LCV auction market performs strongly in Q1

During March the conversion rates of used vans were up to 81% while the average number of days that LCVs remained on site reduced to just 10.9, according to the National Association of Motor Auctions (NAMA).

Increased conversation rates are positive as auction vendors are realising their capital quicker and thus helping cash flow, says NAMA.

Average values of used LCVs at auction across the board decreased from £4,387 to £4,293, equivalent to a 2% decrease between February and March. 

However, this can be attributed the change in mix of vehicles sold, with an increase in sales of older poorer quality vehicles.

Total sales rose in March from 6,523 to 6,725 units, representing a month-on-month increase of a 3%. 

Despite the slight fall in the average price for LCVs, other key market factors indicated that March recorded another solid performance from the LCV auction market.

However, with summer months approaching the normal seasonal market changes are expected to follow.

If sales volumes and mileage continue to rise, at a time when the typical condition of light commercial vehicles is deteriorating, this market strength will be put to a severe test.

By reviewing the price changes over the last six months we are able to provide a much clearer insight into the market.

As the market has remained stable over the past few months, the highs at the end of 2012 and the lows seen in February will have largely resulted from which fleets were in the market at that time. 

Volume changes – by age

Sales of new LCV’s have strengthened in recent months and this stability is likely to continue throughout 2013.

This will result in an increase in two to four-year-old LCVs appearing in auction halls across the UK. While this will have a positive effect on the average price of LCV’s it will also have a detrimental effect on all less attractive, older lots.

Alex Wright, chairman of the NAMA Commercial Vehicle Group, said: “It is encouraging to see that the first quarter has seen the LCV auction market perform strongly.

“With such strong conversion rates and with the low number of days that LCVs remained on site, it is clear that auction customers are fully utilising the market.

“NAMA hope that the strong foundation created in the first quarter will have an effect on the slower summer months and will help to keep the market buoyant.”