Used van market still performing strongly despite economic factors

• Four-figure average selling prices return
• 'Pandemic-worn’ vans reach record average age
• Used market conditions slightly improve despite tougher economic factors
• Manheim sells vans faster for its vendors during April
• New van sales statistics continue to disappoint

Despite the average mileage and the average age of ‘pandemic worn’ vans increasing, April saw the used market and overall demand showing some positive signs of stability and overall improvement. In fact, the market is performing healthily even with challenging economic factors, such as the cost-of-living factors, rising inflation and concerns around interest rates.
 
In this month’s commercial vehicle (CV) market tracker, Matthew Davock, Director of Commercial Vehicles at Cox Automotive, discusses the improvements Manheim witnessed in the fourth month of the year, where vendors’ vans sold faster and both days to sell and first-time conversion rates improved.

Manheim April auction results

Price easing has continued throughout this year, with the expected four-figure average selling prices for a used van returning for the first time in 2022. Previously, Manheim witnessed five-figure average selling prices between June and October 2021, and again from January to March 2022. Last month’s results saw Manheim record an average selling price of £9,272, a marginal fall of £889.
 
Davock said: “Following rising prices for older, higher mileage vans throughout the course of 2021, it was obvious that softening would continue for two reasons. Buyers are currently focusing on condition quality stock, so condition versus preparation speed is very much at the forefront of buyers’ minds. Secondly, the current issues around parts supply, along with time delays on paint and mechanical repairs, are making it very difficult for buyers to get vans to a retail standard in manageable and practical timeframes.
 
“Given the increased volume of ‘pandemic-worn’ vans, prices remain robust and are still a staggering 48% stronger or £3,326 more expensive at auction today, compared to pre-pandemic levels. Additionally, the average age is eight months older and 21,211 miles higher today.”
 
Following March’s slight decrease in the average mileage of used vans, it once again increased in April to 94,211 miles, up by a staggering 14,189 miles month-on-month. The record was also 23,636 more miles, compared to the average 12 months prior.
 
The average age shift at Manheim last month was evident, as sold used vans reached the highest levels ever seen on record. Vans returned in April were 8.8 months older compared to results from April 2021, and a further 2.8 months older than March last year.
 
Davock added: “Both average age and mileage factors are starting to demonstrate just how hard commercial vehicles have been operating during the pandemic, earning their ‘pandemic-worn’ label.”
 
Manheim’s used van first-time conversion rates also increased to 68.3%, while the average days for used vans to sell, decreased for the fourth consecutive month to 13.2 days.
 
As previously predicted, April was the first month that Manheim witnessed a drastic change in Euro 5 vs Euro 6 vehicle profile returns. Euro 5 or older vans represented 45%, while Euro 6 represented 55%.
 
In addition, Manheim’s vehicle condition profile increased further by £566 or 39%, as the average peaked at £1,488 per vehicle on average during April. This was the highest level seen so far during the post-pandemic period. 

New van market may improve conversion rates at auction

Data from the Society of Motor Manufacturers and Traders (SMMT) showed that 23,012 fewer LCVs were registered in quarter one (Q1) this year. LCV registrations were down by 23.6% for Q1 2022, compared to Q1 2021. Furthermore, last month the SMMT reported that 40,613 new vans were registered in March 2022, down by more than a quarter.
 
Davock added: “Supply issues of new LCVs continue, with Ford recently announcing that it had closed the order books for new LCVs for a short period. However, as previously mentioned, poor new van registrations should inject some positivity into used activity, continuing the strong used van prices. The SMMT headlines are starting to impact and delay the overall commercial vehicle returns, as 16% less volume was evident during April compared with the previous month.
 
“Based on these factors we are seeing some slight signs of improvement for May, as the seasonal month of April ends, and buyers start to show an improved auction buying appetite. If new van stock levels continue to reduce based on supply challenges, this will only continue to fuel demand and appetite. Therefore, I predict first-time conversions during quarter two will be stronger than the quarter one results for our customers.”
 
In terms of new van model performance, Ford’s Transit Custom continues to lead the way with new registrations, closely followed by the Ford Transit. Registrations of battery electric vehicle (BEV) vans increased by 17.7%, compared with the same period in March 2021 as 1,909 BEV LCVs were registered in March 2022.