Average used van values hit an all-time high of £5,658 in August, according to the latest sales data from British Car Auctions (BCA). According to the firm, demand from professional buyers remained strong last month and shortages of good retail quality vans continued.

The average van at BCA sold for £5,658 in August, an increase of £160 (2.9%) compared to July and the highest monthly average figure on record.  Fleet & lease and nearly-new values rose, month-on-month, while part-exchange values fell back.  Year-on-year values remain well ahead by £645 (12.8%), with both age and mileage falling and performance against CAP improving slightly.

Used van values July 2012 – August 2014 (courtesy of BCA)

I obviously have some egg on my face, having been calling for the peak of the used van market for a little while now, but I would like to point out one quirk in the figures, which suggests to me that the outright increase suggested by the graph above may not be the only interpretation of the facts.

[Update 08/09/14: Figures from the Finance & Leasing Association have just crossed my desk, showing that used car purchases by businesses fell by 50% in July, compared to the same period last year, while new car purchases (on finance) rose by 29%. If similar trends are being seen in the new and used van sectors, then we could soon see further downwards pressure on used van prices.]

Mix change?

Although the overall average price was the highest on record in August, the average value of fleet and lease sector vans was lower than in the peak months of February and March. Similarly, the average value of part-exchange vans has fallen continuously since May, while the average value of nearly-new vans was also lower than the peak values of February, March and several other months over the last two years.

In other words, the overall average used value is at an all-time high, but none of the average sector values are.

To me, this suggests the mix of vehicles being auctioned may have changed — BCA don’t specify the relative volumes sold in the fleet and lease, part-ex and nearly-new sectors, but my understanding is that nearly-new volumes are pretty low, while the largest volume comes from the fleet and lease sector.

If this is true, then an increase in the number of ex-fleet and ex-lease vans coming through the salerooms could have boosted the overall average price to a new record high, even if the average price of each van sold did not rise. This is also supported by the continuing rise in new van registrations, which rose by 22% in August, compared to August 2013.

This is only my opinion, of course. If you know better, please leave a comment below or let me know on Twitter (@vanrentaluk) or Facebook facebook.com/vanrentaluk).

One of Direct Online Services’ new Renault Master Loloader vans

The range of vans offered by van hire companies is usually enough to meet most requirements, but in some cases, standard hire vans just don’t cut it when compared to specialist models.

The specialist dual compartment refrigerated van I wrote about here is one such example, while another is the Renault Master Loloader vans now being operated by Direct Online Services, a solid wood kitchen furniture specialist.

If you think about it, a solid wood kitchen has several distinguishing features: it’s heavy; it may have long lengths of worktop and it’s basically square. Clearly what’s required is a long, low, square van body with a high payload.

Although a luton with a tail lift would meet some of these requirements, the weight of the tail lift (around 150kg for a modern lightweight model) eats into the payload of the van and makes offloading heavy, long pieces of furniture and worktop quite awkward.

It’s far easier if the driver and his mate can step straight from the load area of the vehicle onto the ground, when unloading — something that’s possible with a the Renault’s Loloader body.

This isn’t a design that’s unique to Renault, and it’s similar to the dropwell luton design favoured by removal companies (and by vanrental.co.uk advertiser Admiral Van Hire), except without the high luton roof, providing a more aerodynamic and fuel-efficient profile.

The advantages of the new, tailored design are clear, according to Direct Online’s Logisitics and Operations Director, Phil Allright, who said:

“We’ve been really impressed by our first Renault Master and in particular the size of the load area and weight carrying capacity. With our other vehicles [Iveco and Ford] we typically get 800-900 kilos but with the Renault Master we’re getting over 1,240 kilos which is obviously great news for our business. We are also currently saving money on running costs of around 7% so we are clearly keen to bring more of these vehicles on to our fleet.”

The combination of a significant increase in payload and a reduction in fuel consumption should equate to increased profits for the firm, as each van may be able to fit more deliveries on board within the legal weight limit, cutting the number of journeys required.

According to a recent Fleet News article, CAP residual price data show that buyers will pay up to 7.5% more for a Citroen Nemo than a Peugeot Bipper — even though the two are simply rebadged versions of the same van.

According to CAP, it’s a similar story with the Mercedes-Benz Citan, which can command used prices of up to 20% more than its sibling, the Renault Kangoo.

The prestige of the Mercedes-Benz brand complements Celtic Manor’s five-star ethos in a way that few others could, according to the company.

Given fleets’ must of necessity focus on minimising the total cost of ownership, this would seem to mean — broadly speaking — that manufacturers with weaker residual values must sell their vans for less, if they are to be competitive on cost terms.

Even this isn’t enough, however, as many buyers would prefer the status offered by prestige brands such as Mercedes and Volkswagen, and aren’t bothered about the additional upfront cost, as they are confident they will recoup it through potential reliability savings (even if these are illusory) and, more tangibly, through stronger residual values.

This phenomenon was nicely illustrated by a press release which dropped into my inbox today.

The Celtic Manor Resort, near Newport, in Wales, is a 2,000 acre golf, spa and hotel complex that prides itself on delivering a true five star service. Celtic Manor was the first Welsh venue to host golf’s prestigious Ryder Cup, and this year it will play host to the 2014 NATO Summit.

The size of the estate means that a minibus service is required to transport guests between locations — and the estate’s minibus fleet is expected to reflect its five-star ethos, as Transport Manager Tim Fosdick explains:

“Celtic Manor is a five-star venue, so naturally we want to operate five-star vehicles that reflect and complement our own brand image – when it comes to light commercial vehicles that can only mean Mercedes-Benz.”

Celtic Manor has recently taken delivery of three 17-seat Sprinter 513 CDIs and a pair of nine-seat Vito 116 CDIs, all in factory-built Traveliner specification, and replace a previous Mercedes-Benz fleet. Although they will primarily operate on ‘local’ work, within the bounds of the estate, mileage and wear can be considerable, according to Mr Fosdick:

“Make no mistake, though, these are working vehicles and they will lead hard lives. Each is contracted to cover 40,000 miles per year and we have some very steep hills at Celtic Manor, which means a lot of gear changing and wear and tear on the driveline and brakes as we ferry golfers and diners around the various facilities.

“Previous experience has proved that the Mercedes-Benz Traveliner offers the build quality, engineering integrity and reliability to withstand this demanding regime, as well as being very economical to operate.”

And there you have it: brand matters in the LCV sector.

The Mercedes brand has been built up over more than 100 years, and it’s very hard to see how any of the firm’s peers will topple it in my lifetime.