BCA van auction (courtesy of BCA)

Used van prices rose by an average of £100, or 1.8%, in September, according to auctioneer BCA, compared to August.

However, compared to September last year — a more usual comparison — the average sale price only rose by £47 to £5,607. That’s despite a 5,000 mile drop in average mileage, and a slight reduction in average age.

Perhaps more significant is that the average percentage of CAP (book) price achieved has fallen from 103.9% in September 2014 to 99.8% in September 2015. In my view this suggests prices are reverting to more normal levels, relative to age, condition and book.

This is a view shared by Duncan Ward, BCA’s LCV Operations Director:

“We are now seeing the return of more typical market conditions with balanced supply and demand and elements of seasonality taking effect. The market was strong in September with average values increasing across the board and good levels of demand from buyers for well presented, good quality commercial vehicles.”

Ex-fleet/lease prices falling

Ex-fleet/lease vans are usually under four years old, in good condition and with one large corporate or public sector owner from new.

As such, they are desirable second-hand buys and a realistic alternative to a new van for many van operators. This also makes them a good barometer of used van market conditions, in my view.

The average price for an ex-fleet/lease van fell from £6,550 last September to £6,416 last month, despite average age and mileage remaining broadly unchanged.

What did change was the average sale price relative to benchmark valuations. The average sale price versus CAP fell from 103.5% last September to a more normal 99.3% last month. Similarly, the average sale price versus the manufacturer’s recommended price (MRP) fell from 36.3% in September 2014 to 34.0% last month.

A simple picture

I’m not suggesting that used van prices are falling off a cliff. They aren’t.

But the trend over the last year is clearly one of stagnation and modest decline, especially in the high-volume fleet/lease sector:

BCA used LCV prices 09-2014-15 (courtesy of BCA)

The fact that used prices are remaining relatively firm in the face of a surge in new van registrations makes it clear that demand for used vans remains strong.

I may have overstated the downside case in previous posts, but I suspect the trend visible above may have a little further to run yet, before bottoming out.

Used van values fell for the second month running in August, according to auctioneers BCA. The firm said that rising volumes of used stock hitting the market pushed down the average sale price marginally, from £5,544 in July to £5,507 in August.

What’s interesting to me here is not so much the price change, which is probably insignificant, but confirmation that the recovery in the new van market is generating a flood of used vans and dampening down seconday market conditions.

Here’s how the figures looked compared to this point last year (not July):

(Data courtesy of BCA)

The year-on-year picture is more telling and suggests the used market may be returning to normality. Both average age and mileage are down, but so is the average value. Around a year ago we were seeing the opposite — used prices were rising despite rising age and mileage.

Commenting on the figures, BCA’s Head of Commercial Vehicles, Duncan Ward, said:

“We commented earlier this year that values were likely to come under pressure over the summer months, as a result of rising volumes, an increase in poor condition vehicles and the strong new van market.”

“With the benefit of hindsight we can also now see how the shortage of retail quality stock, combined with the rising demand for LCVs as the economy improved, pushed average prices up over an extended period. Average values climbed steadily throughout 2012, 2013 and 2014, with month-on-month and year-on-year growth becoming the norm.”

“Of course, that was never going to be sustainable indefinitely, and we are now seeing the return of more typical market conditions with balanced supply and demand and elements of seasonality taking effect. The good news is that the market has maintained relatively strong average values across the board and there is plenty of interest from buyers for well presented, good quality commercial vehicles.”

In other words, trees don’t grow to reach the sky, and the used van maret is now coming back to earth, albeit fairly gently. Good news all round, I think.