The Gavel - July 2022
Wholesale market opinion from our resident car and LCV auction experts, Andy Conde and Stuart Peak.
Andy Conde - cars
Inconsistent is the name of the game at the moment as we continue to see unpredictable auction results across the country. It feels like we are in limbo while the market waits to see what the effect of the rising cost of living on consumer spending will be. Understandably, this is causing a reduction in retail demand, and this will have a knock-on effect in the wholesale market, but to what extent remains unclear for now.
Still, the supply of quality used vehicles into the auctions remains a challenge, and we are starting to see the stream of the very best stock dry up as production issues continue to grip the new car market. Prices for these cars are rising significantly as a result, but the biggest challenge for our auctioneers continues to be the poor quality, high mileage vehicles which are struggling to find new homes at any price.
The rise in fuel prices is starting to affect the types of cars consumers want to drive, and this is being reflected in what trade buyers will bid for certain models. The big ‘Chelsea Tractor’ SUVs will certainly be impacted and I expect some serious reductions in values soon, while the smaller, more economical vehicles will see a spike in value.
Interestingly, we are also seeing the price of used battery electric and hybrid vehicles increase considerably as demand for these vehicles grows. While we have read in the press about the rising popularity of these vehicles, the interest has taken some time to filter through into the auction environment until now.
I’m also pleased to see increasing numbers of buyers joining us in the lanes at the physical sales that have reopened over the last few months. It’s great to be offering a fully hybrid approach again. This is something we have all been looking forward to over the past two and a half years, and although we are aware that many buyers have become comfortable with buying online and will continue to bid this way, no doubt many will relish the opportunity to return to physical auction for a catch up with old friends.
The summer months are historically a quiet period in the vehicle auction world but we are operating in a very different market these days, and with stock in short supply I am anticipating demand to stay consistent and the prices for the very best quality stock to increase.
Stuart Peak - LCVs
It seems like just yesterday that I was composing last month’s update. Since then, I have spent plenty of time out and about visiting some of our sites and customers, making plenty of great memories along the way.
On Friday 1st July, we held our largest offsite LCV premium sale in partnership with Novuna Vehicle Solutions at their head office in Trowbridge. What a sale it was! All 150 vans sold on the day generating a total sales value of £2.4 million at a mind blowing 105% of CAP, highlighting the demand for good quality used vans.
This year’s event was a true celebration for a number of reasons. Firstly, we held the sale in memory of our much-missed colleague and friend James Davis, and for each vehicle that sold, a donation of £50 was made to the Alzheimer’s Society from both Novuna Vehicle Solutions and Cox Automotive. Secondly, Novuna have been celebrating 40 years trading in the UK over the last few weeks so the event itself also formed part of these celebrations. Lastly, the sale was the first time since the pandemic that we have held a physical LCV sale. It was truly great to see so many people get involved on the day and see so many of our buyers again in person. The atmosphere was electric, as was the bidding. Our top buyer on the day even flew in especially from Dubai for the event. Now that is dedication!
Talking of physical sales, we are relaunching three physical LCV auctions over the coming weeks, with sales at Shepshed, Colchester and Washington. The sale at Shepshed will have happened by the time this is published, and the sales at Colchester and Washington will restart the week commencing 18th July. Feedback so far has been incredible, and we are genuinely excited about welcoming our customers back into the halls again. The summer of 2022 is going to be a blinder.
Reflecting back on the market over the last month, we continue to see first-time conversions increase, perhaps helped by a realignment of guide values over the last three months. Our vendors are aligned to the current market and economic conditions, and I don’t envisage a lot changing over the summer.
It is noticeable how many people I am speaking too are taking early holidays (myself included) before the school shut down in a few weeks. With the ongoing travel disruptions at airports and fuel protests, as well as the ongoing economic uncertainty, it could be a disrupted summer. That said, the signs of positivity have certainly been clear to see in the LCV world over the last month.