Used van price bubble could burst by Christmas

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Soaring used van values have added nearly 50% to the trade price of a typical three-year-old van since 2010, but the boom in values is likely to falter by the end of the year, according to experts.

Vehicle information specialist CAP Automotive says the rise in values for used vans was sparked by the collapse in new van sales when Britain fell into recession.

This led to a dramatic reduction in the number of used vans available in the market and as economic recovery began to gather pace, demand quickly outstripped supply.

Since September 2010 the CAP Red Book independent benchmark value of a three-year-old short wheelbase Ford Transit, with 60,000 miles, has rocketed from £4,800 to £7,100 - an increase of 48%.

CAP's commercial vehicle forecast values expert, Tim Cattlin, said: "Nobody in the industry, including ourselves, anticipated the rate at which demand has increased.

"Economic recovery has therefore unleashed serious pent-up demand into the auction halls and on to the trader's pitch."

Now Cattlin believes the recovery of new van registrations in 2011 spells an impending end to the rise in van values as early as the end of 2014.

A growing number of these vehicles will begin to return to the used market and help to rebalance supply and demand.

Cattlin added: "We believe the market for used light commercial vehicles will remain buoyant for the next few months but values will begin to ease later in the year.

"Quite how pronounced this softening will be, remains to be seen, but a pivotal point may well be the typically quiet period over Christmas. We will therefore be watching particularly carefully to see if the normally strong recovery in January is as pronounced as usual."

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