Dealers of second-hand commercial vehicles are being advised to stick to the business fundamentals of knowing their local market and supplying the vehicles in demand to avoid the worst of the economic downturn.
George Alexander, editor of Glass's Guide to used commercial vehicles, asserts that, regardless of how poorly the wider economy is performing, provided the stock being offered is correctly priced to meet the prevailing conditions, good profits can be taken.
He said: "For vendors, remaining positive in the face of some fairly scary numbers will require a greater leap of faith.
"If the next couple of months are going to see demand slipping further, at a time when supply grows and business is traditionally slow, then the first requirement is to keep a cool head."
He continues to explain that, while cash is tight and confidence low, selling price becomes a critical factor affecting dealer profitability.
Alexander said: "Therefore, when times are hard, the trick is to offer customers what they need, at prices they can afford. This may mean selling a wider spread of stock with greater emphasis on the value for money end of the mix, or possibly looking at model types that traditionally were not offered.
"Dealers holding stock that will not shift, and which already owes them too much money, should put it back into the market. The cash released can then be invested in vans that will appeal to cash strapped customers."
Alexander said that as long as a dealer’s strategy is based on sound business fundamentals, “trade will continue and deals can still be finalised”.
Used CV market - key trends
George Alexander highlights other key trends in the used CV market:
Used light vans
In the last quarter of 2008 trade buyers were taking few chances on extra stock at the risk of losing money. The marketplace became ‘buy-to-order', although the more adventurous dealers were still willing to maintain their stock levels, providing the prices were low enough to make the gamble attractive.
Encouragingly, well-maintained stock costing between £1,500 and £3,000 is performing best, though the buyers do not enthuse where mileage isn't warranted. However, where numbers outweigh demand, prices dip sharply.
Demand for popular car-derived vans should continue through to the spring with prices for the best ones holding up. Here, the low number of units on offer will help to offset the wider problems faced and stock will be keenly contested.
Currently, Ford Connects are available in ready numbers, with T200 seen as being the better proposition although certain LWB models generate interest within the trade.
VW's Caddy is holding up slightly better, it too is finding that the going has got tougher.
Vauxhall's 1.3 CDTi Combo fails to attract trade buyers unless presented in A1 condition. Yet, at three- to five-years of age, clean and tidy ex-utility Combos, preferably with side loading doors, prove popular as they fall into the right price range.
As the numbers available at auction easily outweigh demand, Citroen Berlingo, Peugeot Partner and Renault Kangoo type vans are currently having a terrible time of it, particularly as most on offer, at best, range between average to poor. Few arrive at auction in pristine condition, with low warranted mileage/service history and good trim levels. Those that do, however, attract a price premium.
Late year vans sporting the current 1.6HDi engine enjoy the best results when offered in metallic paint and boasting a side-loading door.
Used panel vans
We can soon expect to see the latest generation of Fiat Scudo, Citroen Dispatch and Peugeot Experts returning in greater numbers. This size of modern van will be well accepted by buyers who typically want a vehicle that looks good on the driveway.
However, in a slow market it remains to be seen if these numbers will fall in line with demand, which ultimately will determine where prices settle.
In a medium panel van sector that has grown fast over the past few years, Vauxhall Vivaro and Renault Trafic are now returning in volume, which unfortunately ensures downward pressure being placed upon prices.
More VW Transporters are on offer at auction, but to their credit the strength of the badge has seen them ride out the currently tough market conditions. Unfortunately, even for this icon, if the numbers continue to rise, price levels will be undermined.
The steady supply of ex-utility SWB Ford Transit 260/280s are seen by many as a good opportunity to acquire a regularly serviced, low mileage van at a sensible price. This appeal is lost where vendors supply large numbers of poorly presented vans without documentation.
On a brighter note, the best examples of the latest shape Transits continue to perform close to Guide. At 3.5 tonnes, Mercedes-Benz, Volkswagen and Ford products continue to lead a competitive field and those presented in clean and tidy condition with low warranted miles make strong money.
Likewise, a steady stream of older shape Mercedes-Benz Sprinter 311s ensure that there are bargains to be had. Over recent weeks, a growing number of late year Renault Masters have been defleeted with best results being achieved by those higher horsepower LWB models.