Vehicle colour has become an increasingly frequent topic of conversation in recent months, particularly in discussions with our auction and remarketing partners, writes Ken Brown, LCV valuations editor, Cap HPI.
As used vehicle values remain under scrutiny, it is worth examining the role colour plays in the price performance of used light commercial vehicles (LCVs),
For decades, white has dominated the LCV market. Since the introduction of the CAP Red Book in 1984, its benchmark used vehicle values have been based on plain white vans, reflecting the market’s long-standing preference for the colour.
The reasons are straightforward. White provides a blank canvas for fleet operators, accommodating everything from simple painted or vinyl company graphics to full vehicle wraps, including high quality photographic designs.
This versatility makes it the ideal choice for corporate branding while ensuring the vehicle can be returned to a neutral appearance with relative ease before entering the used market. This broad market appeal has traditionally translated into stronger demand, faster stock turn and more consistent retained values.
While customer preferences and manufacturer colour offerings have evolved over time, white has remained the default choice for many fleets, largely because of its proven performance throughout the vehicle lifecycle.
However, with an increasing number of operators specifying alternative colours to reflect corporate identity or enhance driver appeal, the question is whether white still commands the same advantage in today’s used LCV market.
From white van man to every colour counts
However, by 2014, the reign of the “white van man” was coming to an end as vans in a much broader range of colours progressively appeared in trade transaction data.
In some sectors, white vans became outnumbered by other colours, reaching the point where the sample size for white vehicles alone was no longer sufficient to produce the most accurate guide values.
At that stage, CAP Red Book changed its methodology to use the average transaction prices of vans in all colours.
Colours in today’s van market
Today, in addition to the standard plain white finish, manufacturers offer a wide range of solid and metallic paint colours. These are typically available as optional extras at an additional cost over the standard vehicle price.
Colour has become an important aspect of brand identity, with many manufacturers promoting new models in distinctive launch colours to enhance brand recognition.
Some manufacturers also offer large fleet customers the option to order batches of vans in bespoke corporate colours, reducing commissioning time and delivering cost savings. Depending on the colour and the fleet operator, this can have either a positive or negative impact on market prices.
It’s a wrap!
Another practice that became increasingly popular was the use of vinyl wraps to change vans from more desirable colours, such as metallic silver, into corporate fleet colours. The wrap could then be removed before disposal, allowing the vehicle to benefit from the stronger market prices associated with metallic silver while preserving the original paintwork.
It is worth noting that operators of vans that have been vinyl wrapped, where the main colour has been changed, must update the V5C registration certificate with the DVLA. Similarly, at the end of a van’s first life and the wrap is removed, the V5C will need updating again.
Price performance vs guide values
The used LCV wholesale market is extremely volatile and particularly sensitive to changes in the wider economic climate. While age, mileage, condition and supply volumes remain the main drivers of market prices, colour is one of many additional factors that can influence trade sale prices.
The following charts are based on our trade sales research data for vehicles up to 5 years old. The first chart shows the distribution of sales transactions for vehicles in the various colours. The second chart, for the same data set, shows the trade sales performances, against CAP Average guide values.
As the first chart clearly shows, white has accounted for just over 61% of all trade sales over the past five years, affirming its continued popularity among hire companies and large fleet operators. It is therefore no surprise that the used van wholesale market is, from time to time, saturated with plain white vehicles.
The abundance of white vans in the wholesale market may help explain why their average trade price lags significantly behind that of other colours as illustrated in the performance chart.
Whilst grey and silver vans account for a combined share of almost 24% of trade sales, many are likely to have been vinyl wrapped in company corporate colours, allowing operators to benefit from higher residual values when the vehicles are eventually remarketed.
It is worth bearing in mind that colour is just one of the many factors that determine a vehicle’s market value so we are not suggesting this chart should be taken as a guide to how much a vehicle is worth.
Age, mileage and condition have long been the primary drivers of trade prices. However, as vehicles remain in service for longer periods, mileage has become an increasingly important consideration when assessing current used stock profiles.
With average mileages continuing to rise, higher levels of cosmetic damage and general wear and tear are becoming more prevalent. Age, mileage and condition as well as colour are intrinsically linked
Author: Ken Brown, LCV valuations editor, Cap HPI
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