The Gavel - November 2021
Wholesale market opinion from our resident car and LCV auction experts, Andy Conde and Stuart Peak.
Andy Conde - cars
In the past few weeks, as the darker nights and frosty mornings have crept in (otherwise known as proper auction weather in my opinion!) we are certainly beginning to see a change in the markets.
CAP was forecasting another upward movement in book values at the end of October to 1.7%, but the actual figure was 1.2%, still an increase albeit not as much as we have seen previously. We need to see a stabilisation of the markets, but we also need to see the confidence remain as the last thing we want is a knee jerk reaction to values after all the great improvements we have seen throughout the year.
On a personal note, I have now been involved with several of our physical sales and despite enjoying selling digitally over many months, there is nothing like having real bidders in the auction halls. We continue to see strong physical attendances at all our re-opened auctions which creates more healthy competition for all concerned.
The supply of used vehicles continues to be at low levels with no real signs of any significant increases. Some of our larger buyers have eased up on buying, as is the norm this time of year, but I do expect to see their feet well and truly on the accelerator as we head towards the festive break.
There is no doubt that many forecourts have more empty spaces than vehicles to sell and it goes without saying that you can’t make profit from an empty space.
The message I am giving to our vendors is ‘don’t delay, sell today’. It will take a very brave person to make any predictions as to what will happen in 2022. Suffice to say, money in the bank is key; the true value of any asset is what a buyer is prepared to bid so think very carefully before refusing bids. And to the buyers I say, keep logging in to our sales or attending if an auction near you is physical as there are always one or two bargains to be found and you can’t afford to miss them.
Stuart Peak - LCVs
As we enter the penultimate month of 2021, I ask myself where the year has gone. With the much talked about pressures on supply of both new and used vans, we have seen record breaking performances month on month.
What we saw throughout October was a further reduction in volume, down 22% vs. September and a big swing in the average age and mileage of stock sold. Average age increased by three months and mileage by just under 6,000. This resulted in a fall in average selling price vs. September, down to £10,323 for the month. It is worth noting that this was the highest average mileage that we have seen in nine years! It just goes to show the pressures caused by a lack of stock, and highlights the fact that vehicles are having to be used for longer than they usually would be. First-time conversions improved by 2% month-on-month, with four out of five vans selling first time.
November is a month where we traditionally see appetite for stock slow down, and I am predicting that we shall see buyers becoming more selective with their purchasing. The cleanest, ready-to-retail stock will continue to be highly sought after as always and appetite will certainly remain steady, but I would urge vendors to take condition and mileage in to account when setting reserves and SIVs, particularly on anything over five years old.
Again, we have seen an increase in CAP values going into November, not much of a surprise when looking back at the performance from October (103.56% CAP average). It may just be that time where we all need to sit back, take a breath, and apply a sense of reality to our current working practices. Yes, the LCV market has been incredibly strong in post-COVID times and has continued to grow at a pace that no one could ever have predicted, but we have also experienced the traditional seasonal periods throughout the summer, and I predict a touch of seasonality creeping back in the remainder of Q4 also.