Van manufacturers had a perfect storm back in 2020/2021 – the global pandemic meant that many had to shut down production of vehicles and, even when they were in a position to restart, a worldwide semi-conductor shortage meant that they were either unable to build or, at best have to produce vehicles missing some standard equipment. This left fleets having little choice but to hang on to vans that had reached the end of their originally intended lifecycle of three, four or five years, putting them into unchartered territory with regard to maintenance costs and, for those which wholly owned their vans, the eventual residual value.
Feedback from operators was generally positive, with most fears of high service, maintenance and repair (SMR) bills proving unfounded. This has led to some fleets now revising their policies and lease agreements for new vehicles being set for longer periods from the outset.
According to research carried out by Arval Mobility Observatory, 16% of fleets are now operating vans that have had a previous owner and 40% intend to adopt this policy in the next three years. The survey indicated that the trend was broadly consistent across businesses, whether they had fewer than 10 employees or over 1,000. Although this shift can be partially explained by a positive experience of running a higher mileage, older vehicle, there can be little doubt that the soaring cost of new vans is prompting businesses to explore other options.
The positives are clear. A used vehicle will almost always be cheaper to buy than a new one, that initial period of heavy depreciation having passed. Generally speaking, there is a reasonable choice on the market at any one time, and as warranty periods gradually get longer, there is the chance that the vehicle will still have an element of manufacturer support. Although lead times for new vehicles have improved over the past year or so, there are still lengthy waiting times for some, and tracking down a suitable used van or pick-up could take as little as days. This could be critical in the case of an unexpected loss of an existing vehicle due to theft, accidental damage or a breakdown that is uneconomical to repair, meaning that the potential cost of hiring a vehicle in the interim period is avoided.
But there are a number of potential pitfalls that make the choice of buying new or used less straight forward. Commercial vehicles are worked hard. Often, it won’t be obvious what type of operation the van has been subjected to, especially if it is being sourced from a retail dealer who will have ironed out most of the usual visual clues of a previous hard life when preparing it for the sales forecourt. This can lead to mechanical and other issues becoming apparent, often after any dealer or manufacturer warranty has expired. Most LCVs do not require an MOT test until they are three years old, and so a used buyer will not enjoy all or even any of this ‘worry-free’ period. Buying even a three-year-old van from a retailer with a 12 month test certificate means that the purchaser only has a year before they are required to put a four-year-old vehicle with possibly significant mileage through a test. As the vehicle gets older, more expensive routine service items can become due, such as a replacement timing belt, for example, which alone can cost over £1,000 to have carried out.
A used van may not have two keys (they can now cost hundreds of pounds each to replace) and often the service history is patchy or even nonexistent, leaving question marks as to how well it has been looked after. If the vehicle is still under the manufacturer’s warranty, a dealer may refuse to carry out warranty work if proof of previous services is unavailable.
A reputable dealer is unlikely to knowingly offer for sale a vehicle that has had previous serious accident damage but there is always a possibility that a major repair has been carried out and not recorded on any condition report.
Duty of care is placed on any employer requiring their employees to drive a company vehicle. Recent advances have seen vans being fitted as standard with a high level of safety and driver aid technology, designed to keep the driver, passenger, other road users and pedestrians safe. Legislation is being updated to make fitment of some of this tech mandatory in new vehicles. The older a vehicle is, the less chance that it will have much, if any of the latest aids and there could be an argument that an employer is cutting corners and not prioritising the welfare of its staff.
Although a small business may only need to source a vehicle once every one to three years, a medium or large fleet operator would need to take into account the time it will take to track down and source a number of suitable vans. These are likely to come from various sources, bringing logistical challenges into play.
Many businesses now contract hire new vehicles. The lease company sources the van, delivers it and at the end of the contract disposes of it. It’s unlikely that a used vehicle will be available on a lease, so the operator would have to find an alternative method of financing it, utilising an additional credit line. Deposits may be higher, the entire VAT element may have to be paid upfront (rather than on each lease rental) and the business may want to spend time shopping around for the best interest rate. Businesses accustomed to having the lease company take care of disposals would need to make plans to eventually sell or part exchange these owned, used vehicles.
So, if taking all the pros and cons into account a van operator decides to venture down the used van route, where do they obtain them from?
Previously, many might be tempted to venture into the auction halls and risk buying a vehicle ‘as seen’, but from a trusted vendor such as a lease company. Unfortunately, the major auction houses no longer allow non-motor trade individuals or businesses to buy, so this avenue has essentially been closed off. Some lease companies will re-market their vehicles directly to end users, but viewing may be difficult, if not impossible and understandably many will not buy a van unseen. There’s no avoiding the online market place, with portals such as Auto Trader having an excellent search system making it easy to track down the vehicles required. For those wanting peace of mind, a dealer with a good reputation selling a van with provenance, with all pre-sale preparation done, with a warranty and decent aftersales back up is probably the safest option.
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