What’s happening in the LCV market?
CVW is always interested in what’s happening in the LCV market, so the chance to hear from the Vehicle Remarketing Association (VRA) was too good to turn down.
At its first meeting off the year members of the VRA heard that dealers are increasingly ignoring “scruffy” van stock, especially larger models, that need a high degree of work for sale, with all those present agreeing that there were too many big vans in poor condition on the market.
According to Julian Pullen, senior editor, commercial vehicles and motorcycles, cap hpi: “It used to be said that if a van needed £1,000 of work, it sold for £1,500 less. Now that latter figure is more like £2,000 to £3,000. People just don’t want scruffy stock.”
Stuart Peak, national LCV manager, Manheim, agreed: “Dealers know that if they buy a vehicle that needs work, it could take between six to 12 weeks to get it done at the moment plus, given the present market, its value might fall £500- 600 in the meantime.”
Diminishing returns
It was easy to understand the logic of dealers, added Graham Howes, head of digital sales, Motor Auction Group: “They don’t want to tie their money up for that kind of period. There’s a lot of untidy large vans around and, in the time it takes to get them up to standard, they could turn around two or three vehicles in better condition.”
Louis Maxwell, senior insight manager, Auto Trader, added: “We’re seeing interest from buyers concentrated in newer vans and the oldest stock. It’s the middle group – anywhere from two to five years – especially where condition is poor that is under the most pressure.”
The situation could lead to a growth in companies that help to recondition these vehicles before sale, Julian suggested.
“We think there could be new developments in this area. Certainly, there’s a lot of poor-quality stock around at the moment and businesses that bring it up to scratch quickly and efficiently could fill a gap in the market.”
