The continuing dismal new van sales figures – down 45% in the first quarter of the year – tell their own story.

The recession is biting and fleet replacement cycles are being reviewed.

In a bid to save cash, some fleets that purchase their own vehicles are holding on to them for longer, while others which lease are extending their contracts.

On the face of it, such a strategy seems like a shrewd move.

Reliability has come on in leaps and bounds over the past 20 years, so surely vans should last longer?

Well, yes and no. Keep a van for five years instead of three and you may be lucky and experience no trouble.

But then again you may not – and the penalty for a broken-down vehicle can be severe.

It’s not just the repair cost, which could run into thousands, but an appointment could be missed, a contract lost and another firm could go down the pan.

While extending the fleet life of a car can prove cost-effective, it’s a much more complicated equation in the world of LCVs.

Many vans hold specialist equipment so it’s not just a case of nipping down to the nearest rental outlet for a replacement when they break down.

Most van manufacturers offer a three-year warranty, with varying mileages, and while vehicles are run within these boundaries a fleet operator lives in a fairly comfortable.

But step outside that warranty threshold and the world becomes a very scary place.

Steve Bridge, van sales and marketing director at Mercedes-Benz, has the figures to back up his argument that buying new beats keeping old.

Bridge says: “Figures from our leasing arm Charterway show that at the end of a three-year lease we can offer a similar van for roughly the same monthly price, taking into account any price changes which have occurred in the meantime.

“Extending a three-year contract into four and five years will cost roughly the
same too, but you’ll have an old van that may look a little tatty and it won’t have the latest safety features such as adaptive ESP traction control.

“We will also shortly be launching Euro V engines in Sprinter so new vans will be greener and use around 11% less fuel.

"All in all, it just doesn’t make any sense to run a fleet of older vehicles.”

Charterway has seen around 10% of its lease customers asking to extend their contracts as a result of the recession but, says Bridge, most of these customers are doing so because of uncertainty about their future rather than for cost considerations.

Fleets that outright purchase face different problems. SMR costs rocket in the fourth and fifth years – and at the end of the van’s life, the owner has to find someone to buy it.

CAP data shows that a three-year-old Ford Transit 280 SWB retains 27% of its original value at three years, but just 18% at five.

And writing in his monthly editorial, George Alexander, chief commercial vehicle editor at Glass’s, said: “The incentives to buy a new model have become so great that it is a close-run thing as to which will be cheapest – new or used.

"The clamour for late-year LCVs has had the effect of pushing prices for the nicest examples ever higher.”

Citroen deals skew their benefits towards choosing new vehicles

While owners of low-mileage vans could benefit from keeping them over extended periods, the vast majority of fleet users are better off with new vehicles, according to Robert Handyside, commercial vehicle operations manager at Citroën.

And with Citroën currently offering £7,100 off the price of certain new Relay panel vans, it’s an opinion that appears to bear weight.

Citroën has been discounting its new vehicles for years now but, despite the fact that many of its models are the same as Fiat and Peugeot derivatives with changed badges, residual values of all three remain largely on a par.

There’s another problem with buying used vehicles too. Handyside points out that buyers are likely to have to compromise by choosing whatever model is on offer, whereas with a new van a buyer can choose his or her exact specification.

Buying used also carries the risk that the vehicle may have been used and abused in its previous life.

As with Mercedes-Benz, Citroën offers four and five-year leases on its vehicles, but monthly rentals on extended contracts are largely on a par with three-year deals.

Thus trading up to new models after three years won’t cost any more and the fleet operator has new vehicles with better specification and technology.

Handyside adds: “There has never been a better time to acquire a new Citroën LCV as the company has its best-ever offers with cashbacks of up to £7,100.

This means that a new Citroën Nemo van is available from around £6,000 ex-VAT.

“For most LCV operators the benefits of running newer vehicles are apparent.

Quite simply, any new Citroën LCV will provide the operator with lower running costs, better productivity, greater reliability, lower emissions and a better image.

“The driver of a new Citroën LCV also benefits from greater comfort and safety. And virtually every new Berlingo, Dispatch and Relay panel van is now fitted as standard with Trafficmaster Smartnav.”