This stability is being driven by a delicate balance of supply and demand in the used LCV market; with a rise in supply levels being met with strong demand for high quality used LCVs. Shoreham revealed that an influx of stock from utility companies, who are retaining vehicles for longer periods, is entering the market, giving buyers more choice of vehicles over two-years-old, in good condition and at more competitive prices.
This has turned buyer focus away from the newest used LCVs – despite rising year-on-year volumes – and towards older units, leading to decreasing prices of units under two-years-old. Prices of used LCVs over four-years-old have, by comparison, remained incredibly stable.
Average prices in June of used LCVs between four and six-years-old have remained within £20 of January figures, while the difference in prices of the eldest units was just £35 between January and June.
Average prices reached their long-predicted ceiling in 2015, peaking in January at £4,783. In June, Shoreham found that average prices remained within £106 of the figures at start of the year, with a June average of £4,677. Year-on-year prices fluctuated a maximum of 3.3% in the first six months of 2015, compared to 2014, with May the only anomaly, where there was a spike of 6.6% compared to May 2014.
Decreasing overall mileage of all used LCVs throughout the first six months of the year has led to increased demand for vehicles over two-years-old, helping to keep average prices at their ceiling, while ensuring that overall volumes have continued to rise.
Volumes increased 17% year-on-year in June, with substantial rises in the mid-market helping to push volumes upwards, as buyers become increasingly confident in used LCVs in these sectors. January aside, year-on-year volumes have increased substantially throughout the year. This has been largely due to rising volumes of mid-market LCVs.
“This long-awaited stability in the used LCV market is encouraging for SMEs, who are able to confidently invest in older, used vehicles, despite their average age increasing,” commented Alex Wright, managing director of Shoreham Vehicle Auctions.
“At this stage, we predict that prices will remain stable, creating a strong and prosperous market. However, with only 69% of vehicles over six-years-old being sold first time in June – compared to 76% in January – buyers remain selective. Vendors should remember that buyers are looking to source the right stock in good condition, at the right price,” he added.