are keeping their replacement cycles at between three and five years, which will mean the volume of lower age and mileage vehicles hitting the market will remain quite scarce.” The VRA’s Nothard suggests that the weakening of values currently being seen may be in part due to more traditional reasons. “While there are indications of softening wholesale values for cars and LCVs overall, it is important to consider the context in which these values were achieved. “As the sector began to reopen and faced supply shortages in the new vehicle market, the values achieved were notably higher.”
Looking at recent price movements,
he adds: “Today, there is a current softening, but it can largely be attributed to standard seasonal depreciation as supply increases and more returns become available. It is crucial to keep in mind that these fluctuations are expected and reflect normal market dynamics rather than an underlying trend.”
Manheim’s Davock is pragmatic about the current market situation. “We must remember that a drop in values has been an inevitability. The market was always going to settle once new vehicle production was back on stream and used volumes returned to
nearer normal levels. The drop is from a false high and must be viewed in that way.”
An additional factor responsible for late-model values remaining high is the steep increase in the price customers are being asked to pay for new vans. While someone looking to buy a 12–18 month-old van will be looking to make a saving from new, this new pricing strategy from manufacturers is having a negative effect. Van Monster’s Sullivan says: “New transaction prices have gone up substantially, which has definitely helped maintain used values at a higher level.”
Glass’s Picton agrees: “List prices of new vans have continued to rise throughout the pandemic, mainly due to a shortage of parts and raw materials. This has definitely helped the used market remain robust and values strong over the last two- three years.” Cap hpi’s Pullen agrees this is a factor but argues it has already been reflected in the value lifts seen during the pandemic “not crashing back to pre-pandemic levels”. “Although we have largely returned to a pre-pandemic depreciation pattern, this is still at higher values than four or five years ago,” he concludes.
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