Slower new van sales three years ago are now starting to impact the current used van market according to BCA.
With fewer vans entering the contract hire market in the second half of 2008 as the recession began to bite, there are fewer coming back to the market today on three year cycles.
The situation has been exacerbated by subsequent contract extensions, causing further delay in stock reaching the market and when it does it is older, higher mileage and often poorer condition.
Duncan Ward, BCA’s general manager, commercial vehicle sales commented “We are now reaching the three year anniversary of the onset of decline in new LCV sales, when the rolling annual figure fell from nearly 350,000 units in June 2008 to a low point of around 180,000 by the end of 2009 – a drop of over 40%.”
“What it means is that for the next 18 months to two years, there is a potential for the market to be short of 3 to 5 year old one owner used LCV stock. If demand begins to surge in line with the expected economic recovery over the same period, we could see prices rise sharply in the used market.”
Ward added “We are already seeing some signs of increased demand now the tranch of business failure vehicles from 2010 and earlier this year have washed through. Many professional buyers are moving away from their traditional age and mileage profiles, either heading upstream and competing for the even scarcer late plate vehicles or looking at the best presented part-exchange vehicles coming back to market.”
“We are effectively at the beginning of an extended supply squeeze in the used LCV market,” concluded Ward “and Ground Zero in volume terms is still some 18 months away. Buyers in the wholesale market are going to have to use every channel – physical and online – to acquire stock profitably in the months ahead.”