Getting the best LCV residuals

With many manufacturers offering discounted prices for new commercial vehicles many first owners are buying into vans that do not fully match their needs often leading to low residual values, says vehicle valuation specialist Glass’s.

George Alexander, Chief Commercial Vehicle Editor at Glass’s, says, “The first life for any commercial vehicle can be viewed as being one of partnership between fleet owner and manufacturer.

“If fleet managers aspire to high residual values, yet buy vans with poor specifications and in unpopular colours with painted sign-writing on the bodywork, disappointment surely awaits. Educating the customer about residual values and how they can secure the best RVs possible will be of interest to all parties”.

With Glass’s extensive experience it estimates that the difference in resale value between a well-kept vehicle and an unprepared shabby example can be as much as £1,900 and selecting bright, unusual hues like green or orange can have a detrimental effect on future residuals of up to £700 versus a white van.

Mr Alexander says that while there are specifications and options to avoid, buyers should be conscious of the fact that they can easily achieve prices well above guide with a well maintained and desirable commercial vehicle. He added: “There is a major shortage of quality stock on the second-hand market and sellers stand to make significant financial returns by choosing specification carefully and taking care of the vehicle during its operating life.

“First owners should evaluate the options when considering sign-writing for the vehicle as it can have a significant bearing on future residual values. “Permanent sign writing can severely decrease the value of a vehicle; the alternative is removable vinyl decals as these should not affect the RV while still allowing the owner to promote their company – and protect the bodywork from minor scratches. We’ve seen examples where LCVs, previously wrapped in vinyl decals, fetch as much as £600 more than those with permanent sign-writing,” he said.

A plywood lining is particularly advisable to ensure no damage can be done from within the vehicle. Keeping the vehicle clean inside and out may seem obvious but often attention to detail in this area can help a seller achieve a higher value at resale. A service record is a must, all services, maintenance and repairs must be documented as a buyer will otherwise assume the vehicle has not been serviced, severely decreasing the RV.

When it comes to auctioning vehicles Glass’s recommends speaking to the auctioneer as early as possible to ensure the vehicle will be shown on the optimum day where the right buyers are present.

Alexander added, “The need to take a proactive approach should characterise the entire ownership period if the many pitfalls that might be encountered are to be avoided and each profit opportunity maximised”.