AUCTIONS: CV market enjoys a mini-boom
01 May 2009
The start of the year marked a turning point for the sale prices light commercial vehicles were achieving at auction, writes Tony Rock
Things are definitely beginning to look up in the van market, with auction giants BCA and Manheim reporting a rising trend in average values since the turn of the year.
Manheim's figures show that values were up 5.5% in January, 1.8% in February and 3.6% in March, adding £277 to the average price since December despite an increase in age and mileage, while the numbers reported by BCA are even more eye-catching - average van values climbed in March by 13.6% to £3544, a rise of £427 against February and £772 ahead of December's low point of £2772.
Even prices compared with Cap's average guide values improved by 3.3 percentage points between February and March to break the 100% barrier for the first time since 2007.
Despite the improvement there is still some way to go to recover the ground lost last year when the market, in BCA's case, peaked at £3868 in January 2008. However, the outlook is undeniably positive.
"Some dealers are reporting exceptional retail demand and have been busy replenishing their forecourts in response," says Duncan Ward, BCA's UK business development manager - commercial vehicles.
"Vans that appeared too expensive for the marketplace last year now seem to have washed through."
Alex Wright, sales director, commercial vehicles at Manheim also notes a change in buying patterns among the specialist independent dealers, who take more than 60% of the vans sold by Manheim and who primarily supply the self-employed market, which drives much of the demand for used vans.
"No longer are trade buyers simply selecting vehicles based on fulfilling pre-sold orders or to fill gaps in stock," he says. "They are back buying in volume, in some cases buying lower value stock to vary the offering on their forecourt.
"There is also an increase in the number of private buyers, which has led to record sale attendances, improved conversion rates and increased sale values."
Ward suggests a couple of factors that have contributed to the increased demand. Firstly, he believes many small businesses will have ring-fenced the troubles of 2008 and are now moving on and looking to the future.
"With the start of the new financial year, new budgets will be in place and many businesses will look to replace any long-in-the-tooth vehicles with newer, more efficient models," he explains.
"Despite the recent rises, the used market still represents excellent value for money."
Secondly, he says job losses have had an effect, but not the kind of impact that would normally be expected.
Ward explains: "There are increasing numbers of redundancies in manufacturing and engineering, and many of these will be skilled tradesmen and women who will strike out on their own. The first thing they will buy with their redundancy money is a van."
In the coming months the age of that van and the mileage it has covered could well be more than it has previously been, on the basis that many lease and finance companies are actively encouraging contract extensions.
However, as Manheim's Wright says: "That is not necessarily a bad thing as the vans become more price attractive for buyers."