{"id":6997,"date":"2015-01-15T16:46:23","date_gmt":"2015-01-15T16:46:23","guid":{"rendered":"http:\/\/www.vanrental.co.uk\/vanblog\/?p=6997"},"modified":"2015-01-15T16:46:23","modified_gmt":"2015-01-15T16:46:23","slug":"used-van-market-wont-normalise-until-2020-says-manheim","status":"publish","type":"post","link":"https:\/\/www.vanrental.co.uk\/vanblog\/archives\/6997","title":{"rendered":"Used van market won’t normalise until 2020, says Manheim"},"content":{"rendered":"

Never mind\u00a0my predictions that used van prices might start to stagnate and perhaps even soften in 2015<\/a>, James Davis, head of commercial vehicles at Manheim, believes that the used van market will not return to “pre-recessionary normality”<\/em> until 2020.<\/p>\n

Things certainly aren’t\u00a0completely normal now: average used van selling prices last year were 45% (\u00a31,500) higher than they were in 2006, despite the vans being older and having higher mileages.<\/p>\n

The logic behind Mr Davis’ thinking is simple enough: new van sales have now returned to pre-recessionary levels of more than 300,000 units per year, but most of these new vans won’t be de-fleeted by their corporate, lease and utility owners\u00a0until 2019\/20. At this point, the age and mileage profile of vans entering the used market will be the same as it was in 2006, before the financial crisis reared its head.<\/p>\n

However,\u00a0I reckon there are some factors that could enable the market to find\u00a0a new balance\u00a0a little sooner than 2020.<\/p>\n

\"Average<\/a>

Average used van age, selling price and mileage at Manheim sales, Dec ’13 – ’14. (Click to enlarge)<\/p><\/div>\n

1. The\u00a0UK CV market won’t be the same in 2020 as it was in 2006, and the age and mileage profile of used van stock may not be either. Mr Davis alluded to this in his comments today, noting that daily rental and flexirent fleets have recently injected a welcome does of\u00a0late model vans into the market.<\/p>\n

Flexible\u00a0long-term rental is increasingly popular in the UK van market,\u00a0and part of the attraction is that you are guaranteed to always have a nearly-new vehicle without having to commit to finance or long-term ownership. The rising popularity of this type of offering\u00a0could\u00a0mean that a proportion of\u00a0last year’s new vans will be returned to the secondary market much sooner than historical trends\u00a0suggest.<\/p>\n

2. On a similar note, fleet operators are heavily focused on minimising the total cost of ownership of their vehicles. This means maximising resale values — if above-average prices remain available in the secondary market, some fleet operators may choose to de-fleet vans slightly earlier than they have done historically. Again, this could help to\u00a0bring the market back into balance sooner than expected.<\/p>\n

3.\u00a0If the UK economy does continue to recover,\u00a0a greater proportion of van buyers will want — and be able to afford — new vans.\u00a0After all, new car sales are now ahead of levels seen before the recession. Van sales might also continue to rise, depressing demand for used vans. This may even\u00a0be happening already.<\/p>\n

Although\u00a0used van prices rose by 5.5% in December 2014, compared to December 2013, Manheim’s used van prices are below the all-time peak seen in October 2014. December’s average of \u00a34,715 is in-line with the average seen over the last six months.<\/p>\n

The age and mileage profile of used vans is also improving —\u00a0average age at Manheim in December was 62 months, down from 63 months in December 2013. Similarly, average mileage was down\u00a0by 4,000 from 84,275 in December 2013 to 80,217 last month.<\/p>\n

This suggest to me that buyers aren’t reliably paying more for older vans, as they were doing a year or so ago.<\/p>\n

4. There’s also another possibility: suppose the UK’s economic recovery proves short-lived and demand for new vans falls again.\u00a0That\u00a0could boost used van demand beyond even Mr Davis’ wildest expectations. I don’t expect this to happen, but it’s certainly not impossible.<\/p>\n

As always, we’ll just have to wait and see.<\/p>\n","protected":false},"excerpt":{"rendered":"

James Davis, head of CV at Manheim, believes the used van market won’t return to normality until 2020. I explain why what happens may not conform to previous patterns and may not be this predictable.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[1885,13],"_links":{"self":[{"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/posts\/6997"}],"collection":[{"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/comments?post=6997"}],"version-history":[{"count":4,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/posts\/6997\/revisions"}],"predecessor-version":[{"id":7002,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/posts\/6997\/revisions\/7002"}],"wp:attachment":[{"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/media?parent=6997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/categories?post=6997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vanrental.co.uk\/vanblog\/wp-json\/wp\/v2\/tags?post=6997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}