Fleet News

Demand from SMEs will combat surge in vans hitting the used market

The growing demand for used vans by small businesses will counteract the increasing number of light commercials currently hitting the used market, according to Alex Wright, managing director of Shoreham Vehicle Auctions.

Thousands of used vans are being launched into the market through recent company collapses, and the decision by GE to pull TLS out of the van rental market.

But Wright believes the demand for two to three year old light commercials from small companies unable to secure credit lines for brand new vehicles will absorb this peak in supply.

“In early 2009 the new and used market collapsed because reduced lines of credit immediately prevented van retailers stocking large amounts of vehicles. Any stock they did have they had to sell quickly, often at a reduced price to reduce their gearing. This damaged the used market for quite some time and was one of the major reasons behind the dip in market prices,” said Wright.

“In 2011 the used market is in a very different place with used van retailers in particular with longer term funding in place which guarantees stability for their stocking arrangements.

“There is currently a pent up demand from small companies looking to buy a used van to replace their ageing vehicle, as continued credit restrictions preventing them from buying a new van,” said Wright.

“The management of vehicles strategically back into the used market is also attributing to a strong used market. Contract hire and finance companies are managing stock back into the used market very responsibly as they want to protect the value of their assets by not distressing the market with oversupply over a short period. This is good news for the entire used van market entering 2011,” said Wright.

“The current strong demand created for used stock will push 2011 prices to some of the highest ‘percentage of cost new’ we will ever see. The demand will be strong enough to force end users such as SMEs back to seriously considering buying new vehicles again,” he added.

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