AM Online

CAP trade watch: Strong demand for used vans

Users of Red Book a couple of years ago would have become very familiar with editorial comments, month in month out, referring to general over-supply and weakened values in some areas of the used light commercial vehicles market.

This year the picture is very different. Visit any auction and you will see a consistently strong appetite for second-hand vans. There are two factors principally driving the market at present – long lead times for new vans and consistently strong economic activity fuelling the need for light commercial vehicles.

In the past we have often seen strongly competitive deals on new vans directing demand away from the used market.

Today, choosing a new van over a used example is not really an option without a good deal of planning. Order a Transit today and you are probably not going to take delivery until 2008. You will wait for a new Sprinter until towards the end of this year. Crafter also has a lead time of several months. The main reason is the decision by some manufacturers to spread their new van supply more into European markets.

From research and some reading between the lines, I detect an element of joined-up thinking here. The record year for LCV registrations was 2004 when there were concerns raised that the used market might become awash this year with unwanted used vehicles.

With the reduction in new van supply this year there are plenty of hungry buyers out there to soak up the vehicles which have been returning from three-year contracts – and there is no sign of the situation changing in a hurry. The move to spread supply around more markets is therefore timely in that residual values on used products are remaining generally stable.

This is good news for all concerned. Manufacturers are enjoying the benefit of protection for their brand image while users are not taking the big hits on depreciation that they otherwise might have been.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.