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September 06, 2022 at 9:36 PM

In the past five years, we've been through Brexit, Covid, rising inflation and new international laws. These all influence the price, supply and demand of pre-owned vehicles. Naturally, the cost of used vehicles will fluctuate over time. This article will uncover the trends we've noticed regarding used van sales over the years.

 

Demand for Used Vans Continues to Surge

Over the years, the used van industry thrived and saw increased consumer demand in the UK. A “Society of Motor Manufacturers and Traders” report found that approximately 900,000 used vans are traded annually. Second and third-life vans contributed significantly to the UK economy, with small businesses and sole traders typically operating them.

The fact that 900,000 vans change hands yearly shows how vital the used van market is, economy-wise. New vans are typically de-fleeted around four to five years after purchase. Compared to brand-new vans, used vans are less expensive and depreciate less. Due to this, second-hand vans are essential in different segments of the SME economy.

The used van market was also robust in August 2020. Used LCV’s sales broke new records, increasing 28% year-over-year. This defied seasonal trends and surpassed records for average selling prices.

Used Van Market Stayed Strong Amidst Brexit and Pandemic

Van sales are often said to indicate the UK's economic health. Strong van sales indicate a strong economy and increased company investment and expansion. Predictably, new van sales in 2020 have been weak, primarily due to Brexit and COVID-19. Job losses, social distancing restrictions and Brexit were all thought to have contributed to lower sales of brand-new vans.

But despite the global pandemic and Brexit taking a toll on many sectors of the economy in 2020, the used van market in the UK thrived amidst these challenges. As a result of the economic uncertainty, many SMEs chose not to finance a new van. Instead, they were looking for used vehicles to expand their current business.

The increase in home delivery services also impacted the growth of the used van industry. This was due to the delay in replacement cycles caused by the lack of new vans.

Demand for Used Vans Was Evident Across Sectors

The demand was seen across all sectors and wasn't limited to one.

In 2020, used van sales dominated the construction, plumbing and electrical sectors. They were also commonly used in the food and parcel delivery sectors, where large companies often hired subcontractors to run one or more vans.

Online Shopping and Home Delivery Fuelled Used Van Demand

The unprecedented demand for used commercial vehicles grew in 2020. According to Adesa UK, this increase in demand can be attributed to the increasing number of home delivery start-ups.

Due to a growing preference for supporting local businesses, eight out of ten (80%) consumers were willing to spend more on small businesses than on large companies following COVID-19. This is highlighted by the fact that half of all vans are operated locally, primarily within 15 miles of their bases daily, indicating that these are owned and operated by sole traders or small business owners.

Indeed, the boom of online shopping contributed significantly to industries dependent on vans, including delivery and courier services.

Used Van Buyers Prioritise Condition of Vehicle

Earlier, we discussed the increased demand for all types of vans in 2020. Now, with buyers prioritising good condition. Most dealers weren't buying vehicles based on price. The state of the van, its service history and its functionality were more important to them. Additionally, many preferred vans that meet customers' requirements.

In 2022, vans ideal for home delivery are still highly desirable, as well as vehicles used for civil engineering, construction and building. However, for professional buyers, condition and presentation are increasingly important.

LCVs have seen healthy competition in the market for the best vehicles for immediate use. Poorer-quality, lower-grade vans, however, are less appealing to buyers.

Considering the current economy, this is not surprising. In today's market, the condition is more important than anything else because professional buyers are looking for vehicles that can be sold quickly.

Lack of New LCVs Fuelled Demand for Used Vans

The limited supply of new LCVs has increased the demand for used vans. LCV parts are in short supply, mainly in part due to the pandemic. Consequently, professional buyers are less likely to invest in vehicles that require mechanical work, as selling them for retail is likely to take a long time.

LCV sales remain driven by the used sector, despite current pressures. Global shortages of new vehicles keep demand high, allowing the market to remain stable despite economic fluctuations.

Aston Barclay noted that buyers are interested in more prominent used commercials. It also found that VW Crafter was May's most popular used LCV because of its load cube and payload.

This is attributed to the growing parcel delivery market and the shift towards used vans by those frustrated by the lack of new vans available.

As the market has evolved, it has moved away from fuel-efficient small vans in favour of larger panel vans suitable for courier services. Lacking access to new vans, operators turn to used vehicles.

Market to Ease After Surging Prices

Used van prices in the UK in 2020 began at £4,923 and ended at £7,608, representing a 54.5% rise. Prices for used vans increased by 66.3% year-over-year from £4,573 to £7,608 in the last quarter of 2020.

Similarly, prices have remained firm in the first few weeks of 2021 due to many buyers and limited stock available.

Throughout the UK, the rollout of low emission zones is expected to increase demand for used Euro 5 vans. The need for greener, more energy-efficient vehicles, such as Euro 6 and electrified models, will increase throughout 2022 as consumers become more knowledgeable of the future landscape.

While used van sales have recently hit record levels, the market is predicted to stabilise in the coming years. A 20% to 30% drop in used-car prices has been forecasted to occur after October 2022.

Is It Time for You to Buy a Used Van?

Undoubtedly, used vans are an essential part of the UK economy.

Looking for a black van or a van you wish to sell for a part exchange? Check out our used vans and part exchange vans for sale page for more information.



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