Fleet News

Warning over van residuals

THE van market could find challenging times ahead for residual values following years of sales increases.

Manheim Europe believes that a 20% increase in the new van market last year could affect residual values when they arrive on the used vehicle market.

Business has increased at commercial vehicle auctions as a result of new sales and according to Alex Wright, commercial vehicle sales director at Manheim Europe, these new sales will make their way through the auctions.

He said: 'We will see the extra 20% of vehicles come through the auctions and the leasing companies are already thinking about their disposal methods. The light commercial vehicle market is volatile and the level of supply and demand can change quickly.'

He said the split in the market between newer and older vans still remained, with vans up to two years old sensitive to discounts on new models.

'There is a strong dividing line in the market between vans up to two years old and vans more than two years old,' said Wright.

'The less-than-two-years-old market has been completely unpredictable and this is directly related to manufacturers discounting new van prices.

'Vehicles more than two years old are always in demand from the self-employed market and prices have been stable.'

The warning came as Manheim revealed that a two-tier marketplace was expected to develop this year, with vehicle condition governing success at auction.

Martin Potter, sales director for fleet and leasing, warned that demand for well-kept vehicles below 65,000 miles would continue to be strong, while those above 85,000 miles could cause problems for vendors.

He said: 'There will be a two-tier marketplace in the corporate sector, with demand for vehicles below 65,000 miles which include full service histories and V5 documents. Those with more than 85,000 miles, perhaps caused by lease extensions, will be less desirable and will need to be in good condition to find buyers.'

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