Predictions for 2017 show that demand has slowed in the CV market for the first time in five years, with the number of new van sales dropping versus the previous year.
Five tips to maximise value
From BCA’s LCV operations director Duncan Ward
Understand the market
Make sure you have the latest, up-to-date pricing information. Retail prices include a dealer’s preparation costs and profit margin, which can provide a worthwhile reference point to work back from.
Set a sensible reserve
Remarketing managers have to sell their vehicles at de-fleet time whatever season or market conditions. The critical factor is to carry this out quickly and efficiently to ensure the best possible return to the company bottom line. Any potential benefit gained from deferring the sale to take advantage of perceived stronger demand would have to be weighed up against increased holding costs and depreciation.
It is worth remembering that high-demand, popular models will sell strongly relative to the market whatever the time of year. That’s why the smart use of data can help vendors look at market dynamics and advise both on the optimum time to sell and the most efficient route to market.
Factors include: looking at reserve price setting; daily vehicle valuations; vehicle demand data; pipeline supply and retail demand information, together with looking at what competitor product is in the market.
Real-time access to data can help to improve first-time conversions and make sure provisional bids are informed by the most up to date information.
A van or pick-up might be in excellent exterior condition, but that doesn’t always mean the inside will be in a similarly unblemished state. You should always check for internal damage, soiling and contamination. At the same time, always check for roof damage. As well as spare keys, satellite-navigation SD cards are another costly item that often go missing prior to vehicles being de-fleeted.
Don’t flood the market
Many large fleets are often composed of large numbers of the same volume models. That’s why a steady drip feed to the used market is essential to avoid sudden oversupply when buyers are spoilt for choice of the identical make and model.
At the moment this is not reflected in the used market overall, though, with BCA saying that demand is ‘steady’ and that some sites have even set records over the summer for performance.
However, some sectors are proving troublesome for sellers. Duncan Ward, BCA’s LCV operations director, says: “The lifestyle/4×4 double cab market continues to experience price pressure, largely as a result of the increasing volumes.
“Basic-specification models are more price-sensitive than the higher-trim models, which the second owner much prefers.”
This sales rise in some sectors could be affected by several manufacturers choosing to expand their scrappage schemes to include pick-ups and LCVs. Citroen, Fiat, Ford, Nissan, Peugeot, Renault, Toyota, Vauxhall and Volkswagen have all said buyers can trade in vehicles that were built before 2010 to be scrapped in return for a guaranteed part-exchange value.
However, not all of the makers are expecting that there will be big demand. Although Ford reported an increase in commercial vehicle registrations for August versus the previous year, a spokesperson for VW said that the brand had not seen many vehicles traded in for new vans. “The crossover of people running 10-year-old vans and those buying new VW CVs is not huge,” they said.
But with discounts ranging up to around £7,000, there could well be a few more sales that are attributed to the schemes.
The rise of alternative fuels
Diesel remains dominant for commercial vehicles with only the small van sector having an impact on registrations with alternative fuel types.
However, Cap HPI’s senior editor commercial vehicles & motorcycles, Steve Botfield, said: “EV shows a year-on-year growth from 2016 but petrol registrations in this sector have already overtaken the whole of last year’s numbers. Interest in alternative-fuelled vehicles within the LCV sector is mainly limited to the small van sector, with electric and petrol increasing their market share. All other sectors rely on diesel being the fuel of choice based on pure economy.