Average LCV values still falling in October
Average values for LCV’s continued to fall in October and are now holding just above the £3,000 watershed, according to the latest data from BCA.
The average value for all vans sold by BCA fell to £3,083 in October, down by £107 or 3.3%, the biggest fall since June when values tumbled by around £250. Both fleet & lease and part-exchange values continued to decline, while nearly-new values rallied slightly, this largely due to a changing mix within the limited numbers sold during the month. The current average values of LCV’s are around £800 behind those recorded earlier in the year.
Fleet & lease vans fell by £128 (3.6%) to £3,353, with average mileage coming down by over 3% and average age remaining static. There was also a very significant downward move of nearly six points in CAP performance last month, which now sits at under 78%.
Duncan Ward , BCA’s UK Business Development Manager – Commercial Vehicles, comments “Fleet & lease vans represent the biggest volume sector at auction and consequently the most consistent pressure in terms of price has been felt here. While there was a small rally in April, prices have generally been moving downwards all year and are now £808 – or 19.4% - behind the January highpoint. Most notably, the guide prices appear to be out of step with the market realities being faced by vendors. During the January peak, fleet and lease vans averaged over 93% of CAP, yet now that figure is 77% - on stock that is actually younger and lower mileage.”
Ward added “This sector relies on a steady and confident economy for the small businesses and solus traders who are strong buyers in this price range and age of stock - either directly or via a retailer. As the economic turmoil has intensified in 2008, small business confidence has ebbed away and this is reflected in van-buying activity. It remains to be seen if the recently announced 1.5% base rate cut will stimulate activity in the short term.”
In contrast, the budget sector – up to £2,000 – remains lively. Professional buyers know that vans in this price range can often be retailed without resorting to finance, which has kept a little more buoyancy in the sector. Consequently, prices for part-exchange vans have been relatively level over recent months, and despite a fall last month from £2,032 to £1,938 there has been little significant change since May.
Volumes of Nearly-new vans at auction are very low, so model-mix can have a strong influence on values. Values appear to have bottomed out in recent months and have even started to climb again. However, the overall trend is clear and values have been under pressure in 2008, being some £1,800 behind the January highpoint.
Ward concluded “We are expecting greater volumes of stock in Quarter 4 and that may well further impact on price points. In fact, we are unlikely to see improvements in LCV values until buyers feel confident that the economy shows signs of recovery.”
