LCV residuals predicted to keep on climbing
05 October 2009
Used van values have soared to their highest level since April 2008 and are set to keep rising.
Both major auction houses, Manheim and BCA, have recorded an increase of more than 5% in values from July to August. Average prices increased by £183 and £179 at Manheim and BCA respectively. Used value experts predict the rises will continue through the end of 2009 and into next year.
"Going on one or two years you could see periods of residual strength not seen since the late 1980s," said George Alexander, chief commercial vehicle editor at Glass's guide. "We're looking at a very strong 18 months or two years ahead."
Both BCA and Manheim say the rises are especially notable given that the summer months are traditionally harder for used values. Duncan Ward, BCA's general manager commercial sales, said: "August proved to be a remarkably strong month for LCV sales and certainly outperformed the customary 'summer holiday season' market."
Glass's Alexander said the test was the 4x4 double cab market. "They were very badly hit," he said "When we saw that getting stronger it was obvious the momentum was getting stronger."
This was supported by Manheim's latest sales results for the double-cab market - the auctioneer says values are 48.3% (£2023) higher in August than they were in February this year.
However, not all RV forecasters share Glass's optimism, with Mark Jowsey of Kwikcarcost exercising caution. He advises that a lot of vehicles were pushed onto four-year contracts, so may not be in as good condition as possible. "RV projections at the moment are still a bit cautious," he said, saying this was down to the market having been so volatile over the last 18 months.
However, he said: "Condition is critical. The looked-after product will find a home well."
FOLLOW BUSINESSCAR ON TWITTER