Despite the sustained increase in new van registrations seen over the last year, the average age of used vans hitting the UK’s auction rooms keeps on rising, according to leading auction firm Manheim.
According to the firm, the average price of a used van fell by a whopping 13% to £4,090 in April, compared to April 2014.
However, it may not be quite that simple: the average age of these used vans is rising, too, making it rather more difficult to understand how much of the fall in prices is due to age, and how much to market conditions.
What’s more, the level of change is different in the three main sectors of the van market.
Although the average mileage seen on car-derived vans was broadly flat on the same period last year, at around 71,000 miles, average age increased significantly, rising by five months.
Almost half (49%) of car-derived vans sold in April 2015 had an average age of 101 months (8.5 years).
Small panel vans
As with the smaller car-derived vans, the average age of small panel vans has remained broadly flat over the last year, and currently averages 82,650.
However, the average age of small panel vans has risen by 10 months over the last year, and reached 78 months (6.5 years) in April.
Large panel vans (>3.0 tonnes)
Year on year, the average age of large panels vans increased by just six months, while April saw this figure rise by four months to 65 months.
Interestingly, 36% of this segment sold in the month had an average age of 125 months (10 and a half years). This equates to a ’54’ reg licence plate, suggesting that firms are finding that these big vans will happily run to much higher ages than smaller vans and cars.
James Davis, Manheim’s head of commercial vehicles, says that the surge in supply seen earlier this year has now washed through the system and van prices could rally into the summer:
“I predict de-fleet volumes will now fall as we approach the summer. According to supply and demand used prices are likely to rally; towards January levels but no higher. Care needs to be taken with sub two year old product as the guides see relatively small volumes.
“Incentives on new vans will drive demand and values in this age bracket. Despite auction volumes of this age profile being relatively small, an average of just over 5% in many segments, the price differential of used versus new must be significant enough to make it a compelling retail proposition.”
I thought the second part of Mr Davis’ comment was particularly interesting, as it highlights the effect of promotional pricing by van manufacturers on used prices: manufacturers can drive used prices down by discounting their new vans. Used vans must be cheap enough for the discount to outweigh the disadvantages of buying used.
I’m not convinced that we’ve seen the bottom of the shake-out in the used van market: with used prices and demand having risen almost continuously for several years, I suspect it will take at least a few more months for the market to reach a new balance.