What Van? Britain's biggest and best van buyers' guide

What price the special ones?

Date: Friday, July 1, 2016   |   Author: James Dallas

Light commercial vehicle manufacturers tailor their model line-ups to target different areas of the market with prices and specifications aimed at attracting distinct customer sectors.

For example, entry-level base models with few concessions to driver or passenger comfort or exterior style such as air-conditioning or alloy wheels would traditionally be the versions snapped up in volume by large fleets while flagship models laden with all the bells and whistles would set out to turn the heads of retail customers and owner/drivers.

The appetite for higher spec derivatives would seem to be growing, at least this appears to be how manufacturers perceive it in their eagerness to launch special edition models – think of the VW Caddy Black or the Isuzu D-max Centurian to name but two.

At the same time more trim levels are being offered in the mainstream line-ups, Nissan, for example, has added an extra option, the N-Connecta, to its NP300 Navara range to sit between the Acenta+ and the flagship Tekna.

But what do used buyers make of higher specification and sports versions of LCVs?

Tim Cattlin a consultant to the LCV industry and residual value specialist, says:

“As a rule, flagship models are extremely sought after by the used market.”

This is illustrated, he says, by the fact that prices for top of the range vans have a “glass ceiling” that bear no relation to their more run of the mill stablemates.

However, he adds that in order to attract top dollar the model range must have market appeal to start with – like the Mercedes Vito, VW Transporter or Ford Transit Custom, for example.

“More utilitarian vans, which are more functional than stylish and don’t have a particularly strong image or appeal are far less likely to be in demand and as a result any price premium will be modest,” Cattlin explains.

“The typical used buyer will pay a premium for a nicely specified van that is on a par with the specification in his car.” says Andy Picton, senior commercial vehicle editor, Glass's.

“Manufacturers will now actively offer two or three trim levels – a base model, a mid-range and a top end retail offering with plenty of kit - precisely to target all potential customers. And as the trim level increases, so does the RV.”

Picton also makes the point that customers buying a new high spec van on a finance lease will find that, due to the enhanced RV, the monthly rental is  more affordable. However, he cautions that within the next two years supply could outstrip demand putting downward pressure on RVs.

BCA's director Commercial Sales Duncan Ward explains why flagship vans appeal to trade buyers: "High spec sports derivatives are an attractive proposition for professional buyers because they know there is a ready retail audience for these vehicles.  For many small business van buyers the company van is their most effective billboard and a well specified van in a good metallic finish sends the right message to their customers."

Cattlin argues that by opting for sports derivatives operators can not only enhance the image of their business but reduce the holding costs (depreciation) of their vans.

But he stresses the caveat is that on resale good condition is paramount.

“If the business is generally hard on their vehicles and the interior or exterior condition is likely to suffer then the residual value they achieve will be severely affected – far more so than on a ‘standard’ van.”

Alex Wright, boss of Shoreham Vehicle auctions, takes up this point.

“Any cosmetic or mechanical damage to spoilers, body kits or alloy wheels will be more expensive to repair than a mid-range version of the model. They will attract higher RVs, but this will be offset by the higher outlay to maintain and repair the vehicle,” he says.

Ward agrees: “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 and investment necessary to bring that vehicle to retail condition.”

A trader buying from auction will steer clear of an LCV, which otherwise might be very desirable, if its metallic paintwork is scratched, its alloy wheels scuffed or its cab interior dirty. Likewise, they will often sidestep vans without a full service history.

Another factor to bear in mind, according to Cattlin, is that the capital cost of flagship vans is high because they are discounted far less at new than standard models.

Ward says it may not be appropriate to fill a sizeable fleet with top of the range editions but contends a small selection can offer diversity and interest for buyers at remarketing time.

He says in BCA’s larger sales buyers gravitate towards the best presented, well-specified vehicles because they know they will stand out on the forecourt.

“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,” says Ward –

“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.”

When it comes to the most desirable bits of kit owner-drivers and small businesses are likely to prioritise air-conditioning. Cattlin says in many cases most of the additional cost the original owner spends on air-con can be recouped on resale. He claims many fleet operators recognise this and specify air-con purely to boost RVs. Reversing sensors are also sought after, firstly because the vehicles are less likely to have suffered previous damage and secondly so the new owner can protect their asset from manoeuvering dings. Ward says parking aids are most looked for on 3.5t vans and calculates they increase value by about £50.

Sat nav is increasingly common but still has some appeal but sophisticated media systems are much sought after.

But the most essential piece of kit (to guard your high-class commercial against inside out damage) is ply-lining, Cattlin says.

Cattlin reckons alloy wheels, while popular on medium-sized and smaller vans, are less valued on large vans because of their more utilitarian nature.

He names the lifestyle pick-up sector as being by far the most sensitive to specification and trim levels, “very much akin to the car market”.

Next in line is the medium panel van sector, particularly the Transit Custom, Transporter and Vito, which is becoming increasingly competitive, according to Cattlin.

“Smaller vans less so and at the bottom of the pile larger vans due to their utilitatian, workhorse nature,” he concludes.

Picton concurs and adds: “Large panel vans with car-like or sporty specification are generally not well received due to the hard work they are put through and the resulting damage they sustain.”

Ward sums up: “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.”

 

HIGH SPEC COMMERCIAL OPTIONS

ItemNice or Necessary?Added Value

Factory Satnav Nice £100

Entertainment/Bluetooth Nice£50

Parking Sensors Nice£50

Aircon (with bulkhead) Nice (but getting necessary) £100 - £200

Retail Paint Finish Nice (very desirable) £300 - £500

Alloy Wheels NiceUp to £200

Digital Connectivity. Nice. £50 - £100

Source: BCA

 

 

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