Falling age profiles and strong demand helped keep used van prices at a record high in September, according to auction specialist BCA.

The average value of a used LCV sold at BCA rose to £6,140 in September, 9.5% higher than at the same point last year. Of course, this increase has been offset to some extent by falling age and mileage:

Source: BCA

I had expected that rising new van sales would dampen growth in the used market more quickly than it has done. But it looks like I didn’t make sufficient allowance for the improved quality and value of used models that’s resulted from the recovery in the new van market.

Here’s how used LCV prices have changed at BCA over the last year:

BCA LCV sales Aug 15 – Sept 16 (source: BCA)

A shortage of cheap vans?

Within these top level figures are three sectors, fleet/lease, part-exchange and nearly new. The largest and most important of these is the fleet/lease sector, where average age and mileage have fallen over the last year as prices have risen:

Source: BCA

The falling average age suggests to me that fleet operators are moving back towards a three-year replacement cycle, perhaps in line with the warranty provisions on many van models.

Interestingly, the average value of part-exchange vans has risen slightly this year, despite an increase in average age and mileage:

Source: BCA

These figures suggest to me that buyers at the bottom end of the market are finding it harder to meet demand for more affordable models.

Will Xmas parcel deliveries support the market?

Duncan Ward is BCA’s Head of Commercial Vehicles. He makes the point that strong growth in a number of economic sectors has helped drive strong demand for used vans over the last year:

“The LCV market has seen continued value growth throughout much of 2016. There has been steady demand for vehicles to service online shopping delivery, the construction and civil engineering industries and the small business and entrepreneurial start-up sector. BCA continues to experience plenty of demand for tippers and dropsides, Lutons and larger panel vans, the latter often going back to work to service the online shopping sector.”

Despite this healthy picture, Ward warned that “volumes are rising” and said that buyers will have “more choice in the weeks ahead”. This could put pressure on values.

However, the used van market saw a surge of demand late last year as couriers hunted down additional vans to meet record demand for Christmas delivery work. I wouldn’t be surprised if such demand helps support the used market again this year.

Used van prices at BCA set a new record in August, rising over £6,000 for the first time to £6,089. That’s 2.6% (£158) more than in July, and 10.5% (£582) more than in August 2015.

Of course, vehicle mix and average age will have affected this high price. Vans sold last month were on average two months younger and had 5,000 fewer miles on the clock than in August 2015:

Data courtesy of BCA

BCA’s Head of Commercial Vehicles, Duncan Ward, commented:

“The LCV market in August was particularly strong at BCA considering the holiday season was still in full swing. Conversion rates improved and demand was significantly stronger than we had seen in July.”

August’s rise was the result of a sharp rise in values for vans sold as part-exchange vehicles. The average price of a part-ex van rose by £282 to more than £4,000 in August.

In contrast the average value of ex-fleet and lease vans rose by just £1 in August. These 3-4 year old vehicles form a large part of the used van market and are perhaps the most liquid and consistent indicator of market conditions.

Condition remained as important as ever in terms of securing a decent price, but Duncan Ward also commented that with wholesale volumes rising, “there is no room for complacency” — despite recent price rises.

I’d take this to mean that Mr Ward believes prices are unlikely to rise further and could fall — but we’ll know more when September’s sales figures go through.