Manheim's latest analysis of the used van market in June 2014 reveals some surprising facts about the underlying condition of the industry.
Despite seeing a year-on-year growth in overall values of 5% (from £4,335 to £4,557), the changing age and mileage profile of vans is having a significant impact on average values.
Closer analysis of vans sold at auction in June compared to May highlights a clear trend: the proportion of older (four to five year old) vans entering the used marketplace has increased dramatically.
In fact, the Manheim figures confirm that the popular car derived van segment, which accounts for over 30% of all vans sold in June, saw the biggest swing; selling 22% more four to five year old vans than the previous month. In the case of small panel vans this June volume increase was 11%. For large panel over 3 tonnes, it was 15% increase in older model compared to May.
Matthew Davock, head of light commercial vehicles at Manheim, said: "In June this year, 34% of all car derived vans, 23% of all small panels vans and 29% of all large panel vans at auction were aged between four and five years. We've seen corresponding marked contractions in the number of sub three and plus five year old vans sold.
"We have never seen a monthly shift of this magnitude, and this age realignment is a combination of two factors. Firstly, as witnessed every year at this time, there is a shortage of used daily rental vans due to the completion of these fleets' renewals in the first half of the year. The second factor, as predicted recently by Manheim, has been the reduction in volumes of significantly older, extended vans over five years of age. In this category some segments were recording an average age of nearly eight years."
Manheim argues that the relatively minor dip in used van prices, which fell from £4,741 in May to £4,557 in June 2014, is linked to this changing age mix and not seasonal demand or the World Cup effect.
James Davis, head of commercial vehicles at Manheim, said: "While we have to remember that year-on-year the average sales prices are still growing, it's a trend that pre-dates the recession; recent analysis by Manheim reveals average van values have increased by 45%, or £1500, since 2006. This used van inflation is against a backdrop of significantly extended replacement cycles. Today's operators are being rewarded with improved reliability and higher net returns.
"The question I get asked the most is 'how long can used van inflation last?' The only destabilising market factor will be a significant increase in supply over an extended period; yet there are few signs that de-fleet volumes will track this way over the next 12 to 18 months. I believe we'll see a steady increase in new and used volumes due to economic growth."