BCA Pulse: Used LCV values falls to annual low in June
However, year-on-year, June 2012 was ahead by £31 (around ¾ of one per cent) compared to the same month in 2011, despite the average age climbing by over six months (up 13%) and average mileage increasing by 7,500 (up 11%). Performance against CAP slipped year-on-year, but only by a quarter of a point.
Duncan Ward, BCA’s general manager – Commercial Vehicles commented, ‘The market tends to slow down in the early summer and we have also had a short-term hangover from the Jubilee double Bank Holiday.
‘In fact, June brought a much needed reality check to the used commercial sector. There was almost an expectation from vendors that dealers will continue to pay ever higher prices for older, higher mileage vans because stock is short in supply. However, buyer confidence in the wholesale market is quite fragile and there is an increasing reluctance to buy poorer condition or excessively travelled vans because of the investment required to get these vehicles ready for retail,’ he added.
‘In many ways the trade buyer is being squeezed from above and below. Competition for stock has forced prices up, while the retail customer – the small business or sole trader – wants even more van for their money when they walk onto a forecourt.
The dearth of stock has kept values high as economic confidence is still reported to be flatlining. According to the CBI, retail activity is subdued and uncertainty over the economic outlook is putting a brake on spending across the whole consumer sector. Small businesses are being particularly hard hit as they have no excess to trim back, so cost-cutting often takes the form of deferring expenditure – and if a replacement van was on the agenda for 2012, maybe that will be reviewed and postponed for another 12 months,’ he said.
Ward concluded: ‘We have been advising our sellers for some time to review their remarketing activity to ensure their vans are presented in the most saleable condition. Vehicles must be appraised sensibly and methodically and valued in line with market sentiment. Pre-sale preparation and presentation is important, and all the documentation and service histories should be present when vans are sold.’
Unsurprisingly, values in the fleet & lease LCV sector declined from May’s 24-month high, falling by £148 (2.9%) to £4,965. Performance against CAP dropped by around a quarter of a point to 97.8% over the month, while retained value against Manufacturer Recommended Price over 44 months and 70,000 miles was 31.68%, down a point on last month.
Despite the month-on-month fall, the year-on-year figures again highlight the longer term value growth across the fleet & lease sector. June 2012 was £352 (7.6%) ahead of the same month last year – despite the average van being two months older and 7,000 miles higher this year.
Part-exchange values also fell, declining from May’s record value of £2,924 to £2,845, a £79 fall equivalent to 2.7%, with CAP comparisons falling by a point to 97.07%. Year-on-year values remain well ahead, however, by £398 or 16.2%, with age and mileage parameters remaining broadly static.
Nearly-new values fell by £1,056 to £11,003. As always, this has to be taken in the context of the very low volumes reaching the market and the model mix factor. CAP performance improved by nearly three points to 103.43%.