Remarketing: Racking and residuals
Monday, March 21, 2011
Fitting a van with extras such as racking, tow bars and even a logo will have an impact on its second-hand value. Steve Banner asks several remarketing pros to assess the difference they can make.
Do extras such as load area racking, tow-bars and roof racks add to a van’s second-hand value? Not necessarily says James Davis, general manager, commercial vehicles at Manheim Auctions.
If internal racks and shelves look as though they’ve been knocked together out of bits of old plywood and angle iron, then it’s likely they will reduce a van’s used value rather than increase it, he says. That’s especially the case if they are blocking a side door.
“If a dealer is bidding at auction for a van that might normally be expected to fetch £4000 then he would probably look to pay at least £50 less for it if it’s fitted with that sort of equipment,” Davis says. “That’s because he would have to rip all that old plywood out before he could put the vehicle on his forecourt.”
Such a van might fetch considerably less if the bidder discovers that the previous owner has drilled holes all over the place to install a home-made storage system. Drilling holes can lead to rust unless proper anti-corrosion precautions are taken.
On the other hand professionally installed racking made by a well-known manufacturer may enhance a van’s value to the tune of £100 to £150 or more if it happens to be the sort of racking a private buyer wants. “This type of racking is of course often removed by the vendor prior to sale, refurbished, and installed in a new vehicle,” Davis says.
While somebody looking at a used car fitted with a tow-bar may steer clear of it on the grounds that the rear suspension has potentially suffered chronic wear, people contemplating acquiring a second-hand van do not necessarily think in the same way. Instead, says Davis, they are likely to view it as a useful feature given the number of van owners who tow trailers.
“As a consequence, a £4000 van with a tow-bar may fetch £25 to £50 more at auction than one that hasn’t got one,” he suggests.
Other used commercial vehicle specialists believe, however, that the presence of a tow-bar has a broadly neutral impact on values. It may harm them if a small van is involved, but may improve them if it’s a 3.5-tonner that’s in question.
Meanwhile, a ladder rack can boost a light commercial’s value, especially if it is fitted to a small panel van. “It could help to the tune of around £50 to £100,” Davis says.
Such racks are often associated with roof damage though, especially if they have been badly installed or if the driver is in the practice of clambering on top of the vehicle. That will hit residuals.
“Remember too that if a buyer doesn’t need a rack then they’ll have to take it off because of the impact it will have on fuel consumption,” says Alex Wright, managing director of Shoreham Vehicle Auctions.
These days the vast majority of sign-writing is applied using pre-cut adhesive vinyl, and it is essential that it is stripped off before the vehicle is disposed of, says Davis. The last thing you want is for your old van to be used in a robbery or a terrorist outrage with your name, address and telephone number still plastered all over it.
“If a vendor isn’t prepared to remove sign-writing then we ask them to sign an indemnity before we enter a vehicle that still has it on in one of our sales,” says Wright.
Some light commercials are completely wrapped in vinyl these days, and un-wrapping a van prior to disposal to reveal pristine paintwork underneath is likely to boost its appeal Davis says. “You could find that the purchaser will pay £200 more for it,” he says.
One feature that without doubt makes a van more saleable is a ply-lined load area says auctioneer BCA, because of the protection it provides against bumps, bangs
and scrapes. Ply-lining may itself only add £100 to the price, but its presence means that the van is likely to be in a more saleable condition after three or four years of hard work than if it were absent, says BCA’s UK business development manager, commercial vehicles, Duncan Ward. “An otherwise-clean van valued at £5000 could easily lose up to £1500 if its side panels are extensively blemished by inside-out damage,” he warns.
Wright agrees. “All vans should be ply-lined – unless they only ever carry pillows,” he says.