In a recent report compiled by Prof Peter Cooke at the behest of British Car Auctions, there are grave concerns surrounding the supply of used vans and light commercial vehicles on the road ahead. This is bad news for van drivers, especially young drivers or those with a high number of points on their license, who are hoping to find cheap van insurance by investing in a second-hand van.
The professor, operating out of the University Centre for Automotive Management in Buckinghamshire, also suspects that the decline in quality used vans will have a huge impact on small businesses, too, historically the biggest single market sector for second-hand vans up to the age of five years old. For the smaller business who has perhaps only a tight budget and had only forecast for a cheap van insurance policy as well as a low cost van, this is one hurdle they will not fancy jumping, especially with fuel in an unseemingly unstoppable spiral upwards.
What has caused the shortage in used vans?
According to Professor Cooke, the well will soon run dry for two reasons, both to do with finance and organisations looking at their own fleet running costs, themselves perhaps trying to reduce their fleet van insurance costs by holding onto their vans for longer.
In the first instance, we have to look back to 2009/2010, when the recession had the country in a grip of fear that saw some of the biggest brands disappear from our High Streets forever. At that time, there was very little investment in new commercial vehicles.
There were, however, a large number of used vans available on the market this time last year, but that was as a product of some of those larger names falling by the wayside. Demand was high for those vehicles and, although there were unusually high numbers going through the auction rooms at that time, prices held up relatively well, falling back less than two points.
The secondary reason why there are so few used vans of quality, which is why young drivers are going to struggle to get cheap van insurance through this traditional route, is that those companies that did invest in new fleet shortly before the recession took hold are holding on to their vans. The recycle pattern is being stretched out as no one is at all confident that the country – indeed, the world, is not going to slip back into a double-dip recession.
Perhaps there is another reason, too. Due to vans and their engines becoming more efficient due to CO2 compliances, companies are not only having to hold on to their commercial vehicles for longer, but are finding that this is not only protecting their liquid assets, but also delivering tremendous cost savings. As the vans depreciate, their value lessens, therefore their van insurance quotes get cheaper, without any massive effect in off-road time or performance.
Perhaps the qualification period for ‘quality’ used vans will now have to be stretched and, those once in the market for low cost used vans and cheap van insurance will have to wait for seven or eight year old models to come to market, as efficiency improves.