Trade buyers forced to travel as high quality LCVs supply slows and internet sales grow
Dwindling volumes of retail quality light commercial vehicles mean trade buyers are having to travel further to maintain adequate stock levels.
According to the November edition of CAP Red Book, the benchmark guide to used van trade values, the much anticipated reduction in supply is now beginning to bite in earnest.
With average trade values slightly increased on October, it is a reversal of the picture a year ago when values were significantly weaker.
Red Book Light Commercial Vehicle editor, Ken Brown, identifies the rise of internet bidding as instrumental in the current market dynamic.
He said: “In our auction research, as well as a clearly diminishing number of sale entries, we have been noticing the same buyers at sales which are often hundreds of miles apart. Trade buyers are seemingly being forced to trawl the length and breadth of the country in search of the elusive clean low mileage vehicles.
“If that wasn’t enough to contend with, they are often finding themselves bidding against an ever-increasing army of ‘cherry-picking’ internet bidders who are willing to pay considerably more for vehicles since they are not incurring the cost of physically attending auction sales.
“In many cases auction attendees are going home empty handed, or at least with fewer vehicles than they had intended to buy.
“As the much anticipated stock shortage, stemming from low registrations 3 years ago, takes hold we can expect to see more of the same. It may well mark the coming of age of internet auction sales. Recent information shared with us confirms the dramatic rise in internet sales over the past twelve months.”
Brown also believes that buyers in the current market are less concerned with vehicle condition than the quantity of vehicles available.
He said: “Last month we independently assessed the condition of a large number of entries only to find no discernable relationship between price and condition when they were sold. In many cases body panel damage was being totally ignored, which is a further indication of the market’s response to the current stock shortages. All of this is good news for vendors who can expect values to continue rising.
“Looking ahead, we expect that values across most LCV sectors will continue to strengthen as the market increasingly feels the effects of the inevitable stock shortages stemming from the fall in registrations 3 years ago.
“In addition we expect to see the usual seasonal effects, with demand for 4x4s, boxes and lutons increasing in the run up to Christmas and the opposite for tippers and dropsides. Whilst there is continued talk of a further downturn in the economy it is worth remembering that the used light commercial vehicle market has shown its resilience throughout and often it is the service industries, which rely so heavily on vans, that lead the way to economic recovery.”
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