This year’s extraordinary used van market is starting to show signs of retail softening, ahead of bigger changes expected next year, according to Manheim.
It’s reported its strong year ever for used van values and Matthew Davock, director of commercial vehicles, says that the wholesale performance for the past 12 months will never be witnessed again.
The firm’s November auction results showed several key milestones, including a return to four-figure average used selling prices, ending five consecutive months above the £10,000 price barrier.
The average van mileage recorded by Manheim continued at levels not seen for over a decade, reaching 1,420 more miles compared to October to the highest point of 2021, at 86,875 miles. The first-time conversion rate remained identical to October’s recording of 77%.
The company’s auction data continued to demonstrate a significantly older profile of commercial vehicle with average age at 72 months, a six-month increase from October. The average age of vans hit a five-year high, at six years during November – 10 months older (and with 14,073 more miles) than the year-on-year average. It’s been attributed to the increasing number of used Euro 5 vans which have entered the wholesale market, as more older vans are de-fleeted.
In terms of used van values, the biggest performance softening was seen in the £2,000-£4,999 price barriers, with some models showing a 4-6% price drop compared to October, with 12% more volume seen in this segment alone. By far the biggest performance gap also seen during November was the average van values of Euro 6 versus Euro 5 product.
Davock added: “Euro 5 vans, with an average age of 98 months and 109,094 miles, achieved an average selling price of £5,934. Meanwhile, Euro 6 vans, with an average age of 40 months and 61,939 miles, achieved an average selling price of £14,477. In total, £8,543 separated Manheim’s average Euro 6 performance during November versus Euro 5 product, which again demonstrates the two-tier market we are witnessing.”
Manheim also noted buyer feedback that November was a frustrating month, as many dealers reported a retail softening, with sales that were 15-20% softer than in October
Davock added: “Given all the highlights, November felt very different compared to 12 months ago, with less buoyancy and no glaring bounce back loan schemes. Despite the small signs of softening from our feedback, the market remains extremely positive.”
Based on the aggressive market prices being paid, Cox Automotive has predicted December performances will remain stable. However, Davock warned that buyers will become more selective as the year draws closer to an end, with many assessing the retail activity which will result in them bidding and buying accordingly.
He continued: “LCV volumes will remain constrained during Q1 (2022). For the first time in over a decade, disposal managers head into a new year with complex strategies as new vehicle delivery dates and customer extensions continue to dominate business priorities and capabilities. As a result, we expect age and mileages to continue to show significant shifts as sellers prioritise Euro 5 defleets into the wholesale market.
“These dynamics are evident in the remainder of 2021, with average age increasing by seven months and average mileage by 13,000, ahead of averages observed in the other three quarters of 2021. In October, age and mileage were the highest seen in nine years, with an average age of 67 months and 86,000 miles. Overall, we expect prices to continue to perform positively, as volume constraints, matched with a winter period, will continue to fuel both the retail sector and buyer demand during the first quarter of 2022.”
