‘Changing marketplace’ for used LCVs, reports Cox Automotive

May was another record-breaking month for LCVs, according to Cox Automotive, but it warns of changing conditions that the industry needs to monitor.

Last month was the fifth in a row to see increased volumes of used LCVs hit the wholesale market via Manheim.

A total of 7,626 commercial vehicles were received by its Manheim Auction Services and Manheim Vehicle Services, a further 8% increase on April and in line with the 15.3% year-on-year increase in new LCV registrations, reported by the SMMT.

As expected, there was the usual seasonal easing of used LCV buyer activity and Manheim’s May stats show a slight softening of Euro 5 and Euro 6 prices, but overall values remained significantly above pre-pandemic levels. Manheim recorded an average selling price for Euro 5 vehicles of £4,660 (with an average age of 10 years). For Euro 6 vans the price was £11,619 (with an average age of four years).

The profile of used LCVs entering the wholesale market continues to change, with both the average age and mileage rising to 80 months and 82,000 miles respectively. Vehicle return damage is also much more prevalent: 62% of the vehicles Manheim handled during May had more than £2,800 worth of return damage on average, a year-on-year increase of 26%.

Stock numbers are increasing but the usual seasonal quietening of the wholesale LCV sector has made its presence felt. Even though 75% of vehicles sold first time through Manheim’s auction lanes, that’s still a 7.5% decrease compared to 2023’s exceptional first quarter.

Matthew Davock, director of Manheim Commercial Vehicles, Cox Automotive, said: “May has seen something of a calming in the fervour and activity we’ve seen in the first quarter of 2023, but it was nevertheless another positive month for the LCV market.

“Several factors can explain the seasonal quietening, the bank holidays for one thing and the traditional slowing of the retail market as we hit the summer months for another.

“Our mileage and age statistics point to the fact that commercial vehicles continue to be worked harder and longer than experienced historically. Clearly, dealers would prefer not to buy excessively pandemic-worn vehicles, but the greater choice on offer shows that they have a better opportunity of finding the vans they want now than at any point since early 2020. This is placing a pressure on guide values, as illustrated by May’s 3.3% drop versus the Q1 average.” 

Popularity of physical auctions on the rise

Manheim’s May data also shows that growing numbers of buyers are choosing to attend auctions in person. While online continues to be the dominant choice, 31% of LCV sales were to a buyer in the hall during May, a steady increase on previous months. Interestingly, 46% of Euro 5 stock was snapped up by a physical buyer, suggesting the in-person option is proving to be especially popular with customers seeking out older, more miles-on-the-clock vehicles.

The company noted the importance of a flexible sales programme – which helped vendors reduce their average days-to-sell to 11 days from collection-to-sell, a notable drop from the 16 days recorded for the same period in 2022.

For July and August, Davock  believes that all car, LCV and HGV market sectors will continue to see much higher wholesale volume levels – giving more choice for buyers but requiring sellers to be careful around setting realistic pricing that incorporates damage, mechanical wear and wider retail market factors.

“May and June are traditionally a quieter period,” he said. “It’s the time when we see a natural shift in the marketplace.

“However, although there’s been a bit of a seasonal bite and a reduction in overall activity, there’s still clear evidence that things remain positive for the LCV wholesale sector.”