LCV operators need to ensure vehicles are well presented and accurately valued prior to defleeting to ensure optimum prices in a changing market.
BCA has warned that the dynamics that drove demand during the pandemic are “well and truly behind us now” – and called for sellers to return to the basics of good remarketing practice.
Latest figures from the remarketing specialist show average values averaged £8,037 in December, down 14.9% or £1,405 from December 2022 and marking the lowest monthly figure recorded since the UK was in lockdown in 2020.
Several factors contributed to the decline in average values in 2023, which peaked at £10,325 in April of last year. Alongside the well-publicised economic issues of high inflation and rising interest rates affecting consumer confidence, the market was affected by the changing mix of stock and rising numbers of lower-grade vehicles washing out from extended contracts during the pandemic.
The recovery of the new van market – up by 22% year-on-year in 2023 – offered more choice to van buyers and took further pressure off the used sector.
BCA said any vehicles requiring significant work to get into retail condition needed to be very realistically valued to attract the buyers’ attention. Demand for the very best condition light commercial vehicles continues to significantly outstrip interest in the more poorly presented vehicles.
But it also noted that some customers actively took advantage of significantly lower prices in December to refresh their forecourts and many have been realigning their existing stock frequently.
Stuart Pearson, BCA COO UK, commented: “As last year drew to a close, we continued to see the effects of a two-tier market, where well-presented, higher-grade vehicles attract a lot of interest, while older, higher-mileage volume models need to be competitively valued, particularly if they require repair and refurbishment.”
Pearson added: “Proper preparation and good presentation are critical to achieving the best possible prices for used LCVs along with the correct documentation to support the vehicle provenance.
“Similarly to the car market, there was an extensive period where decision-making was generally easy and price expectations were often overachieved, however those that are paying close attention to the true condition of their vehicles and setting realistic reserves are achieving the best results currently.”
BCA data for 2024 so far shows the LCV wholesale market has got off to a steady start, with interest continuing to be highly sensitive to price and condition.
“These dynamics are not unusual for this time of year and should not be a cause for concern, as there is every expectation that conditions will improve and that 2024 is likely to see a return to more seasonal trends in the wholesale LCV market,” Pearson elaborated.
“With a fairly plentiful supply of new LCVs entering the market and an ageing fleet driving many contract hire returns, I’m sure that this won’t be the last time that we mention that the best results will always be obtained by following the remarketing basics.”
