Vans: Petrol heads

With petrol prices at record levels and showing no sign of stabilising, many van-driving retailers are more focused on economy than ever before when looking for a new model.

Thom Morton, a Nisa-Today’s retailer in Chester, says he used to be “brand snobbish”, but the current economic climate has changed his priorities completely. “Miles per gallon (MPG) is now by far the most important factor in choosing a new van. Road tax is also an issue, as well as load space.”

Thom drives a 2-litre Citroen Berlingo, which he uses for home deliveries and bank runs, but he is prepared to downgrade to a smaller engined van to save on petrol costs and road tax, which currently costs him £200 per year. He says engine power is not an issue for him, despite increasingly treacherous winter driving conditions.

But for Paul Fisher, of Fisher’s in Gerrards Cross, Buckinghamshire, load space is still the priority when it comes to vans. He recently traded in his previous model, which he says was too small, for a Citroen Dispatch after it was named van of the year 2008. He says he could have bought a more economical vehicle 40mpg as opposed to the Dispatch’s 25mpg but this would have set him back an extra £10,000 or so. “It depends how much you use it. We use ours for home deliveries so don’t have to drive long distances. But we also need an engine which is big enough for steep hills.”

For London retailers, van size will be the major consideration when looking for a new vehicle. On January 3 next year the Low Emission Zone (LEZ) will be strengthened, meaning all vans that weigh more than 1.2 tonnes unladen or those registered as new before January 1, 2002 will be required to meet a Euro III standard for particulate matter. Drivers of non-compliant vehicles who drive within Greater London will have to pay a £100 daily charge. The options are: to fit an exhaust particulate filter to improve emissions; pay the daily charge; or purchase a new vehicle (visit the Transport for London website for more information www.tfl.gov.uk/roadusers/lez/). The first option would cost hundreds of pounds and would need to be carried out by an approved installer, while the cost and time of annual testing would also need to be taken into account, says Sandy MacRitchie of Vauxhall.

Peter Clarke, business development manager at the Western International fruit and vegetable market, near Heathrow, advises retailers to consider load sharing as a cost- and CO2-saving alternative.

“Rather than rushing out in a panic to buy a new or compliant used van, London retailers who are close to each other could think about clubbing together to buy a new van. It would save them a huge amount of money and time if they only had to visit the depot once a week rather than two or three times.”

He says the LEZ change will come as a blow to many retailers who use vans to transport goods from cash and carries and markets. “I knew of a couple of retailers who were forced to shut up shop when the LEZ first came in for small lorries in 2008, so this could be bad news for those already struggling to make ends meet. However, for the large part, I think there will just be a lot of moaning and groaning, but eventually retailers will invest in an upgrade or get the changes made.”

For retailers who want access to their own van, both in London and elsewhere, there are a number of options available: pay in full; hire purchase; leasing; or rental. Leasing offers the advantage of providing known set costs, therefore helping with budgeting. However, the disadvantage is that there will be penalties if you return the vehicle in poor condition.

For those purchasing a van, it is worth considering finance schemes offered by the dealer or vehicle manufacturer especially as high street banks may be reluctant to lend in the current economic climate. For example, Vauxhall dealers are currently offering four years 0% finance with a 20% deposit plus full VAT.

Once you’ve decided how to pay for your van, there are a number of factors to consider to save on petrol costs. MacRitchie says choosing the right size of van is a balancing act: “Too big and you are paying too much, both upfront and in terms of running costs; too small and you will spend more in fuel and wasted time while making unnecessary additional trips.”

He says that paying slightly more for the right vehicle can make financial sense in the long run. “Check the CO2 and reported fuel economy because a lower CO2 and corresponding higher MPG could save you money in the long term.”

Buying at auction is another option, and one that has soared in popularity in recent months. According to British Car Auctions (BCA), sales rose by about 50% in January compared with December, with the average value of a Light Commercial Vehicle (LCV) up by £155. “After the general shortage of LVCs seen throughout 2010, the market has seen a large influx of vans from business failures and liquidations,” says Duncan Ward, BCA’s general manager, commercial vehicles.

It could also be worth finding out how your symbol group may be able to help. Ian Mitchell, owner of The Village Store, Ayrshire, drives a van paid for by Booker under a performance-related scheme. If he meets his monthly targets, Booker pays for the lease of his Renault Master, which is the “biggest van they had” and as economical as most. Thom Morton, meanwhile, says Nisa helped him find the best deals through its contacts.

Finally, for retailers worried about negotiating snow and ice-covered hills in mid winter, there is a cost-effective solution: snow socks. These are made from a textured fabric, which grips at right angles to the direction of travel and can be easily slipped over the driving wheels to offer greater grip in snowy conditions. So, for about £50, aborted home deliveries and cash and carry trips could be a thing of the past.