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What price liquid assets?
Page 68
Page 69
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LPG vehicles might spark the interest of some
London-based operators at auction but most remain to be convinced. Kevin Swallow reports.
Research carried out by British Car Auctions (BCA) has revealed that in general alternative fuels have not affected the buying patterns of end-users and operators, with some marked exceptions.
BCA canvassed a cross-section of professional van buyers about liquid petroleum gas (LPG). It discovered that many believe LPG vans are difficult to find and value as they remain thin on the ground. But demand exists for those LPGs that do make it to appropriate markets, like the South-East.
In terms of residual values. BCA's respondents placed diesel at the top, with petrol/LPG second and petrol third. Duncan Ward, UK business development manager for CVs,says:"BCA has seen selected lower-mileage, good-condition LPG models make exceptional money — sometimes even outstripping the comparative diesel value. Such examples are rare and tend to occur at our centres nearest to Loridon,where LPG can have a real financial benefit for the operator."
When it comes to valuing an LPG vehicle, buyers are concerned about how the unit was fitted,preferring factory-fit to retro-fitted LPG. "Professional buyers don't see high numbers of LPG vehicles reaching the used market, which makes it difficult to gauge demand," says Ward."However, there is a rarity value attached to clean, straight examples which can see values soar, particularly when they are offered in the right part of the country"
LPG for London
Diesel ticks all the boxes for an operator in terms of economy, value and desirability but external pressures like London's congestion charge means LPG vehicles become a viable commodity. "There is an active market of operators who buy lateplate, clean LPG vans for delivery work and other duties in and around the congestion charging zone in London,"Ward reports. Provided the LPG van meets the emissions criteria it can offer a substantial saving if it is working in the charging zone every day.
"This can have a significant effect on values. However, there is generally less interest for LPG the further you get away from London.The major issue for anyone — dealer or end-user — wanting to buy LPG is supply," he points out.
A quick look at BCA's online Commercial Auction View stock locator found just seven LPG vans listed on 10 September at five BCA centres; they included a Ford Transit, a Vauxhall Astravan and a Renault Kangoo.This compares with the 1,500-plus mainly dieselpowered light CVs BCA was offering for sale on the same date.
"While there is undoubtedly a select market for LPG, they do not do return a price performance comparable with similarly specified diesel-powered models — which are far and away the preferred choice for the professional buyer looking for retail stock," says Ward.
Chicken and egg
"There is an element of the chicken and the egg for LPG — if there were more, then buyers might feel more confident to buy for stock. As it is, buyers see LPG so rarely that many do not factor it as an option.
"Anyone operating LPG and other alternative fuels in their commercial fleet should follow the usual rules of preparation and presentation, and don't let examples get too travelled before they are sold.
"The few LPGs BCA handles all seem to find ready buyers if valued in line with market expectations, and the best examples will make exceptional money."