Van Depreciation Rates: Maximising Value for Your Investment

Whether you're a sole trader or managing a fleet of vehicles, the value of your van plays a significant role in your financial planning. However, just like any other asset, vans are subject to depreciation – a decrease in value over time. Understanding van depreciation rates and how to maximise the value of your investment is crucial for making informed decisions and optimising your budget.

In this article, we'll discuss the topic of van depreciation, exploring the factors that influence it and how much vehicles can lose value over time. We'll also share practical tips that owners can employ to help minimise depreciation. From choosing the right make and model to regular maintenance and strategic selling, we'll cover all the key aspects of maximising your van's value. Read on to find out more… 

What is vehicle depreciation?

Vehicle depreciation refers to the decrease in a vehicle's value over time. It's the difference between the original purchase price and the van's current market value. When you buy a new vehicle, it immediately starts to lose value due to several factors, including: 

• Age - As a vehicle gets older, its value generally decreases
• Mileage - The more miles a vehicle has been driven, the lower its value
• Wear and Tear - General usage and any damage or repairs can lower a vehicle's value
• Market Conditions - Supply and demand for particular makes and models can affect depreciation rates
• New Model Releases - When a new model is released, the value of older models often drops

Typically, depreciation is most rapid in the first few years after a vehicle is purchased, with the steepest drop usually occurring in the first year of ownership. The rate of depreciation then tends to slow down as the vehicle gets older.

Depreciation is an important factor to consider when buying a van, as it affects the vehicle's resale or trade-in value. Some vans depreciate faster than others, depending on the make, model, and its reliability. Understanding a vehicle’s true depreciation can help you make more informed decisions when purchasing or selling a van, and when calculating the total cost of ownership over the time you plan to keep the motor.

How much do vans depreciate over time?

The depreciation rate of vans can vary depending on factors like the make, model, mileage, and condition of the vehicle. On average, a new van can lose around 20-30% of its value in the first year - this tends to be the steepest depreciation period during ownership.

After the first year, the depreciation rate of a van gradually slows down to about 15-20% per year for the next few years. After three to four years, many vans will have lost around 50-60% of their original value by this point.

Once a van is over five years old, the depreciation rate slows down further. Many vans can retain around 20-30% of their original value after eight to ten years of ownership but this is dependent on their condition and mileage.

Bear in mind that these are general estimates so the actual depreciation of a van can vary significantly based on the specific vehicle and market conditions. Factors like regular maintenance, low mileage, and good overall condition can help a van retain more of its value over time.

How much does a vehicle depreciate each year?

The rate at which a vehicle depreciates each year is subject to the particular make and model, its age, mileage, fuel type, and overall condition. Below, we’ve highlighted the average rate of how much a vehicle depreciates per year for the first three years:

1. First Year - On average, a new vehicle can depreciate by around 15-35% in the first year of ownership. This is usually the most significant drop in value before the depreciation rates start to ease.
2. Second Year - The depreciation rate of a vehicle slows down to about 15-25% in the second year of ownership. 
3. Third Year - From the third year, the depreciation rate is typically around 10-20% per year, gradually decreasing as the vehicle gets older.

It's worth noting that some vehicles, particularly luxury or high-performance models, may depreciate faster than average. Additionally, factors like changes in fuel prices, road tax changes (more here), and overall economic conditions can also impact depreciation rates. Regular maintenance and keeping the vehicle in good condition can help slow down the rate of depreciation to some extent.

What is the average van depreciation rate in the UK? We compare small, medium, and large sized vans

As well as the make and model of the vehicle, the size of the van can also have an impact on the rate of depreciation. To give you a better idea of what to expect, here’s a comparison of the depreciation rates for small, medium, and large vans in the UK:

Small vans tend to have slightly lower depreciation rates compared to larger vans. This is partly because they are often less expensive to purchase initially, and they usually have lower running costs, which makes them attractive to buyers in the used van market.

Medium vans are the most popular size choice in the UK, which means there is generally a strong demand in the used van market. However, they also face more competition, which can lead to slightly higher depreciation rates compared to small vans.

Large vans tend to have the highest depreciation rates among the three categories. This is because they are more expensive to purchase initially, and they often have higher running costs due to their size and weight. Additionally, the market for used large vans can be more limited compared to smaller vans, as fewer businesses and individuals require vehicles of this size.

What can affect the depreciation rate of a van?

As we referred to at the beginning of this article, several factors can influence the depreciation rate of a van. Below, we explain what these are in more detail:

Make and Model

Some van makes and models are known for their reliability, low running costs, and strong resale values, which can lead to slower depreciation. For example, vans from tried and tested manufacturers like Renault and Ford tend to hold their value relatively well.

Age of Vehicle

As a van gets older, its value generally decreases. The steepest depreciation usually occurs in the first year, with the rate gradually slowing down in subsequent years.

Mileage

Vans with higher mileage will generally have a lower value and may depreciate faster than those with lower mileage.

