Fleet News

Used van market shows signs of recovery

The downturn in used van values, which has caused major problems for rental and lease companies and fleets who carry their LCVs’ residual risk, appears to be abating.

“The marketplace is proving particularly difficult for rental and leasing companies with a lot of late year stock to shift, yet things are not looking quite as bad as some had feared,” said George Alexander, editor Glass’s Guide to Commercial Vehicles Values.

“Providing consumer confidence does not deteriorate much further, and the volumes of vans coming up for disposal are properly managed, it seems that the threat of plummeting prices in a dormant market has, for the time being, been averted.”

However, the used LCV market is still teetering on the brink of collapse.

“With supply now outstripping demand, auction conversion rates have fallen back,” said Alex Wright, sales director, commercial vehicles, Manheim Auctions.

“The outlook for the rest of the year remains uncertain, albeit the current price falls are generally commensurate with seasonal patterns.

"This may indicate a level of stability arising, but the big proviso will of course be the dependency on continued activity in the retail market.

"The positive message for vendors is that there is still demand in the market.”

With over supply still plaguing the sector, defleeters must ensure their vehicles are clean, have full documentation and are as attractive to possible to buyers.

Including all documents are with vans going in to auction is critical, said Ken Brown, CAP current valuation manager, light commercial.

Buyers are unwilling or unable to wait the several weeks it takes to get duplicate documents before selling on vehicles.

Instead, with quality used vans so plentiful, they are opting to bid only on vans supplied with their documents in place.

“There is clear evidence of traders reducing stock levels and only offering serious bids for the cleanest vehicles,” he said.

“Last month’s brief positive sentiments have flown out of the window with retail dealers now having a tough time, although sentiment among LCV dealers has not nosedived.

"The next two months will be crucial.

“Looking forward to next year, there is some cautious optimism.

"But really what is happening is values are falling back to late 2006, which is before the supply issues with new LCVs came into play last year.

“There is clear evidence of traders reducing stock levels and only offering serious bids for the cleanest vehicles.

"There is over-supply of certain models, particularly the Combo, Ducato, Relay, Master, Movano and Vivaro.”

 

 

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