Given the current political and economic climate in the UK, there was little change in the used vehicle and plant markets during the summer. The clearly deliberate hesitation by the Bank of England to reduce interest rates during the months leading up to the General Election created another stagnant market place for used vehicle sales, with forecourt transactions dropping way behind where they should be at this time of year. As a mechanism to reduce the rate of inflation further the BoE strategy is certainly working, at least in the housing and used vehicle sectors with most would be buyers now waiting for cheaper lending rates.

As we head towards the end of the summer period the used markets have seen some stability return, now that the General Election is out of the way.
Although the Bank of England are still yet to make a decision on a much-needed interest rate cut in August – even a small ‘quarter of one percent’ drop would help, indicating the right direction of travel at last. However, yet again this month, most banks and building societies have nothing to shout about, with their shop windows devoid of financial offers.
There was also a ‘feel good’ factor towards the end of the summer holidays with the England football team making it through to the semi-finals of the Euro Championships 2024; this sort of event always has a positive effect on the public mood, which generally translates into some spending routines which does include vehicles. Interestingly, many finance companies have begun to reduce their own rates without waiting for the BoE to act; with (slightly) cheaper loan rates that is enough to see some moderate increases in demand at the forecourt.
We remain hopeful that the situation will carry on improving, creating a very good trading platform for September and the last quarter of 2024. Lord knows, it is needed, because volumes of stock for vans and trucks continues to flow into auction centres around the country, with the supply still heavily outweighing the demand.
Cars
Because of a far less volume of returns to market, the used car sector is performing somewhat better than the LCV sales. Reports from dealers suggest that trade at the forecourt is brisk and good, with small improvements to some loan rates only strengthening this position.

The auction park above demonstrates the lack of used car stock currently; this would normally be full of stock awaiting the next sale however, owing to a lack of supply auctions are entering very fresh stock at every sale which, generally speaking is selling first time out.
Interestingly, petrol cars remain the firm favourite at the forecourt, followed by sub £20000 electric cars. Diesel does seem to be taking a back seat now, although is not a problem because the supply of used diesels is definitely beginning to dry up at auction, in favour of petrol/hybrid/electric.
Another interesting fact is that due to a relative lack of supply at auction, some dealers have returned to selling some part exchange stock that would normally be sent straight ‘to the block’. However, the cars have to meet some fairly strict criteria to qualify for a forecourt position, so the part exchange stock at auction remains quite strong.
The ‘sweet spot’ for a used car remains anything that can retail for under £15000 and, preferably with fewer than 80000 miles recorded so that finance is easier to source. Thus, any cars that are clean enough to meet this sector are selling for the strongest money with some popular models, mostly of the MPV and SUV type making well over Guide prices.

Battery electric cars continue to provide a few headaches though with the used market definitely split into two sections. The best sellers are those valued at less than £15000, so that the cars can be retailed at under £20000. Anything with a trade value over £20000 is taking much longer to sell at auction and, with an incomplete history/document can take many months to secure a bid.
LCV Sales
Yet again during the summer months we have seen substantial returns into auctions for all types of LCV’s, piling into the already over supplied LCV markets. As noted above, demand did increase slightly in July on the back of the good news stories, but still not to the level required to shift the huge volumes of stock everywhere.
As a result, pressure has again been applied to pricing with the trade really paying whatever they think for vehicles, regardless of what the Guide prices suggest. This has yet again created downward pressure on Guide prices, dropping by on average 27% across the board since the start of the year.

Mileage is becoming more of an issue with some of the larger buyers now focusing on vans with less than 60000 miles recorded, as they are far easier to sell at retail. If those vans come without damage, then strong prices will be paid for the vehicle, because there is far less financial risk to the dealer trade with a quick turnaround. This is subject to the badge on the grill though, the blue oval faring the best and, perhaps ‘Iveco’ suffering the most.
In contrast, high mileage vans with damage are increasingly being left behind at auction, with little interest in bidding on them. Substantial damage, such as that seen below on this nearly new Vauxhall Movano van is really now just attracting salvage dealers at auction. The average LCV dealer is simply not interested in taking the time and money to repair vans like this, because they can buy any number of similar vans without damage.
There is also the issue of the time it now takes to repair a vehicle, with Bodyshop wait times now many weeks. Then there is the availability and cost of spare parts, all of which creates that unknown factor of financial risk to the buyer. With several months of Guide price drops passing until the van is ready to sell, most buyers are simply not willing to take the risk……. unless the van is really cheap! So, for this heavier damage, prices achieved are likely to be around 30% of Guide, i.e. salvage rates.

Even clean vans can struggle to sell, such as this very clean Vauxhall Vivaro sold at auction over the summer. The van was popular although was missing the V5 document. As a consequence it sold for £1000 behind the Guide price, no doubt because of the time it would take the buyer to obtain a new V5.

In summary the used LCV markets have been extremely patchy indeed for much of this year, with some good sales but also some quite bad ones. The whole issue is time and money, anything that will take time to retail sell, for whatever reason will prove harder to sell at auction. As said before, we fervently hope for some better trading conditions in September and the last quarter, to begin to move the large volumes of stock built up at auction.
Trucks and Trailers
The large volume returns to auction had largely stopped over the summer months with the volume of trucks coming back much less than previously. However, they are still coming and being parked alongside the lines of trucks at auction that remain unsold. Over supply remains the biggest problem in this sector, with demand from the used trade remaining very low indeed.

New truck Manufacturer deals are quite strong at the moment which is undoubtedly taking some retail buyers out of the used markets. This is especially so for the standard trucks such as 6×2 Tractor Units and 7 – 18-ton Boxes, with and without fridges. New trucks of this type can be bought with cheap finance and a service package; little wonder then that a 4–5-year-old model remains unpopular in the markets.

RCV’s remain difficult with only the newest examples selling for a second life. Most older RCV’s, including many early Euro 6 examples are now being sold for scrap value and parts salvage, therefore there is very little difference in price between say, a 10 year old and a 6 year old example. Parts value dictates that they all sell for between £2000 and £5000.

This is even affecting the normally buoyant 4×2 RCV market, for older examples. These are now being sold for scrap rather than re-use, however anything 4×2 with a Euro 6 engine is still selling very well for re-use.
With the summer holidays now receding trade at the truck auctions is notably much quieter and is likely to remain so until mid-September. So, for now the auctions are parking stock up, awaiting those better days……………!
PLANT AND EQUIPMENT
Like most of the other market sectors, the plant and equipment world has gone quiet over the summer months. Trading continues at auction but the number of active bidders is noticeably less, with many presumably on holiday.

With plenty of stock to sell and more arriving on sites around the UK, it would seem that this normally buoyant sector is heading towards the same stagnation as for the Truck and LCV sectors. But not so, this is simply a minor blip in demand, created by the holiday season. We fully expect normal trading to resume quickly in September, with plenty of eager buyers returning to the markets then.
The heavier plant items are perhaps an exception here though because, with a few notable company receiverships this year, there is a dearth of heavier equipment coming to market. Volume will not necessarily have that much of an affect but pricing will. Some sensible reserve setting will be required on the part of Vendors to see successful sales continue.
XBG FLEET REMARKETING LIMITED
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