The used van market is showing signs of improvement as vehicles move more quickly through auctions, even as falling guide prices continue to pressure fleet disposal values, according to the latest data from Solera Cap HPI.
Dealer demand strengthens at auctions
Feedback from industry contacts over the past month pointed to a more positive mood among dealers, with improving retail sales beginning to feed through into the wholesale market. Ken Brown, LCV valuations editor at Solera Cap HPI, said the optimism was also being felt in auction halls.
“Vehicles are selling more easily than they were the previous month,” Brown explained. “The mileage depreciation rate changes we have made also appear to be having a positive effect. Less desirable, higher-mileage stock is selling, although in some cases it remains below Cap values.”
The improving demand comes despite continued downward pressure on LCV guide prices across most segments.
Related: HMRC Updates Mileage Rates Effective September 1
Guide price reductions vary by sector
At the three-year, 60,000-mile benchmark, Solera Cap HPI reduced its average guide price by 0.6% in its September Red Book. The average reduction across all ages and mileages was 0.8%. However, the overall figure masks significant differences between individual sectors.
Small vans recorded a 1.2% fall at three years and 60,000 miles, while medium vans fell 0.4% and large vans 0.6%. City vans were unchanged. Electric vans experienced some of the largest declines, with electric small vans falling 2.7% and electric medium vans down 1.4%. Electric large vans proved more resilient, falling 0.4%.
All-terrain workhorse vehicles fell 3.2%, all-terrain lifestyle vehicles dropped 1.1%, while forward-control vehicles recorded the largest decline at 6.6%.
The figures could have implications for fleets disposing of electric vans, particularly where vehicles are being returned into a used market where residual values remain less established than for conventional light commercial vehicles.
Related: Electric Cars Struggle in Cold Weather
For fleet managers and remarketers, the current environment requires careful balancing. Moving stock quickly matters when values are falling, but so does ensuring vehicles are properly prepared before sale. The time a van spends in for repairs can cost money even before it reaches the auction block.
Condition and service history gain importance
The contrast with the wider used car market is notable. Solera Cap HPI’s latest car data showed values falling 0.9% during August as higher disposal volumes increased supply and buyers became more selective. While the LCV market is also experiencing falling values, stronger retail demand appears to be helping maintain auction activity.
Condition and history of individual vans are becoming increasingly important to auction buyers. Bodyshop lead times and delays in sourcing parts can reduce the margin available on a vehicle, particularly when values are already falling. A van that spends several weeks waiting for repairs can lose value before it is ready to be sold.
Service history is another consideration, particularly where a van is being sold with some manufacturer’s warranty remaining. Solera Cap HPI said trade buyers were paying particular attention to vehicles fitted with wet timing belts, given the cost of replacement and the potential consequences of belt failure. Evidence that a belt has been replaced, or that the vehicle has been maintained in line with the manufacturer’s recommended schedule, is becoming an important factor in achieving a strong disposal price.
