Van prices still falling

According to BCA’s latest Pulse Report, average values for LCV’s fell for the third consecutive month in July, as the slower summer season took hold of the market.  It is not unusual for some market issues to surface in the holiday period and BCA believes this should be judged as typical seasonality – a factor only seen returning in recent weeks.  The effect of the slowing market is no doubt exacerbated by the fact that LCV values reached record levels as recently as April of this year.

LCV values averaged £4,112 across the board in July, a fall of £168 (3.9%) against June’s values, with nearly-new, fleet & lease and part-exchange values all decreasing.  The fall is on a par with that seen in June, when values decreased by £186 or 4.1%, although the market dynamics have changed over the past few weeks.

Average fleet/lease values fell by £79 (1.6%) to £4,830, just half the fall seen in the previous month of June (when values decreased by £164 or 3.2%).  Values have now fallen for three months in a row, following a run of six consecutive ‘record months’. 

Part-Exchange values fell by £187 - a relatively significant drop for this budget-priced sector, equivalent to an 8.1% decrease (compared to a 2.8% decrease in June).

Nearly new values fell from £10,950 in June to £10,875 in July – a £75 (0.6%) decrease.  Volumes remain low as they have done for many months and model mix will have had a major part to play. 

As has been the case for a number of months, year-on-year values remain higher than those recorded in 2009 – by £546 or 15.3% in July - and average monthly values remain well ahead of the £4,000 ‘price barrier’ that was breached for the first time in December 2009.

CAP figures for used LCVs were relatively stable over the month, recording a small increase (a quarter of a point) over June.  CAP values rose for both nearly-new and fleet vans, while Part-Ex vans fell back marginally.  Conversions continue at a lower level than earlier in the year, but did not slip over the month and sold volumes actually grew by nearly 4% compared to June.  Unsold stock is an issue on some higher volume models, and pricing strategies for vendors need to be very much in line with market sentiment.

Duncan Ward, BCA’s General Manager Commercial Vehicles commented “We reported that seasonality was having a bigger effect on market dynamics in recent weeks.  The summer months are traditionally quiet in terms of wholesale churn and this impacts directly on price.”

Ward added  “While demand is softer than we have seen for some time, we expect September and October values to rally alongside increased levels of business.  The long-term prognosis is for an increase in demand as the economic situation hopefully improves.  The smaller numbers of new vans going ‘on fleet’ over the past 30 months or so means the marketplace may well experience a shortage of certain ages and types of product.  This will inevitably lead to rising prices in an improving marketplace.”

Fleet & Lease Vans

Despite falling by £79 last month, average fleet/lease values were nearly £1,000 higher than they were in July 2009 and nearly £1,200 ahead of the same month two years ago.  Values are over £1,800 ahead when compared to the bottom of the market in December 2008.

Part-Exchange Vans

Average values for Dealer-entered part-exchange stock fell for the third month in a row, with a significant drop of £187 or 8.1% to £2,295 recorded over the month.  Despite this, year-on-year values are £348 or 16% ahead of the equivalent month last year.

Ward commented “The budget sector had seen rising prices due both to the growing demand and relatively slim volumes of stock available.  Those factors are now less apparent and values have softened as a result.”

CAP Values fell slightly but at 95% remain relatively strong for a sector with an average age approaching seven years and nearly 90,000 miles.

Nearly-new Vans

Nearly new values fell to £10,875 – only the second fall in value recorded this year.Volumes remained low as they have done for many months and prices are erratic as a result.  Performance against CAP improved by nearly a point to just under 99%.