Used van values remained largely flat in July, compared to June, according to the latest figures from auction specialists BCA.

BCA’s July sales figures show that the average light commercial vehicle sold for £4,772 in July, just £6 more than in June. Average age remained largely unchanged at 58 months but, average mileage rose for the third consecutive month.

Despite monthly falls over the last three months, used van values remain 12.8% (£543) higher than they were in July 2012, and vans are selling at an average of 101.3% of their CAP values — up from 99.6% during July last year.

Looking beneath the headline figure, BCA says that fleet and lease values fell, but dealer part-exchange values rose strongly, to the third-highest monthly average value on record.

Commenting on the figures, Duncan Ward BCA’s General Manager – Commercial Vehicles, said:

“The summer holiday period is typically a weaker time for demand but values have been maintained at a similar level to last month largely as a result of the low levels of supply.  Trade buyers are continuing to focus on the very best retail vehicles which are routinely making exceptional money, while vans in poor condition may struggle for attention. ”

Average LCV values from June 2011 – July 2013 (courtesy of BCA)

As the graph above shows, the trend in used van values has been relentlessly upwards over the last two years, but Duncan Ward believes this could moderate come September, thanks to an influx of realistically-priced dealer part-exchange vehicles:

“Sellers should consider adjusting valuations now on poorer condition vans with a view to remarketing them before volumes begin to rise and buyers have more choice from mid-September onwards.”

“Vans entered from dealer part-exchange sources have outperformed the market in recent weeks, and values rose sharply during July.   Dealers are valuing their part-exchange vans realistically to tempt buyers in and have reaped the rewards of rising average values, a CAP percentage that is ahead of the wider market performance and good sale conversions as a result.”

The dramatic and long-lasting fall in new van registrations since 2007 has helped support used van values, as the supply of decent quality, one-owner vans has fallen steadily as operators have held onto their vans for much longer than previously, or reduced their overall requirements.

New van registrations have recently started to turn up, and this seems to be being reflected in both UK CV manufacturing output, which has risen recently, and in used van values, which have started to weaken after reaching record highs.

After hitting record levels in April, average used van values at auction dropped back slightly last month, according to the latest figures from auction specialists BCA.

The average May figure of £4,870 for all LCVs represented a fall of £128 (2.5%) compared to April.

Average age fell back to just under 58 months, although average mileage increased slightly during May.

Both fleet & lease and dealer part-exchange sectors saw values decline from the previous high points recorded in April.

BCA Used LCV Values May 2009-2013 (courtesy of BCA)

On a year-on-year basis, values remained high and were 11.4% higher than in May 2012, despite the average age and mileage of the vans being sold having risen over the last year:

Data courtesy of BCA

BCA’s Duncan Ward commented:

“Although values declined by around 2.5% across the board, demand remains strong across the range of used light commercials at BCA.   Even so, buyers are sensitive to mileage and condition, and excessive mileage or damage will significantly impact the price performance.  The best prices are paid for vans in good colours with a high specification and any rare or unusual vehicles will generate the most attention.”

Ward acknowledged that “after many months of strong value growth”, there is some uncertainty about where the market is heading over the remainder of this year. Although low volumes of high quality used stock have helped to inflate underlying prices, this trend cannot continue for ever, especially given the continually rising average mileage and age of the U.K.’s used van stock.

Discussing the results, Ward says that sellers will have some influence over future price movements and may need to revise their strategies:

“With the first decline in average values seen this year, now would be a good time for volume sellers to review their selling strategies and make sure they are fully in tune with market sentiment.  Vans should be sensibly valued to sell and corporate sellers should offer LCVs with full documentation and service histories and ensure they are presented in the best possible condition following pre-sale preparation.  Sellers also need to manage the supply of similar makes and models, because it can have a direct impact on price performance – even for attractive retail-quality vans.”

Van hire companies and other large fleets often de-fleet dozens or even hundred of identical vans at the same time, so it’s easy to see how this can cause a ‘feast and famine’ situation.

With UK GDP growth continuing to hover just above zero, it will be interesting to see how the remainder of the year pans out for the used van market.