Don’t panic about weakening 4x4 residual values – help is at hand

Fears concerning weakening residual values for 4x4s have some basis in fact, says specialist four-wheel drive rental and leasing firm SHB 4x4, but there are a number of approaches available to ensure you can still run such vehicles economically.

“There have been numerous reports that the Government’s focus on making vehicles with emissions at the higher end of the scale less attractive, high fuel prices, plus the ill-informed antics of some members of the anti-4x4 lobby, have weakened the residual values and reduced popularity among used buyers for four-wheel drive vehicles,” says SHB 4x4 director Paul Street.

“Certainly, the people we speak to in the industry say that at auction, 4x4s need to be in the very best condition to sell, and that there are few customers for those vehicles of a poor standard.

“Where this will end up is difficult to tell. The current tough used market for 4x4s could get worse, or it may be a blip while confidence and expectations wobble in the face of the economic slowdown. But with a clear strategy on running 4x4s, both private and corporate users can run them efficiently.

“Of course, one option is to shift the residual value risk to a provider. Renting from a company such as SHB 4x4 means you can tailor your needs to your actual use. Many 4x4s are bought for a specific off-road purpose but then spend the majority of time on-road when a different type of vehicle would be more suitable, or even sit in the company compound depreciating in value, and waiting to be used.

“Renting a 4x4 only for those occasions when actually you need one makes practical, environmental and economic sense. As we have such a large fleet of 4x4s we can offer low rates for short, medium or long term rentals, and deliver them to anywhere in the UK. Then, when it’s done the job, just hand it back.”

Because of its 40 years of specialist knowledge in the market, SHB 4x4 is able to defleet its vehicles through a number of well-established channels, where it can obtain higher residual values, leaving customers to concentrate on running their business, rather than selling cars.

But for those committed to buying and selling their own 4x4s, Mr Street has some advice:

“If you’re a company buying a number of vehicles, firstly make sure you spread the risk in terms of manufacturer, colours, specification and transmissions. For example, having an all-white fleet of vehicles means you won’t do well with farmers, who are major buyers of used 4x4s, as they prefer dark inconspicuous colours.

“Have a number of sales channels open to you, through retail, internet and trade, so as one channel slows, you have the ability to shift stock to another.

“Make sure all working vehicles are either ply or load-lined from new to minimise load area damage to the actual vehicle during its life.

“And of course, for private and business users, there the basic rules of all used vehicles: full service history, spotlessly clean and in good condition at sale time. Just because it’s a 4x4 doesn’t mean buyers will accept less than good condition for it.

4 August 2008 Staff

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