Back in April, official figures for the number of new vans bought in the first quarter of 2015 were impressive. Firms and van drivers ordered close on 100,000 new commercial fleet vehicles, a figure representing a 22% upsurge on the number of vans bought the same time the year before.
Confidence in the economy growing? Businesses more profitable? A sure sign that recession was on the wane? If those were the reasons that explained the hike in new van sales a few months ago, it was a confidence short-lived.
A new report by LDF, the vehicle finance specialists, points to a polar end of the commercial fleet market. An end ten times bigger than that at which you’ll find the businesses with the resources to reinvest in their fleet.
Reality check: the party pooper
All told, back in Spring, trade bodies were flipping cartwheels when 108,456 commercial vehicles in total rolled off the order books.
Both online sales and attractive finance deals went some way to explaining the high numbers. And it was a successful campaign, creating the highest quarterly volume of vans sold since number-crunchers had been keeping records (1987).
The LDF report similarly reports on a new record. For the first time ever, more than a million vans on UK roads have served ten years or more. The actual figure for comparison is a little over three vans for every ten you see has a decade on the clock.
Driving commercial vehicles into the ground
The affluence at one end of the market is not a trait you’ll find common in smaller business owners who rely on vans to carry out their service.
Peter Alderson, LDF’s MD, believes that the report identifies small businesses in particular running their fleet “to the absolute limit”.
There comes a point when running costs become a barrier in themselves. Older vans are less fuel efficient, more costly to insure and certainly less friendlier to the environment. Keeping them roadworthy becomes a fool’s errand.
Another report by a financier, this time GE, may help spread some light on this reasoning. The reason small business owners and corporate fleet managers see things differently is explained quite succinctly.
Their recent Company Car Trends research puts three clear factors at the top of the most wanted list for fleet managers:
- Reliability (53%)
- Whole Life Costs (48%)
- CO2 output (32%)
These three traits were more important to fleet manager than the cost of the vehicle itself, which only 30% saw as a key factor. That’s the difference: different things take priority when it’s not your money you’re spending.
For the white-van man, the investment in their vehicle is one of the biggest costs in running their business. For a manufacturer? The fleet is a means to an end. That sole traders keep vehicles well past their sell-by date, compared to larger enterprise, thus becomes clear.