Overall Condition

A van that is well-maintained and in good condition will typically hold its value better than one with significant wear and tear or damage.

Fuel Type

With increasing environmental concerns and government regulations in force, vans with more fuel-efficient or alternative fuel options (such as hybrid or fully electric models) may depreciate more slowly than those with traditional petrol or diesel engines.

Market Demand

The supply and demand for particular van makes and models can affect their depreciation rates. If there is high demand for a specific model in the used van market, it may depreciate more slowly.

Economic Climate

General economic conditions can impact the van market. During times of economic uncertainty, businesses may be less likely to invest in new vans, which can lead to slower depreciation for used vans.

Size and Type

As discussed earlier, the size of the van (small, medium, or large) can impact its depreciation rate, with larger vans often depreciating faster than smaller ones. Additionally, specialist vans (for example, those that are refrigerated or adapted for specific trades) may depreciate differently compared to standard panel cargo vans.

New Model Releases

When a manufacturer releases a new version of a particular van model, the value of older versions may decrease more rapidly as buyers opt for the latest model.

How to calculate the depreciation rate of a van

When investing in a new or used van, it’s important to understand and be aware of the rate in which it can depreciate in value. To calculate the depreciation rate of a van, first off you need to determine the initial value; start with the original purchase price of the van, including any taxes or fees.

Then, research the current market value of your van. You can use online valuation tools or check prices of similar vans being sold in the used market in your area. To calculate the total depreciation rate, do this by subtracting the current value of the van from the initial value to determine the total amount of depreciation. Use this formula: 

Total Depreciation = Initial Value - Current Value

To calculate the annual depreciation rate of the van (this is useful for second-hand vans), work out the age of the van, then divide the total depreciation (using the formula above) by the age of the van to determine the average annual depreciation rate. The formula will be:

Annual Depreciation Rate = Total Depreciation ÷ Age of the Van

To find out the van’s depreciation rate as a percentage, simply divide the annual depreciation rate by the initial value and multiply that number by 100 to get the depreciation rate as a percentage.

Depreciation Rate Percentage = (Annual Depreciation Rate ÷ Initial Value) × 100

So for example, let’s say you purchased a van for £30,000 (initial value) three years ago, and its current market value is £18,000, your calculation would be: 

• Total Depreciation = £30,000 - £18,000 = £12,000
• Age of the Van = 3 years
• Annual Depreciation Rate = £12,000 ÷ 3 = £4,000
• Depreciation Rate Percentage = (£4,000 ÷ £30,000) × 100 = 13.33%

In this example, the van has depreciated by an average of £4,000 per year, which equates to an annual depreciation rate of 13.33%.

Keep in mind that this calculation provides an average depreciation rate over the ownership period. In reality, depreciation is often steeper in the first year and then slows down over time. 

How to reduce van depreciation

While you can’t fully control the rate at which your van depreciates, it is possible to minimise the impact of depreciation by adopting several strategies. Here are our recommendations when it comes to reducing the van depreciation rate: 

Choose the right van

Select a make and model known for its reliability, low running costs, and strong resale value. Vans from manufacturers like Renault and Ford tend to hold their value relatively well.

Opt for a popular model

Choosing a popular van model can help ensure strong demand in the used market, which can slow down depreciation.

Maintain your van properly

Regular servicing, repairs, and upkeep can help keep your van in good condition, which can significantly slow down the rate of depreciation. Keep detailed records of all maintenance work which can improve the value at resale.

Keep mileage low

Vans with lower mileage tend to hold their value better. If possible, try to limit unnecessary trips and consider using alternative transport for longer journeys or when not on the job.

Look after it

Regularly clean and polish your van, and repair any damage promptly. A well-maintained exterior and interior can make your van more attractive to potential buyers and help maintain its value.

Avoid any customisation

Heavily customising your van can limit its appeal in the used market and increase depreciation. Stick with popular colors and standard features that have a much broader appeal.

Select the right time to sell

Timing can impact your van's resale value. Selling just before a new model is released or when demand is high (for example, before new registration plates come out) can help you get a better price.

Opt for fuel-efficient or electric vans

With increasing environmental concerns and government regulations coming into force, choosing a fuel-efficient or electric van can potentially help slow down depreciation as demand for these vehicles grows.

By implementing these strategies, van owners can take steps in a bid to reduce the impact of depreciation. However, it's important to remember that depreciation is a natural part of vehicle ownership, and some level of value loss is inevitable.

Do vans hold their value?

Vans, like most vehicles, are subject to depreciation and will lose value over time. Even the best-performing vans will still lose a significant portion of their value over time. On average, vans in the UK lose around 20-30% of their value in the first year and around 50-60% over the first three years.

Vans from renowned manufacturers with a reputation for reliability tend to hold their value better as not only are they more popular, but are a tried and tested product too.

What vans hold their value the most?

