Marketplace changing for used LCVs as age and mileages increase

The profile of used light commercial vehicles (LCVs) entering the wholesale market is continuing to change, with the age of vehicles and mileages increasing.

Cox Automotive reports that the average age and mileage of used LCVs entering the market in May rose to 80 months and 82,000 miles, respectively.

Vehicle return damage is also much more prevalent - 62% of the vehicles Manheim handled during May had more than £2,800 worth of return damage on average, a year-on-year increase of 26%.

Stock numbers are increasing, it said, but the expected seasonal quietening of the wholesale LCV sector has also characterised the month.

Even though 75% of vehicles sold first time through Manheim’s auction lanes, that was still a 7.5% decrease compared to 2023’s first quarter.

Matthew Davock, director of Manheim Commercial Vehicles, Cox Automotive, said: “Our mileage and age statistics point to the fact that commercial vehicles continue to be worked harder and longer than experienced historically.

“Clearly, dealers would prefer not to buy excessively pandemic-worn vehicles, but the greater choice on offer shows that they have a better opportunity of finding the vans they want now than at any point since early 2020. This is placing a pressure on guide values, as illustrated by May’s -3.3% drop versus the Q1 average.”

Flexible sales programme greases market wheels

Manheim’s May data also shows that growing numbers of buyers are choosing to attend auctions in person.

While online continues to be the dominant choice, 31% of LCV sales were to a buyer in the hall during May, a steady increase on previous months.

Interestingly, 46% of Euro5 stock was snapped up by a physical buyer, suggesting the in-person option is proving to be especially popular with customers seeking out older, more miles-on-the-clock vehicles, suggest Manheim.

Davock believes that all car, LCV and HGV market sectors will continue to see much higher wholesale volume levels as we enter July and August.

However, he urged sellers to be cautious around setting realistic pricing that incorporates damage, mechanical wear and wider retail market factors.

“May and June are traditionally a quieter period”, he said. “It’s the time when we see a natural shift in the marketplace.

“However, although there’s been a bit of a seasonal bite and a reduction in overall activity, there’s still clear evidence that things remain positive for the LCV wholesale sector.”

May was another record-breaking month for LCVs, according to Cox Automotive, with the number of vehicles processed by Manheim rising for a fifth consecutive month.

Cox Automotive says that the 15.3% year-on-year increase in new LCV registrations, reported by the Society of Motor Manufacturers (SMMT), translated across into the used market during May.

A total of 7,626 commercial vehicles were received by its Manheim Auction Services and Manheim Vehicle Services in the month, a further 8% increase on April.

There was a slight softening of Euro5 and Euro6 LCV prices, but overall values remain significantly above pre-pandemic levels.

Manheim recorded an average selling price for Euro5 vehicles of £4,660 (with an average age of 10 years). For Euro6 vans the price was £11,619 (with an average age of four years).

Aston Barclay reports record used LCV prices

At Aston Barclay, used LCV prices reached a new record at the end of May as it also saw signs of volumes increasing alongside new vehicle supply improving.

Prices rose by 8.3% (£698) to £9,057 between Q1 and the end of May helped by a fall in average mileage from 104,000 to 94,783 miles while average age remained at 64 months.

The last time prices were at record levels was in Q3 2021 at £8,321 when the market was coming out of a pandemic-induced lockdown.

This performance was despite three May Bank Holidays, including the extra day off for the King’s Coronation, which coincided with traders reporting a dip in footfall levels.

According to Geoff Flood, Aston Barclay’s national LCV sales manager all the signs are that five consecutive months of rising new LCV sales are starting to be reflected in a rise in used volumes.

“Used LCV market demand remains strong which is reflected in record prices, but the most interesting trend is that volumes are gradually increasing in line with better new vehicle supply and growing sales,” he said.

“Year-on-year new LCV sales have grown by 14.7% and the word from dealers is that availability is starting to improve with vehicles often turning up ahead of schedule. It is helping to contribute to larger weekly LCV sales across the group from multiple vendors.

“The summer is traditionally when the used LCV market slows down but with fuel prices and inflation falling the appetite from SMEs to replace their aging vehicles looks likely to continue. This may cause prices to fall back slightly, but signals more new stock coming into the market,” he added.