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CAP: the trends behind van auction prices

  • 17 October 2011
  • By James Clark

Ken Brown, Light Commercial Vehicles Editor at CAP Red Book, writes:

Monitoring hard data, in terms of actual trade transactions, is of course crucial to the values researching process. But there is no substitute for being out in the marketplace, listening and watching, to really gain some insight into the buying and selling dynamic. We have been spending a great deal of time all over the country, of late, gauging the mood and seeing what is going on behind the selling prices. There are several things that now strike me about the market over the past month.

When you visit auctions you begin to recognise the key players in the hall. What has been very noticeable of late has been the same faces appearing at different sales, often hundreds of miles apart. We have seen regular attendees of Yorkshire sales in Scotland, for example. This is just one of the signs of the growing shortage of stock. If there is not an abundance of available vans nearby, you have to travel. And people are certainly travelling to find what they need.

Another developing theme is internet bidding at auction and this also ties in with the same dynamic. Research was recently shared with us which revealed the enormous growth in the number of online bidders. This can only increase, as auction houses become ever slicker and more accurate in their product presentation and descriptions. But with an emerging shortage of available stock this again adds to the attraction of bidding remotely. At some point, chasing around the country for stock becomes a costly and frustrating exercise that can be solved at a stroke by staying on one place and buying online. The potential disadvantage of possibly missing a physical problem with a vehicle is balanced out by the savings in time and money offered by internet bidding.

There is good news in all of this for operators. Because many retail quality vans are finding their way back into the market via other channels, the growing shortage of vehicles has led to strengthening values for even vans which need significant reconditioning. If the proportion of damaged vans appearing at auction does increase, then low volumes will help to mitigate the impact on values. There are already signs of this with some vehicles I have personally inspected being snapped up with apparent disregard for their reconditioning costs.

Despite the apparent ‘false starts’ to the much forecast stock shortages stemming from the low registrations of three years ago it seems clear now that it is starting to bite. There will be challenges ahead for those who have to find stock but the good news will be that the financial risk tied up in each unit will be significantly lower than it might otherwise be during such a time of economic woe.




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