News - 2006 Archive

• Safe Route through the LCV labyrinth
• ING Protect can help you save on insurance costs
• Road death risks
• New Child Car Seat Regulations
• Beware - Cash takers
• Things to Consider when Choosing a Leasing Company
• ING Expands with acquisition of Appleyard
• Changing Attitudes to Risk Management
• Reluctance and Risk Assessment

Safe route through the LCV labyrinth

The reaity is that LCV's are purchased to create wealth, but many businesses loose money on their fleets through outmoded management and poor practices.  For fleets that are outright purchased there is a natural temptation to retain the vehicles as long as possible in order to maximise their use. However, fleet managers would be advised to take note of the potential risks of operating an LCV fleet from the residual value perspective. Here, Martin Philips head of operational services at ING Car Lease, looks at teh current considerations that form part of their thinking in managing their customer's fleets.

“The last ten years have seen an explosion in the number of vans on our roads. Much of this has been down to our changing shopping habits, growth of the internet and increase in smaller service industry companies. At the same time there has been a significant increase in corporate legislation and responsibility. These have had an impact in three key areas: vehicle choice and suitability; running and in-life costs and increasingly, duty of care.

Vehicle choice and suitability

“Vehicle manufacturers have seen this sales growth and have been keen to get their share of the action. The once dominant position of Ford and Vauxhall has been eroded thanks to platform sharing amongst nearly all the manufacturers. Five years ago no one would have expected Nissan to have one of the largest van offerings available.

“With this growth, manufacturers have looked at the standard equipment they offer as a way to tempt potential buyers. Specification is becoming increasingly relevant with many companies using this to entice and retain employees. Who wouldn't consider changing companies if the prospect was for a van with a CD and air-conditioning if you spent much of the day behind the wheel? Going forward, it is conceivable this could form part of a health and safety policy to ensure drivers' workplace needs are met.

“Vehicle selection may also be important for a company wishing their vehicles to act as a mobile advertisement. Vans of various shapes, sizes and stylish trims can add value. Equally a make may also support a company's brand values e.g. a Mercedes suggesting a quality organisation.

“The choice of engines available allows companies to match usage to the most appropriate power unit. In the world of LCV, diesel is king and dual fuel vehicles have found little favour outside of the London congestion zone. As with all engine types the temptation is to take the cheapest option, but in terms of total costs this can be a mistake.

Running and in-life costs

“Discounts on LCV's can at times be staggeringly high. Vans tend to be part of a volume game with manufacturers often keen to support incremental volumes. This may be good news if the intention is to keep the vans until they drop, but as part of a managed fleet can lead to issues when trying to organise orderly bulk defleets in terms of resale value.

“In today's market the value a van achieves tends to be within very clear price bands based on size, age and mileage. Currently only condition has an effect and that is downwards. However there are signs that this is changing. Vehicles without ply lining are perceived to have not been looked after as well. Vans that have had seat covers ensure the interior is better presented and is gaining appeal. Certain levels of specification are being actively sought out by used buyers such as side loading doors, power steering and central locking.