The Outlook in 2015 for the UK Van Market
The used van market will soon emerge from patterns set by the recession which peaked in 2009. During bleak economic times, fewer new van purchases resulted in a lopsided used van market. While used vans have always been available, the uneven market made it hard for consumers to find the age, mileage or configuration that suited their business and/or budget. During 2015, this trend will change for the better, according to Manheim, a major UK used vehicle sales firm.
“When mapping each year’s annual total new van registrations forward it is clear to see where the impact of registration shortfalls will be felt,” explained James Davis, Manheim’s head of commercial vehicles. “Our analysis indicates that de-fleet age profiles will return to a pre-recessionary pattern in 2016. This is based upon the time lag from date of registration to first life de-fleet.”
Manheim has been tracking and mapping data since 2005. Its data monitored the recession years when new van sales plummeted. In 2009, new van sales hit a low of 186,000. The impact of these low sales years has been felt by the used vehicle marketplace ever since. First, it drove up used van prices. Then, it resulted in a dearth of used van choices.
Recent trends show that a new equilibrium may be achieved over the coming year as the result of strong new van sales. Manheim’s positive predictions reflect the outstanding 2014 sales figures in which commercial van sales reached a high of 316,000. These sales are driven by fleet managers who are investing in the smarter urban sizes, new technologies, and better fuel economies of today’s new commercial vans.
The used van marketplace has been strong since 2006, when used values began to rise in reaction to a tighter market. In the UK, a used van earns 45% more in 2014 than it did eight years ago, “despite being nine months older and having travelled 12,000 more miles,” stated Davis.
Manheim’s most recent data suggests that this trend has accelerated despite more new fleet purchases. “October’s year on year average van value in auction has risen by £659, or 15%, to £4,909,” stated Davis.
The strong new van market is creating a better used van marketplace. This is good news for fleet managers who want to invest in new vans. They can anticipate a strong resale value now as they let go of old stock. Furthermore, fleet managers can anticipate a positive financial return on their investment when today’s new vans are ready for the resale market.
Davis stated that Manheim anticipates “up to 30% more vans in the wholesale arena” due to new van registrations. He added that the UK’s stronger economic position will allow this volume to be “comfortably absorbed by the wholesale market.”