February 2008Buying commercial vehicles is a very different beast to purchasing and managing car fleets, as Dan Gilkes explains
Purchasing commercial vehicles should be similar to purchasing a fleet of cars. However the commercial vehicle market is far more complex, with legislation playing an important role in the decision-making process for many fleet managers.
It is probably fair to say that the heavier the vehicle, the more legislation will affect the range of vehicles on offer and how they are operated.
The first decision is, do you want to buy the vehicles at all? A surprising number of companies don't own their vans or trucks, despite the name on the side, choosing instead to contract hire or lease from private or manufacturer-owned leasing businesses.
"Around 70 per cent of our commercial vehicles are financed through some form of off-balance sheet leasing arrangement," says James Read, fleet operations manager at Ford. "It provides customers with an exact cost per month to run their vehicles."
The contract leasing sector in the UK commercial vehicle industry is perhaps one of the most advanced in the world. Every part of the process is on offer, from supplying a vehicle to use as your own, to offering literally a cost per kilometre for goods to be moved. The bill can include fleet management and tracking, breakdown cover, servicing, tyre management, windscreen replacement, vehicle supply and disposal. All you have to do is insure the vehicle and provide a driver.
Leasing is not simply a financial decision, although it offers a number of tax advantages if that's how your accountants want to work. A properly set-up contract package should also provide a level of assistance with fleet management and legislation, leaving you free to concentrate on your company's core business activities.
If, however, you have decided to buy a fleet of vans, the next step has to be deciding exactly what you want to do with them. The range of specification in the commercial vehicle market is bewildering, and you must ensure that you find the right vehicle to fit the requirements of the job, both for the safety of your operators and to keep operating costs to a minimum.
This may sound basic, but you'd be surprised how many people think that a 3.5 tonne van will carry 3.5 tonnes of payload. In fact, with a driver on board and fully fuelled, you'll be lucky to get 2 tonnes of payload in a 3.5 tonne gross vehicle weight van. It's a similar story with a "2 tonne van", which will actually carry around 1 tonne of payload.
It's not simply weight, either. Anyone who decides to simply "go out and buy a Transit" is in for a big surprise. The humble Ford, like many of its competitors, comes in short, medium, long and Jumbo wheelbases, with standard, medium and high roof options. That means internal load volumes of around 5-17 cubic metres.
Gross weights range from 2 tonnes to 4.6 tonnes and you can choose between front wheel drive, rear wheel drive and four wheel drive. That's before you decide on 85, 100, 115, 130, 140 and most recently 200 horsepower engines.
You need to carefully assess your operation and ask a few basic questions. What do you need to carry, how far and how fast do you want it to get there? Is the vehicle that you are looking at fit for the purpose that you intend to use it for?
"Really sit down with your team and decide what do you want this vehicle to do," says Read. "This is a business decision, not an emotional decision like when buying a car."
Robert Handyside, commercial vehicle operations manager for Citroen UK, explains: "The first thing that anyone purchasing commercial vehicles has to do is understand legislation."
For instance, if you don't need a high payload, a van with a gross weight (GVW) of less than 2 tonnes is allowed to travel at car speeds on A and B roads. Go over 2 tonnes GVW and the van should travel 10mph slower than the prevailing car speed. That means that on a single carriageway A road with a 60 mph speed limit, a van over 2 tonnes should only be driven at 50mph, while its lighter variant can press on with the cars. Likewise on a dual carriageway the van under 2 tonnes can travel at 70mph, but heavier vans should not exceed 60mph.Manager's responsibility
Of course this little-recognised letter of the law is largely ignored by many van drivers, but it is a manager's responsibility to ensure that drivers are aware of legislation. Corporate responsibility is an important aspect of the van buying package.
It is the same story with weight. It is very easy to overload a large van, particularly with small heavy goods. At best this will result in a fine, whereas serious overloading can affect vehicle dynamics and cause an accident.
"It's not that difficult for somebody to qualify what they need," says Paul Gozzard, Nissan GB's light commercial vehicle manager.
"They just need to look at what they need the vehicle for. Will it have multiple or single drivers? What type of goods are being carried, and do they need to be temperature-controlled? Will the vehicle carry passengers as well as goods, and if so, how many?"
