Manheim customers feel the pinch as strong used van selling prices continue

• Five-figure average selling prices persist
• Third-highest Manheim month performance
• Month saw the highest ever mileage return in a decade
• Buyer caution leading to reduced first-time conversion rates
• February quieter for 77% of dealers
• High van prices drive cashflow concerns and dealer caution

Strong used van prices in February led to Manheim’s third highest ever monthly performance, partly due to the continuing five-figure average selling prices. As a result, buyers continued to adopt a cautious approach following a record year for the used van marketplace in 2021.

The average selling price of a used van fell slightly in February, but robust market conditions continued – where five-figure average selling prices remained at just under January’s record £11,000 price barrier. February’s result represents a year-on-year growth of £1,203, while sold vans were three months older with 12,000 more miles on average.

Manheim February auction results

January’s return of five-figure average selling prices for a used van, previously observed between June and October 2021, continued into February. Last month, the company recorded an average selling price of £10,680, a marginal fall of £328. This represents an increase of £1,203 or 12.69% in the average price of a used van paid, compared to February 2021 when buyers were paying an average of £9,477.

The average mileage of used vans sold in February, rose to 84,541 miles, up 12,000 miles year-on-year and up 4,871 miles on the figure recorded in January. February also represented the highest ever mileage return in the past decade of auction data at Manheim.

The year-on-year average vehicle age decreased slightly to 62.1 months, while the first-time conversion rates also fell. Six out of ten vans sold first time, compared to eight out of ten in February 2021.

Matthew Davock, Director of Commercial Vehicles at Cox Automotive, said: “First-time conversion rates fell last month because buyers are treating the market with more caution. Euro 6 stock is expensive to buy, cashflow can be a concern and this is being impacted by less buoyancy in the retail sector compared to one year ago.”

More desirable, emissions-compliant Euro 6 vans, built after September 2016 continue to dominate the percentages. 62% of vans entered through Manheim lanes were Euro 6, while the remaining 38% were Euro 5 or older vans with higher return mileages.

Davock added: “In the latest issue of AutoFocus, I stated how the early stages of the year would have a different feel than the relentless pent-up buoyant market dynamics we witnessed over the past 18 months. The market started to balance out the record wholesale price levels versus the subdued retail activity, which we reported in the early stages of January.

“Although performance for certain stock remains extremely robust, we saw signs of softening in the market, especially in terms of the average price paid and the average age of used vans coming through Manheim lanes last month.”

Current van market temperature

While December and January were typically seasonal – being quieter months for the industry, February was surprisingly quieter. 77% of dealers reported a reduction of retail sales compared to January. Many reported significant year-on-year differences as the retail market remains slow and challenging.

Davock added: “I’ve previously reported Manheim’s feedback – showing that vehicle price levels of used vans and overall cash flow are the most challenging factors right now for buyers. Severe caution has set in for the first two months of 2022, after a slower November and December in 2021.

“Van dealers are evidently feeling the effects of the challenging slower market conditions and cash flow dynamics. Our January feedback showed that 52% of dealers simply won’t risk stocking too much of the same product, with many adopting the approach of buying stock based on generated leads and not buying for inventory purposes.”

Cash flow challenges resulting from the pandemic continue to put huge pressure on dealers, who are holding around 40% less stock on average than in 2019. However, they are having to spend significantly more for stock today compared to 2019.

Another factor hindering retail conditions and cash flow challenges, is the high price of vans which are dominating retail adverts in the UK. Today, only 10% of stock listed is priced under £10,000 and 71% of stock listed is over £15,000.

Davock concluded: “In my March predictions, I’m hoping for a better month for buyers and dealers alike. That said, I’m expecting a very similar market feel where we will see the average mileages and average age of used vans continue to dominate the overall headlines as the year progresses.”