If you’ve been following the story of used van prices at auction over the last few months, it will come as no surprise to you that BCA’s average auction values for vans rose in December, resuming the upward path they have been on since August, barring a minor blip in November.
However, there was at least some logic to the increase in December — average age and mileage fell over the month to 55.9 months and 78,700 miles respectively , thanks to a higher proportion of good quality fleet and lease stock than usual.
Prices rising ahead of inflation
If you look at the bigger picture — always a good idea — then the news isn’t so good. A shortage of good quality supply (caused by a long-term slowdown in new registrations) means that used van prices are rising far ahead of inflation.
According to the latest figures from BCA, December 2012 was ahead of December 2011 by £461 or 10.7%, with age virtually static and mileage rising over the period. That’s 10.7% inflation for a van with more miles on it.
Year-on-year table: All vans
|All vans||Avg Age||Avg Mileage||Avg Value||Sale vs CAP|
Duncan Ward BCA’s General Manager – Commercial Vehicles commented:
“The stock shortage is a long term issue and is unlikely to change until new van volumes pick up significantly and the economy improves enough to generate a bigger churn of vehicles in the marketplace.”
“Overall, 2012 saw steady value growth in the used LCV market, with average values ahead of those seen in 2011. Buyer confidence is fairly fragile and there is a lot of buying to order, but competition for the best quality vans is driving values up. Currently there appears to be little on the horizon that is going to change those market conditions, but with the continuing economic pressures and reduced business confidence it remains to be seen if we see the same robust value growth in 2013 that was experienced in 2012.”
The problem is that even if new van registrations rise — which doesn’t seem likely — this increased supply will take several years to feed through to the secondary market, during which time supply pressures will continue to keep used values high.
Still, it’s good news for large van hire companies and other operators who do renew their fleets regularly — rising used values means that the total cost of ownership falls.