BCA reports they have seen a ‘very sudden and substantial increase’ in LCV stock in the latter part of 2010.
The auction firm believes that the increase is due to the traditional year-end slowdown and vehicles coming to the market ‘well ahead’ of their planned de-fleet dates.
Such vehicles are adding to the already high numbers in the corporate and leasing sector.
Duncan Ward BCA’s general manager commercial vehicles said: ‘Following months of short supply in the market we are suddenly faced with an abundance of stock, just at a time when demand is easing ahead of the Christmas break.
‘Vendors with high-risk early return product will be trying to strike the best balance between conversion and price performance to maximise returns in the current market, while others will bank on an upturn in the New Year.
‘The fly in the ointment could be if further ‘unscheduled’ volume de-fleets take place – even in an upturning market there will be an over-supply breakpoint.’
BCA are urging price guides firms to adjust their books to reflect the change in the market: ‘December books will have been cast weeks ago reflecting an October market and will not have anticipated the sudden shift in conditions,’ said Ward.
‘If downward adjustments are made for the New Year – when the marketplace is likely to be on the rise – guide prices could be well adrift by mid-January.’
However, there will still be high demand for the right vehicles, believes Ward.
‘Even amongst this over-supply, any two year old vans will be like “gold dust” to retail buyers and will generate a lot of interest in the trade as a result. This long-term legacy of the fall in new van sales during 2008 will continue to affect the market for several years to come – next year we will experience a relative shortage of three-year old vans.’
‘One thing is sure is that for the remainder of this year, buyers will be spoilt for choice and sellers may find even sensibly reserved vehicles could remain unsold.’