Summer 2021

Market Review

As the world continues to wrestle with the impact and effects of the Covid19 pandemic, the used vehicle markets have proved to be remarkably resilient.

The first quarter of this year was largely spent in lockdown around the country and it is fair to say that the car markets probably suffered more than the LCV, Truck and Plant markets.

One of the issues with the used car markets was that many of the larger ‘super centres’ have remained shut throughout the lockdown, with only some modest online trading carrying on.  The volumes of stock usually purchased by these giant operations simply did not happen, causing the car values to falter somewhat in this period.

A shortage of car stock earlier in the year has also helped to stabilize prices, with most auctions reporting a lack of cars from their usual sources such as dealer part exchange and ‘direct’ from company.

This scene was at an auction in late March, with the forecourt nearly empty. On a normal sale day this would have been completely full of stock for sale, demonstrating the shortages being experienced.

However as we progressed through Easter and towards the summer, with lockdowns eased the use car markets have picked up quite markedly and today, in late June most cars are selling well.

Certain cars are still struggling to get to Book values, such as the volume base models such as Vauxhall Insignia Design or Mondeo Style/Zetec.

Any model with some specification, such as SRi Insignia or Mondeo Titanium are faring quite well though, especially when presented in clean condition with a service history.

Book values remain an issue on some cars though, especially the age old problem of ‘new model uplift’. Insignia is a great example at the moment with the new shape cars such as the one seen above at auction proving an issue.

Any example of this car always struggles to make Book figures, simply because the Book is too high. Taking a comparison between old and new Insignia the reason for this struggle with the new shape model becomes clear:

  • 2017 new shape Insignia 1.6CDTi Design 5 door, 60k miles, £7200 CAP Clean.
    • 2017 old shape Insignia 1.6CDTi Design 5 door, 60k miles, £4675 CAP Clean.

Whilst one could expect £1000 – £1500 difference between the two models, a huge £2525 is too much to bear. The trade say they just cannot charge that extra premium on the forecourts as essentially they are the same car!

LCV sales have remained very strong throughout this year and even currently, showing no signs of slowing down.

Some auctions are now offering less than 100 vans in their weekly sale, as sourcing stock becomes harder to achieve.

Much of this is due to a lack of supply from fleet, where new vehicles remain harder to source. Replacement programmes have therefore been affected with some fleets choosing to retain older vans to fill the gap.

This lack of stock continues to keep prices very strong, too strong in terms of Guide price levels. Whilst most clean vans are still achieving the Average Book values or just above that is being driven purely by the lack of stock. As soon as more volume becomes available as the world starts to normalize post-Pandemic, values may begin to drop back.

The trade are increasingly turning their attention to Euro 6 engine vans now, as they believe buying such stock is one way of ‘future proofing’ their forecourts once lockdowns are eased. Of particular interest are the early Euro 6 examples, so 2017 registered vans for example. Any average mileage examples of these early Euro 6 models found direct from fleet at auction continue to make extremely strong money.

Older vans continue to sell well too, although prices are back to around Book levels or slightly above, rather than spiraling ever upwards.

Those Book levels remain very high though and on a 5 year old average mileage van, the Book price today is around £1300 more than it was a year ago, for the same age and mileage van. That represents a near 25% increase in price year on year. Passing that increase onto the retail buyer is not so easy at forecourt level, although the lack of supply means that currently, dealers can get away with it. At least one major Leasing company is selling all stock at auction currently regardless of whether it makes CAP or not. This is because the stock is easily surpassing their net book values, owing to the overall increase in values during the past year.

Some model types are selling extraordinarily well at the moment, largely due to a lack of availability for new examples. Transit Tippers and Dropsides are a good example with the waiting list for a new one now over 12 months. Thus any nearly new examples to come to market are making extreme values, such as this 20 month old example selling recently for £20800. That was nearly £1000 over Book and some £4500 more than the vehicle was valued at by Book 12 months ago.

This extreme pricing also extends to older examples, where we recently sold a 2013 Transit 350 Dropside AWD (with a small crane) for an incredible £18000!

The Book price on the clean example seen above was just £8300 but, that in itself was £2300 more than it was a year ago. So selling for £18000 recently, the vehicle made £12000 more than it was worth 12 months ago!!

The point here is that to get a genuine one Utility fleet owner 63000 mile 8 year old Dropside with all-wheel drive is very rare and, to find another one would be impossible. Thus the trader can ask almost any retail price they like for the vehicle so buying the vehicle for £18000 did not phase them.

Speaking to the trade recently, their view is that the LCV markets remain very fragile in terms of pricing. To own any decent stock they are having to pay the extremely strong prices currently however, their concern is that if the markets do suddenly slow and prices drop, they could be sat on stock that owes them too much money.

Currently the strong market remains, with Guide Book prices still increasing month on month. We cannot see to much change going forward either, as stock will remain in short supply for the rest of the year.

The Truck markets are similarly buoyant, helped by a strong export trade now that the Brexit dramas of the New Year have settled down. Like the LCV markets, Euro 6 engines have become the choice for most traders, with few now taking on Euro 5 or older stock unless it is different.

