Pent-up demand for used vans reduced stock levels to a point where prices rose by between 30-40% in June, reports Shoreham Vehicle Auctions (SVA).
Hosting its first auction where 30 invite-only buyers joined SVA’s online buyer audience, dealers saw market prices rise again with some stock making £1-2,000 more than it did seven days previously.
SVA managing director Alex Wright (pictured) says he hasn’t experienced a market like it in 30 years of working in the sector, but dealers have accepted they are all in the same boat and must bid and buy in the current market or face their pitches being empty.
“When you see a three-year old Ford Transit with 50,000 miles on the clock booking at £9,100 and selling for £13,500 you know we are in a market that is extra ordinary, he said.
“Some dealers were buying vans wholesale on a Tuesday for more money than they sold vans to a customer for on the Monday.
He continued: “Having the physical buyers all in the auction, with a chance to discuss the market with other buyers, albeit it at a 2-metre distance, gave them the confidence that they are all in the same position.
“They have experienced the market’s pent up demand for themselves, and accepted that if they need stock, they will have to pay the higher prices. It’s a classic demand exceeds supply market situation and vendors are in the box seat.”
There are a number of reasons for the crippling used van shortage, says SVA.
Fleets that planned to defleet vehicles during lockdown or in the summer months have delayed this because of replacement new vehicle delays.
Some fleets meanwhile have decided to extend contracts until they know more about what is happening with the economy, while SVA has even see fleets claw back used vans destined for auction to put them back to work until replacement new vehicles arrive.
“Dealers are in a difficult position,” said Wright. “They want to make sure they sell stock this expensive stock quickly as they don’t want the risk of vehicles being worth a few thousand pounds less if the market drops.
“Some are running their businesses on a daily basis, but currently there is no sign the market situation is going to change anytime soon. We are all involved in a new passage in the used LCV market’s history.”
The used vehicle market was severely disrupted during the lockdown with only online sales taking place, but it is continuing to show signs of recovery. Used car sales, for example, were up by 3.4% in the first 10 days of June compared with the same period in 2019, data from Indicata suggests.
Looking at the seven days between the June 4-10, the used car sales picture looks even brighter with sales growth of 13.3%. That equates to around 12,000 used cars per day which is where the market was pre-lockdown.