Buyers should also consider whether the vehicle will be used to tow, bearing in mind that a 3.5 tonne van will need a tachograph if it is going to be used to tow a trailer for hire and reward. If the van is going to tow then rear wheel drive is by far the best layout.
Finding the right vehicle is, therefore, critical. This means you will probably be talking to dealers, or if your fleet is above 100 vehicles, directly to the manufacturers. Although the dealer is trying to sell you vehicles, they should be able to advise you on both legislation and van choice. If they can't, move on and find one that can.
"Look for a manufacturer that is dedicated to commercial vehicles, an expert in the field," Gozzard advises.
There is no advantage to a manufacturer in selling you the wrong vehicle, as you won't be coming back for a replacement and it will have lost a long-term customer. Far better then that they understand your business needs and can specify the right commercial vehicles to meet them.
Read points out that buyers also need to consider back-up. "Customers know that vehicles do break down. But what support are you offered?"
This will become even more important if you aren't looking for a basic panel van. What about a tipper, or a refrigerated van, or perhaps a large-volume Luton? Suddenly you are looking at two purchases, a chassis and a body, and at some way of bringing the two together.
Many dealers will be able to recommend a body builder to provide the body and equipment, but it could be up to you to talk through your requirements directly, book a build slot and work out how to get the vehicle onto the road. This process will become more complex in the next few years, with the introduction of whole vehicle type approval.
This will bring commercial vehicles in line with cars, which have to be tested and type approved prior to sale within Europe. At present, however, it is not clear who will take the responsibility for both the chassis and the body.
To make things easier for customers, many manufacturers are now offering a variety of complete bodied vans and light trucks, Ford's One Stop Shop for instance, or Citroen's Ready to Run package. Covering the most popular conversions, such as tippers and fridge vans, these vehicles are available ready to roll from dealers and come with a single warranty and a single source for back-up and maintenance.
However it doesn't stop there. Whereas vans are designed as a large box on wheels, few are supplied in this basic format. Tail lifts, racking systems, additional lighting, towbars, even a simple ply lining are all options that a dealer should be able to provide. Racking systems in particular are worth looking at. It is worth remembering that momentum plays an important role in the case of an accident. A 75kg load that is loose in the back of a van will weigh substantially more in even a 30mph frontal collision; at motorway speeds, it can easily kill the driver if they are not protected from the load.
In addition, as the load is the main reason that you have a van, it should be protected from damage in transit and adequate restraint is essential.
Duty of care legislation says that you should also carry out a risk assessment before specifying a vehicle, and do everything possible to reduce any risks to your employees. A simple bulkhead or a racking system should always be considered.
Having chosen your van, the method of purchase and any internal fittings and specification, you can also consider the outside of the vehicle. A van is a moving advertising hoarding and effective corporate branding can be a positive marketing tool. Come resale time, a white van remains the easiest to sell but don't let that put you off colours (although few people want to buy an orange ex-RAC van after a few years on the road).Silver-plated choice
Silver is popular on both the new and used markets, but if you really want to have a noticeable livery it is worth considering a wrap, a vinyl sticker that wraps around the entire vehicle: Sky's vans with The Simpsons on the side are a good example. Wrapping can be less expensive than a costly respray and can be removed without damaging the paintwork at the end of the vehicle's first life. Indeed, wrapping on the front of the van will prevent the majority of stone chips, and mileage and condition are far more important than model year when the vehicle is up for auction.
For the purchaser of commercial vehicles, the main points are:
- understand the legislation that affects your operation;
- decide exactly what you need the vehicle to do and get help finding the right van for your operation;
- consider price as part of a whole-life costing;
- look for support - if the van is off the road, can the dealer provide a similar van as a stand-in and will they service it overnight or at the weekend?;
- consider the financial implications of each finance option, including the VAT.
One final thing to remember is that, while it is relatively easy to buy a standard, short wheelbase, low roof, medium power van, if you want something a little bit more special, you may need to think ahead.
"Make the decision well in advance of the requirement. Factor in lead times, which can be up to 10-20 weeks on some vans, and longer for conversions or body building," warns Nissan's Gozzard.Dan Gilkes is editor of Van User magazine