Used LCV market begins to soften after record year

The used van wholesale market is beginning to soften after a year of record high prices and demand.

Matthew Davock, director of commercial vehicles at Cox Automotive, believes the wholesale performance of the past 12 months will never be witnessed again, but warns that the early part of next year, at least, looks to continue similar trends.

He said the market is likely to reposition itself when stock shortages are resolved halfway through 2022.

According to Davock, The shortage in the supply of used Euro 6 vans and demand for vehicles that comply with emissions zones such as ULEZ, will impact the market for the next few months at least, affecting wholesale stock dynamics for at least the next three years.

It’s expected 2022 will look different to today, with many fleets prioritising Euro 5 age returns, which will dictate the wholesale headlines. Eventually, the year ahead will see older stock values reduce, as buyers focus on ULEZ compliance.

Shoreham Vehicle Auctions (SVA) says ex-fleet vans between three and five years of age continue to have a huge following, which is contributing to continued high prices. The VW Transporter and Ford Transit Custom with a good specification and in the right colour are particularly sought after by dealers for their SME customers.

The supply of ex-local authority Euro 5 stock reaching the used market in response to the London, and more recently the Portsmouth, Low Emission Zone restrictions continues to rise. Typically, seven-to eight-years-old, they are generally in fantastic condition and with a full servicing history which attracts CAP Clean plus prices.

Euro V vans continue to find new homes with local businesses that work in areas of the country that are unaffected by Emission Zone regulations.

November 2021 saw a return to four-figure average used selling prices at Manheim, ending five consecutive months above the £10,000 price barrier. The average van mileage recorded by Manheim continued at levels not seen for over a decade, reaching 1,420 more miles compared to October to the highest point of 2021, at 86,875 miles. The first-time conversion rate remained identical to October’s recording of 77%.

The company’s auction data continued to demonstrate a significantly older profile of commercial vehicle with average age at 72 months, a six-month increase from October. The average age of vans hit a five-year high, at six years during November – 10 months older (and with 14,073 more miles) than the year-on-year average.

Davock said: “Euro 5 vans, with an average age of 98 months and 109,094 miles, achieved an average selling price of £5,934. Meanwhile, Euro 6 vans, with an average age of 40 months and 61,939 miles, achieved an average selling price of £14,477. In total, £8,543 separated Manheim’s average Euro 6 performance during November versus Euro 5 product, which again demonstrates the two-tier market we are witnessing.”