Shoreham Vehicle Auctions is predicting that whatever happens to the UK economy and new van market in 2015, the used market will remain in a ‘win win’ position.
If the economy slows down and companies start to feel the pinch, the majority of SMEs (small to medium sized enterprises) who buy used vans in the UK and need a replacement vehicle will buy a model aged five years and older.
In December 2014, 35% of car-derived vans sold were over 60 months old (and had an average age of 88 months), 51% of small panel vans sold were over 60 months (with an average age of 94 months) and 43% of large panel vans over three tonnes were older than 60 months (having an average age of 88 months), according to market analysis from Manheim.
The analysis also showed that the average van values increased by 5.5% between December 2013 and 2014, compared with December 2013, the average van value at auction increased by £310 in December 2014.
If the economy continues to grow, the SMEs will look to upgrade their vehicles with newer sub five year old vans and potentially will buy more than one to meet the increased demand for their products. This market dynamic will ensure a high demand for used vans and therefore high prices.
SMEs that can afford a new van generally buy a used van and invest the rest of their cash into their business, while many who would like a new van still can’t get finance approval, so have to buy a used vehicle.
Shoreham’s managing director Alex Wright said: “The used market is in a very unique position in 2015 and whatever happens to the economy, used prices should remain at or close to their current record high.
“The recent rise in new van sales in 2013 and 2014 purchased on a typical five year replacement cycle will only impact the used market in the form of higher volumes of used vans in 2018 and beyond.
“In the meantime, used volumes coming back from the major fleets are manageable and so will not compromise values.”