Used van market feels credit crunch squeeze

The market for used commercial vehicles has slowed down significantly in recent months, and a further decline is expected over the summer.

However, hopes in the industry are high that the market may pick up again over the spring.

The traditional summer slowdown and low customer confidence due to the uncertain economic outlook look set to make summer difficult, according to EurotaxGlass’s.

The worst potential outcome is that prices are driven ever lower as more vans are offered to a shrinking customer base.

But George Alexander, the chief commercial vehicle editor at EurotaxGlass’s, said: “Providing volumes do not grow too much in a sluggish marketplace, and with the hope that by the start of winter the worst of the country’s economic problems are in remission, things could look more promising by spring 2009.”

Prices are falling in all commercial vehicle sectors after months of stability. Most of the weakness is in vans with high mileage or damage – other falls in value represent little more than standard movement driven by age and wear and tear.

Mr Alexander said economic woes and fuel prices were putting pressure on small businesses that make up the vast majority of a dealer’s customer base.

“Currently, the mood amongst dealers is relaxed. Sentiment for the nicest used stock has held up well, although it is clear that few have the appetite for untidy vans at any age, with the market feeling as though the summer turndown has come early in 2008.”

Popular models in the LCV market at the moment include good condition Vauxhall Corsa and Ford Fiesta vans achieving prices close to guide values.

Examples of Citroën Berlingos, Renault Kangoos, Fiat Doblos and Vauxhall Combos are also sought after by dealers, especially those with side-loading doors. Also popular are Ford Transit Connects, old-style Citroën Dispatches and Peugeot Experts.

However, even the best condition Vauxhall Astravans are struggling as discount deals are available on new versions.

Meanwhile, Manheim reports that the average age of second-hand vans is on the up. From March to May the average age rose by five months in panel vans and seven months for tippers.