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June's used LCV market makes history with 30-40% values increase

Shoreham Vehicle Auctions MD Alex Wright

The used van market made history in June as a pent-up demand for vehicles triggered a rise in values of up to 40%, according to Shoreham Vehicle Auctions (SVA).

In SVA’s first auction since lockdown restrictions on car showrooms were eased market prices rose by £1,000 to 2,000 per vehicle on similar sales held just seven days before.

The managing director at SVA, Alex Wright, said that he “hasn’t experienced a market like it in 30 years of working in the sector”, adding that “dealers have accepted they are all in the same boat and must bid and buy in the current market or face their pitches being empty”.

Wright said: “When you see a three-year old Ford Transit with 50,000 miles on the clock booking at £9,100 and selling for £13,500 you know we are in a market that is extra-ordinary. Some dealers were buying vans wholesale on a Tuesday for more money than they sold vans to a customer for on the Monday.

“Having the physical buyers all in the auction, with a chance to discuss the market with other buyers, albeit it at a 2m distance, gave them the confidence that they are all in the same position. They have experienced the market’s pent-up demand for themselves, and accepted that if they need stock, they will have to pay the higher prices. It’s a classic demand exceeds supply market situation and vendors are in the box seat.”

In May, Wright predicted the UK's used car and van markets will 'bounce back' once Covid-19 lockdown restrictions are eased.

Aston Barclay also predicted the used van market will recover faster than its car equivalent following lockdown, as businesses turn to commercial vehicles to re-start their operations.

SVA says there are several reasons for the used van shortage. Fleets that planned to de-fleet vehicles during lockdown or summer months have delayed this because of replacement new vehicle delays, while some fleets have decided to extend contracts until they know more about the economy.

SVA says it has seen fleets claw back used vans destined for auction to put them back to work until replacement new vehicles arrive.

Wright said: “Dealers are in a difficult position. They want to make sure they sell this expensive stock quickly as they don’t want the risk of vehicles being worth a few thousand pounds less if the market drops.

“Some are running their businesses daily, but currently there is no sign the market situation is going to change anytime soon. We are all involved in a new passage in the used LCV market’s history.”

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