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July 13, 2010updated 12 Apr 2017 4:21pm

Mixed results as car values up, van prices down

Car values continue to strengthen with prices rising by 0.6% across the market, Manheim Remarketing reported last month. Dealer part-exchange values rose by 3% between April and May, while manufacturer stock rose in value by 1.6%

By Verdict Staff

Despite seasonal softening in demand, CV registrations are on the rise, SMMT report.

 

Car values continue to strengthen with prices rising by 0.6% across the market, Manheim Remarketing reported last month.

Dealer part-exchange values rose by 3% between April and May, while manufacturer stock rose in value by 1.6%. Also, average values are nearly 9% higher now than they were a year ago, the auction house reported.

Manheim attributed this growth in part to the fact that demand in the dealer part-exchange market has been “maintained”.

This growth, however, was partly offset by a 0.6% decline in wholesale values in the fleet sector.

The decrease in fleet values was less than expected given the significant fall in conversion rates during May, according to Mike Pilkington, managing director of Manheim Remarketing.

“The reduction in demand will inevitably result in lower prices and vendors need to react to the realities of the present marketplace,” he added.

The increase in manufacturer values are “an anomaly arising from changes in mix”, Pilkington said, while dealer value rises “indicate that demand has been maintained in the sector where traditionally values are the last to be impacted by any market changes”.

Average age of vehicles is up by four months compared to May 2009, at 50 months, and average mileage is higher by 3,015 miles at 49,777 miles, reflecting extended use during the recession, Manheim said.

Meanwhile, seasonal softening of demand in the UK has resulted in a slight drop in average wholesale used van prices, despite an annual overall increase taking place in commercial vehicle registrations.

Annual change in average wholesale used van values

Manheim Remarketing last month reported that the average price of used vans dipped between April and May by 2.8%, an equivalent of £126, to £4,290.

A combination of tough market conditions, rising volumes “and the re-emergence of the traditional softening of demand at this time of year” has resulted in the first decrease in average values for nine months, according to James Davis, general manager of commercial vehicles at Manheim Auctions.

Prices are expected to continue falling “given the time of year and increase in supply”, Davis added.

The Society of Motor Manufacturers and Traders (SMMT), meanwhile, reported that UK commercial vehicle registrations rose year-on-year by 25% in May 2010.

Van registrations during this period rose by 32% to 17,025 units, the SMMT said, although truck registrations fell by 7.5% in May.

According to Manheim, the car van sector saw prices drop 8.5%, the sharpest fall in the van sector, followed by small panel vans, in which prices dropped by 2.4%.

Prices of used large panel vans of less than 3 tonnes, meanwhile, dropped by just 0.8%, although for equivalent types of vans weighing less than 3 tonnes prices dropped by as much as 7.9%.

Manheim reported seeing an increase in the volumes of vans entering the market, largely due to the implementation of several major daily rental fleet replacement programmes.

Assets sold at auction are generally holding their prices at similar levels to those of last year.

Manufacturer cars sold by Manheim Remarketing were on average 58% of their original new price, the sale level as of May 2009, and 16% in the dealer sector, 1% up on last year.

The average age of fleet assets sold by Manheim was 47 months in May 2010, half a year older than the year previous. Average age of manufacturer’s cars is 22 months against 20 months in May 2009.

Annual change in overall car values

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