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Ifs a buyers market
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Page 85
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The used truck market is slowing down as rising fuel prices and concern over the state of the economy take effect.
Words: Steve Banner Dealers nationwide are reporting that the used market is beginning to slow down as sky-high fuel prices and general economic uncertainty start to bite.
"We had a good first quarter, but things are starting to quieten down a little," says Paul Prewett, general manager, used sales, at the Scania dealership TruckEast, which has sites in Felixstowe, Stowmarket and Wellingborough. "We've got plenty to do, we're still getting inquiries and our phones are still ringing, but they're not ringing frantically in the way they were.
"The high price of diesel is certainly affecting demand," he continues. "Hauliers simply cannot afford it, and, as a consequence, many of them are looking to dispose of vehicles rather than acquire more.
"I was offered around 20 trucks over the Easter break by operators who want to sell but not to buy. Some were asking telephone numbers, but others were being more realistic. At least it means there's more stock about.
"We're certainly not getting the number of inquiries from owner-drivers we once did," he muses. "I suspect, in many cases, they're finding they can go off and drive for somebody and earn more money than they can from running their own vehicle."
"Things are quiet and that's been the case since January," says Paul Diamond, used specialist at MercedesBenz dealership Road Range, which has sites in Liverpool and Llandudno and on Deeside. "Much of the situation is down to fuel prices and concern over the economy, although the export side of things seems to be buoyant.
"We're finding it a lot harder to sell £30,000 trucks than we are trucks that are priced £15,000-n7,000, although there's no indicatiOn that it's because people can't get the finance to pay for more expensive vehicles."
"Business is a little bit quieter than it was, but we remain happy," says Lee Smith, a director of West Thurrock, Essexbased independent dealership Hanbury Riverside. "We're still selling five or six trucks a week, we're getting lots of repeat sales and we've got plenty of Daf XFI05s and Volvo FL-Is coming in over the next few months.
"Remember that there are a lot of operators out there who much prefer to buy a late-plate used truck than a new one, no matter what the position is over new vehicle availability. Prices are still firm, and in that respect, things haven't changed a lot from where they were last year," he adds.
Prices levelling out
"In my view, prices are levelling out a bit from what were slightly inflated levels," Prewett says. -Anybody who was hoping to sell a truck for silly money and hasn't sold it yet has left it too late."
"Prices are coming down to a more realistic level," says Diamond. "We've had a good year so far, but prices have definitely fallen back," says Dave Morgan, used sales manager, western region, at the Scania dealership Keltruck. One consequence is that dealers are likely to pay rather less for trucks they are buying in than they did last year, and be less willing to negotiate over the price they offer.
"Last year, we'd happily stay on the phone for ages if the vehicle was a desirable one and keep improving our offer until we'd secured it because we were so anxious to get hold of retailable kit,recalls one salesman. "I suspect that vendors could hear the desperation in our voices, so there was no way they'd reduce their prices.
Tougher stance
"Now it's a different story. We're adopting a much tougher stance. Our attitude isn't quite 'that's our offer, take it or leave it'," he adds. "but it's not far off. We have to be tougher. If we pay too much for stock in a climate in which retail prices may come down, we're going to get our fingers burned."
Long lead times on new trucks are still helping to keep demand for late-registered, low-mileage used examples buoyant, but perhaps not to quite the extent they once did "Dealers are starting to see orders for new vehicles cancelled," Prewett observes. "As a consequence, any operator that desperately wants a new tractor unit, isn't too worried about the detailed specification, and is willing to pay the asking price, can probably get one pretty quickly. What's more, it will be wearing the badge of one of the top three or four makes in the market." Demand for vehicles compliant with the London lowemission zone (LEZ) is assisting used sales, however, says Prewett. "I don't agree with the claim that non-LEZ trucks have become unsaleable, but they're not fetching the money that they did, and you have to think carefully about whereabouts in the country you sell them," he observes.
Logic dictates they should be more popular among operators that are based a long way from London, although many hauliers that never go anywhere near the capital still insist on LEZ compliance in case they are suddenly asked to take a load there next week.
At least a quieter market means dealers are less likely to be forced to scrabble around for vehicles. "Up until recently we were experiencing a massive boom," says Morgan. "We had a buyer lined up for every truck we bought, and an empty yard. Now that things have cooled down a little, we've actually got stock we can show people. In our view, that's a good thing."
Hopefully the line-up will include some 18-tonners. Several dealers, including Mercedes dealers Northside (sites in Doncaster, Bradford, Leeds and Sheffield) and Nottingham-based Central Vanz and Trux (now looking to expand its presence in the used truck market) report that clean, late-plate examples are proving frustratingly difficult to locate.
if we pay too much for stock in a climate in which retail prices may come down, we're going to get our fingers burned"