The market for used commercial vehicles will remain strong this year, analysts at CAP HPI believe. Demand for good quality used vehicles remained consistent in the final quarter of last year, and this trend looks set to continue as the logistics sector continues to boom.
However, the new commercial vehicle sector is not expected to grow, continuing a trend from 2017 that saw registrations experience the first year-on-year drop since 2012. With 362,149 vehicles registered in 2017, the market was 2.6% and 3.6% down on 2015 and 2016, respectively.
Daily rental volume increased by 2.4% compared to 2016 and represented 15.7% of total registrations compared to 14.8% in 2016.
“With historic new registrations still on the increase three or four years ago, the volumes expected to reach the market in 2018 will be higher than we have seen in recent years,” Steve Botfield, CAP HPI’s Senior Editor for Commercial Vehicles & Motorcycles, said. “However, with increasing vehicle reliability, we may see vehicles being kept for longer and reduced demand in the market.
“It is unlikely in the foreseeable future that we will attain the heights of the registrations we saw in 2015 and 2016. With the current economic climate and exchange rates, vehicles that would have been destined for our shores will either be diverted to other markets or fleets will have to face an increase in vehicle purchase prices.”
Average light commercial vehicle values recorded at BCA increased by 9% from £6,396 in December 2016 to a new record high of £6,976 at the end of last year, average mileage fell from 70,027 to 63,446 miles during the period, and the average age fell from 53 to 49 months.
There has been plenty of interest for any vehicles with a retail type specification, unusual configuration or special equipment and, as always, any vehicle suitable for the delivery or courier markets was sought after,” BCA’s LCV Operations Director, Duncan Ward, commented. “However, any vehicle in poor condition struggled to get the buyers attention unless it was keenly valued. Early signs are the market returned strongly in January.”
Values in the fleet and lease LCV sector increased by 8% to £7,760, while retained value against MRP (manufacturer’s recommended price) was stable at 38%. Part-exchange values increased by 5.5% to £4,215, although comparative age and mileage were notably lower in 2017 and this will have impacted average values. Nearly-new LCV values stood at £17,056 in December, compared to £14,683 12 months previously. As always, this has to be taken in the context of the very low volumes reaching the market, seasonal pressures and the model mix factor.