Features & Interviews

Reasons to be cheerful: The UK van auctions sector

15 December 2022 #Features & Interviews

The UK is currently experiencing challenging economic conditions with a cost-of-living crisis, increased fuel and food prices, and higher-than-usual inflation.

Despite the difficult climate, van auction houses are optimistic about their prospects, reporting a rise in interest from buyers of 4×4 and Christmas delivery vehicles, with demand well balanced against supply.

Although online sales continue to grow strongly, there appears to be a strong desire from many buyers to continue to visit traditional drive-through auctions in person.

According to British Car Auctions (BCA), average LCV values at its auctions in October were £9,674 at BCA in October, down just £15 on September’s figure.

Confident bidding across the range of stock on offer at its auctions meant that LCV sold volume improved as sale conversions rose during October.

With the cold winter months now arrived, BCA has also seen increased activity around its specialist 4×4 vehicle events.

Stuart Pearson, Chief Operating Officer at BCA UK, said: “Despite the worsening economic conditions in recent weeks, demand remains well balanced against supply in the wholesale LCV market and average values reflect this.

“Much of this demand has been generated by the relative shortage of stock at every price point, most notably of nearly-new and retail ready vehicles which have been in short supply all year.

“There is also some seasonality at play with anything that can support increased activity in the home delivery being strongly contested, along with additional interest in any vehicle that becomes more desirable when the weather changes.”

Buyer interest has increased for poorer grade stock, although demand for the best presented LCVs remains as strong as it has been all year with overall weekly values being robust.

BCA says performance against guide prices continued to improve in October, rising above 100% for the first time since February.

Pearson added: “BCA’s ongoing refinement of its online sales programme is providing more choice for our customers and making it easier for buyers to access more of the stock that they’re interested in.

“By selecting and segmenting similar makes, models and values in our daily sale programmes, we can ensure the right stock is presented to the right buyers at the right time.”

For Manheim Auctions, average selling price in October fell by £693, down to £9,633, but both average age and mileage increased compared with September, meaning the reduction in average selling price was expected.

In recent months, Manheim has reopened all its sites to physical auctions and in addition delivered a fresh hybrid LCV auction programme.

During that time, the auction house has seen the number of physical buyers in its halls steadily increase, and the volumes of vans sold to physical buyers also rise each month.

According to the company, in October, 25% of all vans sold went to a physical buyer, up by 3% compared to the previous month.

To put this in context, before the start of the Covid-19 pandemic, about 60% of vans went to a physical buyer.

Different buying patterns for younger and older vans have also emerged; for example, in October, 34% of Euro-5 vans on offer went to physical buyers, compared to just 19% of Euro-6 vans.

Stuart Peak, National LCV Manager at Manheim UK, said: “This suggests to me that buyers are keener to see and touch the vehicle if it’s older, whereas buyers of newer vans are generally happy to buy online.

“Demand remains strong, and appetite continues to outstrip supply. All told, the market is in great shape to see us out to the end of the year.”

The company also saw first-time conversions increase by a fraction – up by 1.2% compared to September – with 81.2% selling first time.

Its sold volumes were 17% higher compared to last year and days to sell improved slightly by one day.

Meanwhile, Aston Barclay recently launched a brand new physical, drive-through LCV sale at its site in Chelmsford, Essex, designed to offer the maximum choice possible to buyers.

The company believes the physical sale process still provides an ideal purchasing environment for buyers and sellers alike.

According to the company’s latest market report, the UK’s used van market has begun to return to buoyancy after prices rose in the third quarter of 2022, following a gentle softening of used LCV prices in the first seven months of the year.

Overall, the firm’s price cap of £8,023 still remains significantly higher than the cap of £6,204 for the third quarter of 2020.

That is despite the average age and mileage of vehicles sold remaining higher two years later.

According to Aston Barclay’s latest LCV desirability index, vehicle choice has largely been based on what the buyer can afford within the available vehicles that fulfil a business need.

However, the firm says double cab pick-ups remain a popular choice among buyers for their rugged versatility, with models such as the Toyota Hilux, Mitsubishi L200, and Ford Ranger currently highly desirable.

Also, as the delivery sector has been gearing up towards Christmas, the auction house has seen the usual seasonal demand for 3.5-tonne panel vans and smaller final-mile commercial vehicles.

Vans such as the Ford Transit Connect have remained popular in the fourth quarter of the year as parcel delivery firms look to increase their fleet sizes to cope with increased festive purchasing.

Geoff Flood, Aston Barclay’s National LCV Sales Manager said: “There are no signs that the used van market will do anything other than continue at its current level until such time as used stock levels begin to improve, which looks to be some time away.

“A pressurised marketplace is the result, with a lack of choice for buyers, but record sales rates for vendors.”

Second-hand electric LCVs are likely to hit auction houses in larger numbers in the coming years, with the latest zero emission technology now being supplied in growing amounts to the new van market.


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