The market for used vans continues to flourish in September, providing a positive snapshot on the UK economy.
Demand for used vans continues to exceed supply and values are up on last year and on track to achieve record prices for the rest of 2020 and into 2021, according to members of the National Association of Motor Auctions (NAMA).
And figures from CAP HPI show that values have increased on average by over 10.5% over the last three months, with no early signs of this performance abating – leaving senior CV editor Steve Botfield branding the market for LCVs as “astounding” and saying vehicle prices were “exceptional”.
Manheim is one of the auction firms that’s seen exceptional sales of late, including a record-breaking LCV sales performance in August, bucking the traditional seasonal slowdown and setting an all-time average selling price record.
The firm reported that August 2020’s used van values were 28% higher year-on-year, up from £5,680 to £8,158; and the growth is not purely due to a lack of wholesale supply as the volumes of vans in auction are only tracking 7% behind August 2019. First-time conversion rates were also strong, standing at 87% and up 13% compared to the same period last year.
Demand for Euro 5 and pre-Euro 5 vans at Manheim has been particularly strong, with average selling price in August 41% higher than pre-lockdown. Considering age and mileage pre- and post-lockdown, average age in August was only four months younger with 5,000 fewer miles. 58% of vans sold in August were Euro 5 or older and Euro 6 vehicles also enjoyed a rally in price with values in August being 15% higher than pre-lockdown.
Matthew Davock, Manheim’s director of CV, said: “We may be approaching the ceiling of used wholesale values. Due to extended lead times and supply chain pressures, I believe that the next 12 months will continue to be a robust record-breaking period for LCV market activity in the used sector.”
Manheim added that the used van sector growth has partly been driven by difficulties in sourcing new vans due to the impact of Covid-19 on supply chains. The latest SMMT forecast sees 2020’s LCV registrations down 36.4% over 2019 with 269,000 vans, bouncing back in 2021 to 318,000 new vans.
James Davis, customer insight director, Cox Automotive, said there were reported bottlenecks in manufacturing, vehicle preparation, bodybuilding and logistics and pointed to forthcoming issues with the used van volume pipeline, likely to also keep volumes at a high.
However, the growth in the used van sector has also largely been fuelled by an increase in trades people returning to work as well as the rise in online shopping.
Louise Wallis, head of NAMA, said: “The auction market remains buoyant and continues to grow despite times of economic uncertainty. Demand for LCVs has been extremely strong for the industry as online sales have been established as a crucial component towards the market’s growth.
“The shift in consumer shopping activity from physical to online retail and the subsequent increase in deliveries has been supporting demand for used vans.
“Going forward, we expect the auction market to remain at high levels especially if online sales continue to perform well.”