air dissipates into the load area and simply burns money.”

Likewise, aircon is little use for a van working in a stop-start delivery role, when the driver is frequently getting in and out of the cab. but for longer-distance work, or in vans doubling
up as the family vehicle, it makes more sense and can hike up value, especially on well-presented “retail vans”, according to Ward.

However, David Hill, LCV valuation manager for vehicle data supplier CDL Vehicle Information Services, and a Vehicle remarketing association member, takes a different perspective. He says: “Smaller vans sell better with more options as they attract more owner-drivers, but aircon is

the number one value-adding option. Larger vans are more likely to be run by a company, so options are less attractive.”

Matthew Davock, head of LCVs at Manheim, distinguishes between van market sectors.

“In the small, light and medium van sectors, the most valued options for buyers are aircon, metallic paint and satnav, all of which have a positive impact on value,” he says.

“Alloy wheels are also desirable on the small and light van sector, but the impact this option has depends heavily on the return condition – poor treatment of wheels or metallic paint, for example, can add to the buyer’s preparation costs, having a negative effect on both values and demand.”

When it comes to large vans Davock says aircon, metallic paint and satnav are, again, valued highly, but believes beacons, towbars and slam locks have a negative impact on value, as 95% of buyers prefer to remove these features.

“The 4x4 and lifestyle vehicle sector has seen the largest shift in demand for added options,” he claims. “This sector is moving at a fast pace and 4x4s with added options are seeing the strongest demand. Positive options such as leather interior, satellite navigation, automatic transmission, bull bars/running bars, and tops for the rear are a must in the buyers’ eyes.”

Alexander explains that although some options may not increase value dramatically, they can help to shift models.

“Currently, satnav, bluetooth and iPod connectivity are considered as nice-to-haves, whilst aircon is expected, especially when it comes to 4x4 pick-ups. Here, despite the extra market worth attached to each of these options being relatively low, the point is that the vans boasting such kit will fly away whilst the most basic models can stick,” he says.

Self-employed traders are always attracted to vans bristling with trim and finish, claims Ward, who highlights the success of Vauxhall’s Sportive versions and ford’s Sport Vans.

“A good retail colour could add £300 to £500 on the right van, when compared with a standard white finish, and if paired with a decent set of alloys add another £200,” he says, and argues fleets should consider specifying retail style vans from new for the returns they can deliver at de-fleet time.

Corporate colour schemes are a definite turn-off to used buyers, and vinyl wraps, which can be removed before sale, are becoming increasingly popular to deliver the branding message.

 

 



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