There number of vans on the road that are ten years old or more has increased by 10% to 1.19 million since 2014, a new study has found.
This, according to the company which conducted the survey, means that 33% of all vans are now ten years old plus, with the number rising steadily since the credit crunch. In 2009, there were just under 730,000, or 23% of the total stock, that were over ten years old.
Delaying upgrading vehicles could prove costly for businesses in the long run. Older vehicles are often more expensive to run and maintain, and if they become unreliable or appear dated, this could reflect negatively on customer perceptions about the business itself.
This is increasingly important as the boom in online shopping continues and the availability of apps for a wide range of services grows — from food delivery to help around the house — boosting demand, and competition, for delivery or other mobile services.
Funding Options, which conducted the survey, says that a key reason why businesses are continuing to retain vehicles for longer, despite improvements in the economy, is likely to be because bank lending to SMEs remains constrained.
“If your business is using rundown vehicles it could damage your brand enormously, the company’s CEO Conrad Ford said. “Customers think it looks unprofessional, and sweating these assets beyond their reliable lifespan is likely to lead to hefty maintenance and repair costs and the risk of unexpected failure. If unreliability causes the provision of goods and services to be delayed or cancelled at short notice, it could have a disastrous impact on brand reputation and end up costing businesses dear.”
“Many SMEs held back on investing in new vehicles during the recession, but now even as the economy has strengthened, they appear to be either unwilling or unable to commit to these kinds of major capex decisions. Many are keen to invest in energy-efficient vehicles, but lack the available resources to do so.”
That, he added, was why more businesses were now investigating alternative finance options, such as leasing and asset finance “to enable them to spread the cost of new vehicle purchases without impacting working capital or hitting the bottom line.”