Used van prices fall in June
Average monthly values for LCV’s continued to slip in June, making it two consecutive monthly falls on the back of the record levels reached in April of this year, according to BCA’s latest Pulse Report.
LCV values averaged £4,280 across the board in June, a fall of £186 (4.1%) against May’s values, with both fleet & lease and part-exchange values decreasing, while nearly-new posted an increase.
Average fleet/lease values fell by £164 (3.2%) to £4,909 – a back-to-back fall following a run of six consecutive ‘record months’.
Part-Exchange values fell by £74 (2.8%) to £2,482 in June.
In contrast, nearly new values increased to £10,950 in June from £10,311 in May – a £639 (6.1%) rise over the month. Volumes remained low as they have done for many months.
As has been the case for a number of months, year-on-year values remain higher than those recorded in 2009 – by over £600 in June - and average monthly values remain well ahead of the £4,000 ‘price barrier’ that was breached for the first time in December 2009.
Reflecting this second monthly price reversal, CAP figures for used LCVs dropped from an average 99.95% across the board, to 96.3%, with the biggest relative drop in the nearly new sector (down some 8 points). Perhaps more tellingly, however, conversions have slipped by as much as 15 percentage points over recent weeks, leaving stock unsold in greater volumes than the market has seen for some time.
Duncan Ward, BCA’s General Manager Commercial Vehicles commented “We reported last month on a subtle slowing of demand in the used LCV market seen over recent weeks. It seems some of that market seasonality is creeping back into the figures, and if we look at June 2008 and 2009, values in both months dipped after stronger May results.
Ward added “We’ve recently seen a bit of a turning point in demand. Van dealers are finding it more difficult to churn their existing stock because retail sales have eased off; and when that happens they are not bidding as strongly in the halls or online for replacement vehicles. However, demand is far from flat, it’s just not as strong as we saw earlier this year. What we may be seeing is a return to a ‘normal’ level of business and some of that much hoped for price stability in van prices - at a level that compares very favourably with 2009 values.”
Fleet & Lease Vans
With a fall of £164 compared to May, average values for fleet & lease vans dipped below £5,000 for the first time since January. Despite this, year-on-year values are over £1,150 higher in June 2010 and nearly £1,900 ahead when compared to the bottom of the market in December 2008.
Ward commented “To put the recent levels of demand into context, a ‘record’ monthly average value of £4,161 was achieved in January 2008 and stood for 19 months. Every one of the past 10 months has exceeded that figure, often by 20% or more.”
“And while prices have stuttered in the short term, the long term prognosis is for values to rise again. Reduced new van sales mean there will not be the volumes of used vans around to support what is likely to be an increase in demand from 2011 onwards as the economic situation hopefully improves.”
“We’ve already seen a shortage of vehicles because operators have been extending the leases on the vans they’ve already got and operating them for longerrather than replacing them given the current economic climate. Those vans will now be coming off contract, and will be older and more travelled. As a result, over the next six to 12 months the average age and mileage of the vans we sell is likely to rise.”
Ward commented “However, once these vans have gone through the system, there is every chance the market will feel a shortage of stock, because there is no volume of stock following behind these vans. We may even see one or two organisations disposing of their vans when they’re two years old to fill that gap and get a premium price.”
Part-Exchange Vans
Average values for Dealer-entered part-exchange stock fell for the third time in six months, with £74 (2.8%) coming off the value in June. As indicated last month, price pressure is typically experienced in the used LCV market over the summer months so this should come as no surprise. Values remain well ahead of where they were over much of the preceding 24 months and year-on-year, June 2010 is £470 or 24% ahead of the equivalent month last year.
Nearly-new Vans
In contrast, nearly new values increased to £10,950 in June from £10,311 in May – a £639 (6.1%) rise over the month. Volumes remained low as they have done for many months and prices are erratic as a result. Performance against CAP fell sharply by around 8 points.
