ULEZ expansions fuels 'record-breaking' month for LCV average selling prices

Matthew Davock, Manheim’s director of CV

August marked the third consecutive month where Manheim recorded a five-figure average selling price of a used van, driven by the expansion of London’s Ultra-Low Emissions Zone (ULEZ), according to Cox Automotive.

The company recorded a ‘record-breaking’ average selling price of £10,554, after the previous record set in June at £10,222.

The August record was 3.7% higher and £375 more than July’s five-figure average at £10,179.

The average selling price represents a year-on-year (YoY) growth of 37% and a pre-pandemic growth of 63%.

Matthew Davock, director of commercial vehicles at Cox Automotive, said: “We expected August to start slowly, as we reported this period had already begun in July.

“However, in the last 10 days, we saw a noticeable uplift in buyers returning from holiday and a strong appetite shown to buy stock.

“Our expectations were certainly exceeded when we saw the YoY and staggering pre-pandemic growth figures in black and white.”

The average mileage of used vans increased by 105 miles, to 73,515 miles. Only the average age of used vans remained identical to July’s results, at 61 months.

The company is warning that LCV supply will be the lowest the wholesale market has seen for more than a decade, with contracts for fleet and rental volumes extended from September 2021 to Q2 2022, as replacement vehicle shortages continue, it said.

Buyer numbers improved in August compared to July, with 667 individual buyers purchasing vans at Manheim auction sale events, representing a growth of 1.8% compared to the attendances recorded in the previous month.

The August first-time conversion remained in line with July, as seven out of 10 sold the first time, tracking above the seasonal LCV norm.

Davock added: “Demand growth for Euro-6 compliant awareness, together with the ever-increasing challenges of new supply availability – continues to fuel performances of wholesale vehicles.

“During August, we saw used Euro-6 van average selling prices increase by a further 2.2% compared with July, to a record-breaking £13,722.

“These vans typically had an average age of 39 months and average mileage of 56,273 miles.”

Euro-5 and older stock prices continue to also show strength, with Manheim selling its August vans with an average selling price of £6,076, together with an average age of 92 months, and an average mileage of 98,024 miles.

He said: “The price desirability in this segment of the market remains key in this area, as Euro-5 vans are on average, approximately £4,500-£6,000 cheaper to purchase than an equivalent Euro-6 van today.

“Studying today’s retail advertisements, a staggering 68% of stock advertised is £15,000 or more, and only 16% of the retail price market is under £10,000.

It’s incredible how the van price dynamics have changed as approximately 72% of the stock advised before the pandemic would have been in the £3,000-£12000 price bands.”

SMMT's new van results

Despite issues surrounding new vehicle production, including the semiconductor shortages, record demand for vans continues in the new market.

Figures by the Society of Motor Manufacturers and Traders (SMMT) shows 20,582 registrations for new vehicles, up 2.6% year-to-date on pre-pandemic average and up 21.1% compared to the pre-pandemic five-year average.

Davock said: “Despite the record registrations in what historically should be the market’s second quietest month of the year, these results demonstrate the changing marketplace we are all operating in today.

“The fact that these vehicles were registered a month before the traditional new September plate change proves what huge demand and urgency is needed in the UK market at present

“Based on current van production challenges, I would also suggest these units would have been ordered back in Q4 2020 or Q1 2021, and I sense September registrations will be a true measure on the current challenges we see dominating the headlines today and for the next six months.”

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