Thus tractor units, box bodied vehicles including fridges are selling well if Euro 6 engined, but anything older in these categories are selling for either parts removal or conversion in the main. There is an exception to this if the vehicle is suitable for export, a good example being 6×4 Tractor Units.

Any older 6×4 tractor units are making very strong money as they are ideal for the export markets. Any manufacturer is acceptable too, even the humble Renault as seen above, all are shipped abroad within weeks of buying them.

This Euro 5 engined little DAF 45.160 11 ton Dropside also fell into the ‘specialist’ category recently at auction. Being Euro 5 did not stop the truck from making nearly £21000 over the Guide Book value, because it was so different especially with the HIAB crane fitted to the rear. It was exceptionally clean and with only 157000 kms recorded again, where could you find another example?

The Plant and Equipment markets are similarly very strong still in this latest review period, with export markets driving prices ever upwards.

All manner of assets are being sold for exceptionally strong money at the still exclusively online sales throughout the country as buyers adapt to the new way of working. We do feel that we are still missing out on the physical buyers that previously attended physical sales, however that probably only applies to the smaller and older assets being offered. Any larger items of equipment are selling without hesitation and most on their first outing at market.

Auction Sales

Whilst most auction sales remain online only, some of the independent sites have now re-opened their doors.

Aston Barclay were amongst the first to open, holding their first physical sale in late April.

With all of the requisite Covid19 regulations in place, the sale was a great success and well attended. Our stock sold very well indeed, although interestingly some 35% of the section still sold to online buyers. Geoff Flood, National CV Manager for Aston Barclay reckoned there were more online buyers registered than in previous physical sales, so with the physical audience as well the results were very promising.

The only other centre to re-open currently is Shoreham Vehicle Auctions although, this was by invitation only thus excluding the general public for the time being. Manheim Auctions will not make any decision on a return to physical sales until later in the summer when lockdown restrictions are expected to ease further.

BCA have confirmed that they will not (ever) be re-opening any of their auction centres to physical sales, having already removed the rostrum structures in their Manchester Belle Vue site. Many in the industry see this as perhaps a move too early with many traders eager to get back to physical sales. Some Vendors too are insisting on physical sales for their products, so time will tell whether this bold move by BCA was the right one.

Electric Vehicles

The drive towards an electric future is now charging forward (pardon the pun), with many Manufacturers releasing whole new model ranges of pure electric vehicles.

Vauxhall are making some major inroads into UK fleets with their Combo and Vivaro electric van offerings, based on the PSA Group platforms. With increased real life ranges, these vans are becoming increasingly popular with fleets that can live with the somewhat limited range compared to ICE vans. British Gas have signed up to take large volumes of electric vans, including Vivaro for their city based operatives. In terms of used values, we are now seeing first generation electric vans coming back to market, more usually the Nissan and Renault product.

Whilst these early EV’s are selling quite well, they do need to be targeted towards inner city work because of their very limited range. The vans pictured above sold recently at auction making almost diesel equivalent money; but because the whole EV market is moving forward apace, early generation product is becoming a victim of their own technology. Newer equivalent EV vans can travel at least twice the distance on a full charge as these early vans, thus limiting their appeal.

However as more towns and cities in the UK aim for zero emissions the appeal of any electric vans will become much stronger.

Alternative Fuelled Trucks

The truck markets are not particularly being left behind on the drive to electric power, however their application is of course much more limited owing to the distances trucks are expected to cover.

As we have said many times before, Hydrogen seems to be the fuel of the future for both the truck and bus markets and, ultimately large plant and equipment too.

Mercedes have recently launched their new zero emission truck range which will transform their offering across Europe. Dubbed the GenH2 the Hydrogen powered trucks are being tested under all sorts of conditions, before a general launch can be scheduled.

The bus market is more advanced, with Hydrogen powered single and double decks now undertaking trials with several operators, alongside Hybrid EV vehicles.

It does now seem that the future is going to be one of electric LCV and cars with anything larger being powered by Hydrogen. This also includes trains and ships, any large application where battery pure electric is not sustainable.

Renault Launch New Kangoo

 Renault have announced a revised Kangoo van line up and a new baby sister for the van, the ‘Express’. The Express in reality is the short wheelbase version of the standard Kangoo. The usual ICE engine line-up continues, plus all electric versions due to follow on later.

Renault have also introduced an innovative new feature for the Kangoo, their ‘Open Sesame’ side door. By eliminating the B Pillar, there is full access to the rear of the van, a useful feature.

Sadly this cannot be engineered into right hand drive versions so this feature will not be available in the UK. We will however see an internal roof rack system which is also a novel feature.

We would anticipate residual values for the new van to be better than the current model, as the new model is much more ‘European’ in design.

VW Caddy Launch

VW have also been busy with a revised Caddy van, seen below.

The new van has evolved again from the current model, but again becoming much more ‘European’ in appearance. We expect residual values to be largely the same as they are already extremely high on VW product!