Increase in mileage for used LCVs

During January the average values of used LCV’s at auction across the board decreased from £4,700 to £4,315, equivalent to an 8% decrease between December and January, according to the Light Commercial Vehicle (LCV) market report from the National Association of Motor Auctions (NAMA).

However this is a less pronounced decline than the 4% when compared with November’s market. 

Comparing to the November market gives a more realistic indicator of the market than December where volumes were extremely low. 

Total sales rose significantly in January from 3,551 to 6,138, representing a month-on-month increase of a massive 73%.   

Again this should be taken in the context of seasonally low volumes during December.

In January, the prime market drivers were the balance between supply and demand coupled with the quality of the stock on offer.

Mileage changes by age

Such a large increase in mileage across all sectors indicates that companies have been holding on to their LCV fleets for longer, but are now beginning to release these vehicles into the market place resulting in an influx of older, higher mileage vehicles to be sold.  

These are predominantly vehicles used during the pre-Christmas period for deliveries which the fleets held on to until the busy trading period was over.

Last month NAMA reported that it was only the less than two years of age sector that suffered a fall in value.

However in January each age band suffered a significant decrease in value with the over six-year of age sector suffering the biggest decrease in price. 

This can be explained by significant increase in mileages as vendors work their fleet’s harder. This again supports the argument that fleets are starting to change the vehicles they held on to for longer during the economic downturn. 

If the volume of vehicles on offer in each price sector falls during February it is likely that prices will begin to increase.

If vendors ensure that a good mix of well-prepared LCVs are offered in volumes that can be readily absorbed in the marketplace we can look forward to a strong performance during 2013.

Alex Wright, chairman of the NAMA Commercial Vehicle Group, said: “Despite the wider economic uncertainty affecting the short time financial outlook for SMEs there is still a demand for quality vans and pick-ups.

“The low conversion rates and values do give a slightly false picture of the market hiding the fact that auction halls have been extremely busy during January and early February.

“From February onwards if the supply of good quality, lower mileage  LCV’s remains subdued and demand for them remains robust,  it is feasible that prices will start to rise again.”