Demand for used vans has been surging during the pandemic in a time where many areas of the economy are struggling, including the automotive industry. So, what is the cause for this rise in demand for light commercial vehicles (LCVs)? Keep reading to find out more about this trend and how it could continue for the foreseeable future.
Values Rising
The trend has been reported on by three of the biggest remarketing and auction operations in the UK - Aston Barclay, Shoreham Vehicle Auctions and BCA. The BCA reported that average values continued to outstrip guide prices with sale conversion rates topping 90%. Average LCV values also rose from £7,709 to £7,994 from August to September rising by 3.7% and averaging 113% of their guide value.
Economic Uncertainty
Meanwhile, Aston Barclay saw prices rise in Q3 by 4.2% and as much as 26% in 2020 from Q1 to Q3. It seems that it is all van types that have seen this surge in demand and value and there are a few reasons as to why this might be. According to Shoreham Vehicle Auctions Managing Director, Alex Wright, it is due to the economic uncertainty causing SMEs to make smarter financial decisions. He explained:
“The current economic uncertainty means many SMEs are avoiding taking out a finance deal on a £25,000 new van and are looking to buy used vans instead to support their current business workload and expansion”.
Key Sectors
Wright also believed that it is the essential sectors that have also contributed to this rise in demand:
“Sectors where used vans have been in most demand are the typical builder, plumber and electrician trades, plus food delivery and parcel delivery where many larger companies pass on work to sub-contractors who run single or multiple vans. These sectors, which are considered essential and will keep operating throughout the second lockdown, have also benefitted from the £50k Bounce Back Loan which has helped fuel new vehicle purchases.”
Man & Van Services
Despite the continued increase in the cost of vans and other LCVs, established companies and man and van services are not having to pay the premiums and continue operating at the same price before the spike in value. Therefore, man and van services remain a good option for those seeking an LCV on a short-term basis for deliveries, moving, freight, waste or any other purpose.
It is interesting to see how demand has surged for LCVs causing a spike in cost during COVID-19. This can be attributed to businesses looking to make savings on their vehicle needs as well as the strong demand for food and parcel delivery throughout the pandemic as well as other key sectors that have kept the nation going through this unique time.
