Never before in my living memory and 25 years in this industry have so many factors lined up to influence the fortunes of new and used vans. 

In this series of blogs I consider the latest acronyms to hit our industry ULEZ, CAZ, WLTP and RFL to name a few. One thing is for sure, there are more questions than answers and it’s going to be a fun few years! 
 
And today’s topic? To upgrade or not to upgrade, that is the question.

A recent Commercial Fleet online reader poll found 78% of respondents would upgrade their CVs in the face of Ultra Low Emission Zones (ULEZ) and Clean Air Zones (CAZ). Just 10% said they would pay the ULEZ fine and the balance, 12%, would do a blend. 

The number of survey respondents is not stated and I would suggest the majority of the sole traders and SMEs in the UK that own the lion’s share of our 4.1m vans have not responded.

Source: Commercial Fleet



No doubt the ULEZ and CAZ areas with associated penalties will be key drivers of fleet replacement for large first-life van and truck operators. 

But how will the hundreds of thousands of one man bands with a 10-15 year old van and very low annual mileage and usage react? Considering 30% of the 4m vans on UK roads are over 10 years old, there is a significant number of van operators that will either have to upgrade to Euro 6 or just pay the fine. 

A shop owner with a 12 year old diesel van that only travels into the ULEZ twice a week to the wholesalers (bearing in mind, unless its fresh produce, the majority of wholesalers are located out of town) may choose to keep the trusty old van and pay up,  only considering an upgrade when the cost to operate becomes excessive.

A building trade related company operating a fleet of vans in the city will clearly have a bigger decision to make. 

A single van travelling into the London ULEZ (and at this moment, Birmingham’s CAZ) for 5 days, 25 weeks of the year will pay around £1,500 based on the £12.50 charge. Short term, will this cost be incorporated into a margin or passed onto the client as a toll/tax, a local sales tax if you like? Time will tell.
 
A pre-Euro 6 truck will pay significantly more to operate; thousands of pounds a year.
 
In the medium term, margins are too tight for either vans or trucks to continue to operate sustainably and I believe the purchase of new, nearly new Euro 6, or flexi-rental are the only other options.
 
The question is, with the average first life of vans and trucks being between 5 and 10 years, will there be enough Euro 6 product out there to satisfy demand?

Share the CV Love

James Davis