CommercialFleet

Van usage 'key influencer' of residual values

James Davis, Manheim

Residual value is a key influencer of a vehicle’s whole life cost and while age and mileage are traditionally considered critical, usage is even more impactful.

That will be the message to delegates attending the first Commercial Fleet Summit and Exhibition on Thursday, September 24 at the International Centre, Telford, from James Davis, director of commercial vehicles at Manheim, the UK’s number one commercial vehicle auction company.

Davis, who has more than 20 years’ experience of setting residual values, selling vehicles at auction as well as being an asset manager for a major truck rental and contract hire business, has developed the ‘CV circle of life’.

The model, said Davis “provides increased clarity of the factors that together influence a commercial vehicle’s future value in each and every life cycle”.

From a car derived van to an articulated lorry and every size of model in between, Davis says the ‘CV circle of life’ can be applied irrespective as to who owns the vehicle and how it is funded.

Identified via the 12 hour markings on a clock face, Davis will take delegates through the ‘12 Ps’ which identify key influencers during the pre-life, in-life and end-life of a vehicle for the first owner. They are then repeated through the second life of a vehicle and onwards until it is either exported or scrapped.

Davis, whose love of commercial vehicles extends to restoring a 25-year old Ford Transit ex-government spy van, said: “There has never been a model that clearly demonstrates what influences in the life cycle the ultimate value of a commercial vehicle.

“As a consequence of the recent economic downturn, many asset funders and fleet operators faced losses of hundreds of thousands of pounds and part of that was due to the point at which the asset fell out of the break in its original life cycle.”

Key influencers in the educational model include, for example:

·     The purpose to which the vehicle is put

·     The people driving it

·     Preservation of the vehicle in terms of service, maintenance and repair

·     Preparation for sale

·     Market perception of the vehicle

“People think residual value setting is a dark art or a science, but it is not. The art is the varying interrelation of the 12 key influences” explained Davis. “Vehicle owners and operators need to join up a vehicle’s circle of life from pre-life, through in-life to end of life - with in-life being key - and that will result in strategies that deliver and an improved price, or reduced damage recharges, when it is de-fleeted to be re-hired or sold.”

Limited tickets are still available for the Commercial Fleet Summit, book your place at www.commercialfleetsummit.co.uk or contact Emma-Louise Kinnaird on 01733 395133 or emma-louise.kinnaird@bauermedia.co.uk.

 

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