LCV demand unseasonably strong in August
BCA recorded unseasonably strong demand in the LCV sector during August, traditionally a month that sees lower values. Average values for fleet & lease, dealer part-exchange and nearly-new vans all rose, and for the first time all three sectors achieved over 100% of CAP values.
According to BCA’s Pulse report, average used LCV values across the board improved in August by £179 (5%) to reach £3,745 – the highest point since April 2008. Year-on-year values were ahead by over £500.
Average fleet & lease van values improved by £203 against July (up by 5.2%) to reach £4,045 – the first time the £4,000 barrier has been breached in sixteen months. Dealer-entered part-exchange stock rose by £160 (7.5%) following a 9% rise in July and, after a sharp fall last month, nearly-new values recovered by over £1,000 to £9,034 - the third highest average monthly value in this sector this year.
The average performance against CAP across the board reached a new highpoint of 101.67% in August and, for the first time on record, all three sectors averaged over 100% of CAP in the same month. Duncan Ward, BCA’s General Manager Commercial Sales commented “August proved to be a remarkably strong month for LCV sales and certainly outperformed the customary ‘summer holiday season’ market.
He continued “Supplies of good retail quality vans were relatively limited and buyers were bidding strongly for the best examples – particularly from the fleet sector where competition was intense. A number of corporate vendors recorded 100% sales conversions for the first time, and many sales averaged over 100% of CAP across the board.”
“Professional buyers who would usually buy stock exclusively from corporate sources were having to look further afield and were bidding on younger or older vehicles to stock their forecourts.”
Ward explained “The end result was to increase demand not just for fleet and lease vans, but also for the nearly-new and the dealer P/X vehicles. Increased buyer traffic on BCA’s Live Online internet bidding service also suggested that dealers were looking far and wide to meet the needs of their retail customers.”
BCA’s report asks the question that with September values traditionally representing a peak in the annual price cycle, could values be climbing again following a period of five months when they have remained fairly static?
Ward commented “As this has occurred in a month that usually records weaker prices, this could yet mark a significant point in the price recovery for LCVs. If such a rise had occurred in September, it would have been equally welcomed by vendors, but much less notable. It remains to be seen if the market is going to march on into the Autumn months and perhaps consistently register values to compare with the market highpoint in early 2008.”
Fleet & Lease Vans
Average fleet & lease van values improved by £203 against July (up by 5.2%) to reach £4,045. Performance against CAP improved again to 101.55% of CAP, to record the highest average point this year to date. Average age and mileage at remarketing have moved very little this year, with no obvious signs of contract extensions. Year-on-year, August 2009 is £537 (15.3%) ahead of the same period last year. August 2009 values are over £1,000 (34.2%) ahead of the low point recorded in November last year.
Part-Exchange Vans
For the second month running there was a sizeable increase in average values for dealer-entered part-exchange stock, with the rise of £160 (7.5%) following the 9% rise in July. CAP performance rose three points to clear 100% for the first time on record – underlining the strong demand seen in August as these vans average over six years old and 80,000 miles plus. Year-on-year values were ahead by £400 or 21.1% as prices were falling sharply in the comparative month last year.
Nearly-new Vans
Following a sharp fall last month, nearly-new values recovered strongly in August, climbing by over £1,00 to £9,034 to record the third highest average value in this sector this year. Demand is high – for the reasons outlined above – with the end result that performance against CAP rose yet again to over 108%, having been at 106% in July.