According to data from the UK's leading vehicle valuation companies, some of the vans that hold their value best in the UK market include:

Citroen Berlingo

The Citroen Berlingo's practicality and affordability make it a popular choice in the used market. This versatile and reliable workhorse has consistently demonstrated its ability to retain a significant portion of its original market price, making it an attractive choice for business owners and fleet managers alike. When compared to other small vans in its class, the Citroen Berlingo often emerges as a leader in value retention.

In stock now at Loads of Vans: Get your hands on a new Citroen Berlingo model for under £20,000 at our Surrey-based commercial vehicle dealership.   

Peugeot Partner

Similar in size to the Citroen Berlingo, the Peugeot Partner's combination of value and versatility helps it hold its value well. The Partner's reputation for durability, low maintenance costs, and impressive fuel economy has contributed to its excellent value retention, with industry experts recognising its potential for minimising the financial impact of depreciation. 

In stock now at Loads of Vans: Get behind the wheel of a new Peugeot Partner model for under £20,000 at our Surrey-based commercial vehicle dealership.  

Vans that don’t depreciate

Investing in the right type of van can reduce the amount a vehicle will naturally depreciate over time. Below, we’ve outlined the small, medium, and large-sized vans that hold their value the most:

When it comes to vans that hold their value, our Loads of Vans commercial vehicle dealership is the one-stop shop for the best-value new, nearly new, and used, petrol, diesel, and electric vans in London and the South of England.

Many of our quality vans are pre-registered, so you can take advantage of the fact that the initial depreciation from new won’t affect your purchase price! There are fantastic offers to be had on a wide selection of our vans, meaning that you can literally save thousands of pounds compared to buying brand new off the forecourt.   

View our current stock and make BIG savings today!  

FAQs and Answers

We hope our article all about van depreciation rates has helped steer you in the right direction when it comes to retaining the value of your vehicle. Do you have any more questions relating to this topic? If so, check out our frequently asked questions section below…  

How quickly do electric vans depreciate compared to petrol and diesel vehicles?

According to a report by Cap HPI, a leading UK vehicle valuation company, electric vans are expected to retain around 52% of their value after three years and 60,000 miles. In comparison, the average diesel van is expected to retain about 43% of its value over the same period. These figures suggest that electric vans may depreciate more slowly than petrol and diesel vans, particularly in the first year.

Do electric vans hold their value?

Electric vans are a relatively new addition to the UK market, so long-term depreciation data is limited compared to traditional petrol or diesel vans. However, early indications suggest that electric vans may hold their value well, and in some cases, even better than their combustion engine counterparts.

Why does a van depreciate in value?

Vans, like most vehicles, depreciate in value over time due to a combination of factors such as age, mileage, wear and tear, and market demand. Depreciation is a natural part of van ownership, and it's essentially the cost of using the vehicle over time. However, by understanding the factors that influence depreciation, van owners can make more informed decisions about purchasing, maintaining, and selling their vehicles to minimise the financial impact of depreciation.

How can I prevent my van from depreciating? 

While it's not possible to completely prevent a van from depreciating, there are several steps you can take to minimise the rate of depreciation, such as regular maintenance and repairs, keeping mileage as low as possible, driving sensibly to reduce wear and tear, and refraining from modifying the vehicle where possible. 

What is residual value?

Residual value, also known as resale value or residual price, is the estimated value of a vehicle at the end of a lease term or a set period of ownership (often common with finance agreements). In other words, it's the amount a vehicle is projected to be worth after a certain number of years or miles driven.

Why are second-hand van prices so high?

Second-hand van prices in the UK have been notably high in recent years. This hike stemmed from the worldwide COVID-19 pandemic which disrupted global supply chains, causing a shortage of new vans. As a direct result of this, a semiconductor shortage has further impacted the production of new vans. To top it off, the UK’s departure from the EU has led to delays in importing new vehicles which has driven up demand for second-hand ones.  

Get your hands on the top-value vans 

When it comes to finding top-value vans in the UK, we have established ourselves as the go-to choice for businesses and individuals alike. With a wide selection of high-quality vehicles at competitive prices, here at Loads of Vans, we offer a one-stop-shop for all your van needs. 

Whether you're looking for a reliable workhorse for your business or a versatile vehicle for personal use, our experienced team is dedicated to helping you. From well-maintained second-hand vans to the latest new models with advanced features, we have something for everyone. 

With our commitment to excellent customer service, transparent pricing, and a hassle-free buying process, it's no wonder that we have become the preferred choice for those seeking a top-value van in the UK! 

***CLEARANCE SALE AT LOADS OF VANS*** 

Take advantage of our HUGE clearance offers on a selection of vans, including the Renault Kangoo, Renault Kangoo E-Tech, and Renault Trafic. Crowned Small Van of the Year, right now you can save over £3,000 on a Kangoo! 

Do you drive in London? Why not escape the ULEZ and Congestion Charge with the all-electric Kangoo E-Tech and save a whopping £11,000! But that’s not all, save over £6,000 on the popular Renault Trafic van which is in stock and ready to drive away today. These offers are not to be missed!