CommercialFleet

More than half of van fleets operate on a four year cycle

Research carried out for GE Capital’s Fleet Services division has discovered that four years is the most common replacement cycle for van fleets.

The second, quarterly edition of Company Van Trends found that more than half of organisations (55%) from among the 176 questioned are running a four year cycle with just over a quarter (27%) opting for five years. At the other end of the spectrum, 10% of respondents said that they kept vans until they were defunct.

Simon Cook, LCV commercial leader for GE Capital UK, said: “There are basically two extremes when it comes to running an LCV fleet replacement cycle – either on a planned and budgeted fixed term or to simply keep them going until doing so is no longer economically viable.

“The results to this question in Company Van Trends largely confirm this. By far the most popular replacement cycle is four years, used by just over half of all the fleets questioned. This shows a disciplined approach to whole life costs. The majority of the LCVs being used by these organisations will be leased on a 48 month cycle with a mileage limit for this period including maintenance costs. The key advantage of operating on this basis is that costs are known, predictable and contained.

“Fleets operating on a five year cycle will probably be managed in a similar whole life cost fashion although we suspect that more of these will be acquired through outright purchase, as leases over this period tend to become more expensive.

“The ‘drive-until-destruction’ approach is probably seen in the six year and longer replacement cycles. We suspect that at this level, most vans are being operated on the basis that they are repaired until the cost of doing so is prohibitive and they are then sold at auction or scrapped. The disadvantages of working in this way are that expenditure on repairs and maintenance has a strong tendency to become both higher and more unpredictable while vans also start to reach a point where they start to look scruffy in terms of the corporate image that they project, which is an important consideration for many companies.”

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