Van market booming
- Volumes of used LCVs coming to auction continue to rise
- Registrations of new LCVs rose for the third straight year in 2015 with a record of 371,830
- April new registrations up 11.7% year on year
- Values of used LCVs continue to increase according to the latest NAMA data
USED van values keep rising despite more coming to auction and record registrations of new LCVs, according to Alex Wright, managing director of Shoreham Vehicle Auctions.
Over a four-year period from January 2012 to December 2015, the average number of newly registered LCVs has rocketed, with a record number of units registered in 2015 – 371,830 – the highest since 2007. This has resulted in a delayed influx of vehicles into the used market, with volumes steadily rising over the same period.
Despite these increases, average used prices have also continued to rise, against the expected drop in prices from the industry. Driving this trend that used van values keep rising is extremely strong demand from buyers, who have a varied selection of stock in good condition to choose from, particularly with vehicles between two and four-years-old.
Previous dips in used values in July 2013 and April 2015 quickly rebounded, with prices steadily rising once again.
Alex Wright said: “It’s remarkable that prices continue to rise in line with increasing volumes, although we expect to reach the tipping point where supply outstrips demand, which will place pressure on prices, but recent trends have defied this so far.”
With increasing numbers of SMEs purchasing LCVs between two and four years’ old on short-term PCP deals, vehicles are then being sent back into the auctions for the manufacturer’s franchised dealers to purchase at a reduced rate.
Furthermore, SMEs that cannot secure vehicle finance are heading to auction to secure LCVs between four and six-years-old, in good condition and at reasonable prices.
Continued strong demand is helping to keep the market buoyant and prices high.
According to the latest LCV manufacturing data, there’s no sign of LCV registrations letting up, with 27,880 new units registered in April 2016. This was an 11.7% increase on the April 2015 total, and year-to-date a 3.3% increase on the first four months of last year.
“The record number of new registrations we have seen in recent years that continue to filter into the used market will only lead to volumes rising. One thing is certain; it’s not a question of if, but when and by how much values start to drop as the careful balance of supply and demand starts to tip,” added Wright.