LCV values at BCA fell 5.9% in October, hitting the lowest average monthly LCV value recorded since December 2020 when the UK was in-between lockdowns.
While values saw a brief recovery in September when they rose by 4.1% (£368) month-on-month to £9,247, the overall value trend in 2023 has fallen steadily since April’s highpoint.
October recorded a further fall to £8,705, down by £542 month-on-month, as professional buyers continued to react to the tough economic conditions affecting the wider market. The small business sector, which represents the biggest purchaser of used LCVs, has been particularly hard hit, according to BCA.
Performance against guide price expectations averaged 98% last month, which suggests that despite the pressures buyers and sellers are broadly in tune on price expectations.
BCA said much of the steady fall in average values this year results from the changing mix of stock and rising numbers of lower-grade vehicles reaching the marketplace in recent months.
It also points to the ongoing recovery of the new van market – up by 28.1% in September and 17.7% in October as the supply shortages abate, taking demand out of the used LCV sector.
Anecdotal buyer feedback suggests the used LCV retail market is exceptionally tough across all sectors and LCV values notably “stuttered” late October ahead of the publication of the November price guides.
Monthly buyer numbers at BCA continued to increase, however, and sold volumes of light commercials remained consistent.
BCA also noted that demand for the very best condition light commercial vehicles continued to significantly outstrip interest in more poorly presented vehicles.
Stuart Pearson, BCA chief operating officer UK, commented: “As we have reported in recent weeks, we have a two-tier market operating, where well-presented, higher-grade vehicles attract a lot of competitive bidding, while older, lower-spec volume models can be challenging to remarket, particularly if they require repair and refurbishment.
“Compared to the previous 24 months where new and used supply was constricted and demand was high from retail customers, the current position is an almost complete reversal. Used volumes are lifting and there is more choice around new LCV supply, so it should not be a surprise to see values moving downwards.”
He also highlighted that the LCV market isn’t being hit by the same pressures as the retail car sector – while BCA’s car values rose 1.9% last month, the price guide experts at Cap HPI reported a 4.2% drop across the board. However, small business van users are being cautious on vehicle replacements.
“The market remains very price-sensitive and is likely to remain so as we move into the festive period,” Pearson added. “There will undoubtedly be some seasonality at play, however, with values moving to a level that many feel are more realistic and supply becoming more readily available. These factors could help to kick-start a little more positivity in the wholesale market as we cross into the new year.”
