Used Markets Remain Very Strong
The theme of stock shortages continues this month, with just about every auction site reporting lacking any decent levels of stock direct from fleets.
This does translate into strong prices being paid for some stock, with CAP values increasing on most vehicles this month over October.
Whilst we are seeing demand for many cars this month, again the buying trends favour the popular models, with lower mileages and minimal damage.
The trade are reporting an increased level of sales activity at the forecourts during November, possibly as a result of yet further delays in the Brexit process. There does seem to be a latent demand for cars, with many buyers deciding to get the transaction done now rather than wait still further into 2020.
The big difference though is price, with the more expensive premium car stock not selling so well, creating a bit of a log jam at auction.
It would appear that the buying public are not willing to commit to large sums of money this side of any Brexit deal, preferring instead to take the lower value cars or, buying new on some form of lease deal.
Other than that, the markets remain strong with all of the usual caveats, so minimal damage and lower than 80,000 miles to get the best results.
LCV Markets Still Strong and Lacking Volume
The LCV markets continue to outperform the car markets this month, with strong sales results wherever we go this month.
Interestingly, the SMMT reports that new vehicle registrations for the September plate charge were down year on year by a hefty 23% in 2019, although this has to be viewed against a rising market for the rest of the year so far.
Such dips are great news for the used markets, because any starvation of stock creates shortages and, therefore stronger prices. 2020 would seem to be similar to 2019, in that there are not massive volumes of return stock expected, so pricing should remain pretty firm.
One noticeable difference these days are additional options fitted to vans, which are starting to make an impact on pricing.
Many dealers now want to buy van stock with the more obvious features fitted, such as air conditioning, parking sensors, Bluetooth and even metallic paint.
Vans fitted with such features are now making more money than the basic versions without at market, as LCV buyers become more akin to car buyers in this respect.
Former Utility stock is typically devoid of such features and will therefore start to suffer on price, once the competition comes with standard features fitted.
The usual suspects are still performing well this month, Transit Custom probably remains on top in terms of price and popularity.
The cheaper alternative, in the form of the Trafic/Vivaro/Talento remains a strong contender as top van in this sector, but prices certainly cannot top those of the Custom which, for many remains the van of choice here.
Truck Markets Stable
It was very much business as usual at the truck markets this month, with all of the previously reported anomalies continuing into this last quarter.
Thus any rigid boxes from 7.5 through to 18 tonnes are in plentiful supply so, unless they are Euro 6, they are struggling to sell for anything like Book money.
Fridge boxes are included in this so unless they are clean and low miles these too will struggle.
Even the old staple of a tipper or dropside with loader crane fitted can struggle, if they are long in the miles and/or heavily damaged. The exception is any direct from utility stock such as this, where they are often very low miles – these always sell well.
But generally, if vendors are sensible with pricing the trucks will sell, either for onward use with Euro 6 or some low mileage Euro 5, or for conversion/scrap for anything older.
Used Car Poverty
Here is a new term in the industry and one that will increasingly become more familiar. Eluded to earlier in this report, the issue is the lower end of the used markets, where used cars retail for below £10,000.
At the moment, older diesel cars are filling this gap very well indeed, with over 90% of the stock sold being diesel engined.
The problem is going to come in around 4-5 years’ time, when the amount of used diesel product available to the used markets becomes much less. It will be replaced by Hybrid and pure Electric cars but, because of their very high initial pricing, the depreciation curve will take longer to bring these cars into the sub £10k used vehicle markets, leading to a real shortage of stock. And the buying public not being able to afford to buy a car as a consequence.
When we also add into the mix many Local Authority’s plans to tax diesel off the road, car ownership could begin to reduce in favour of renting one when it is needed. Or maybe Manufacturers will take advantage of the situation and introduce longer term PCP type finance products, to make the used stock more affordable.
One thing is for sure, something will have to replace the older diesel used car stock!
Trade Talk On the Move
As from next month (December reports) we are taking the opportunity to revamp the format, moving the trade digest sections onto our website.
The website will be upgraded too in addition to the new, bigger trade update.
The month end reports will continue with a narrative but this will now be confined to an explanation of the statistics each month, with customer bespoke explanations of model performances.
As we approach the festive season, we are again this year not sending out corporate Christmas cards to our clients or suppliers, instead preferring to donate £500 to Naomi House, the children’s hospice near Winchester.
But all of us here at XBG Fleet Remarketing do of course wish you and your families a very Merry Christmas and Happy New Year. We will meet up with you at some stage during 2020.
It is with the greatest of pleasure that we welcome Andrew and Sharon Timms to XBG Fleet Remarketing. Sharon actually started working for us back in September and is already an extremely valuable member of the team. Andrew formally joined us on 1st December, after many years as Head of Asset Remarketing with the French bank SG Equipment Finance. We are all very much looking forward to working with Andrew and Sharon in growing further the XBG client base.