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Buyers are snapping up some bargains
Page 52
Page 53
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There are plenty of trucks in the used market and enquiries are still coming in, but the real test is closing a deal.
Words: Steve Banner
Cash converters
Funding for acquisitions is not as hard to obtain as newspaper and television reports might have you believe, argue many dealers.
"I've yet to come across a customer who has had a problem raising finance," says Stuart Woistenholme, used truck sales manager, West Pennine's Middleton, Manchester branch.
"We've not had a finance proposal turned down so far," adds Phil Holmes, used sales manager, Kelbruck.
Nor is funding excessively expensive, dealers and brokers contend.
"Good risks can get it at a flat rate of 3% to 4%, rising to 8% to 9% for businesses whose credit history isn't quite as spotless," one finance broker observes. "Compare that with the 16% to 17% flat rates that were being charged in the 1980s."
"Money is as cheap as it has ever been," Holmes remarks.
"We're finding that finance companies have become a bit fussier about the risks they take on, but one option we can always offer is a rental deal," says Jamie McDonald of Eye, Suffolk dealership Roy Humphrey.
Are you on lookout for a threeto-five-year-old used 6x2 tractor unit? Would you be happy with one that has a fairly standard sleeper cab and middle-of-the-road specifications? Not got a part-exchange to offload?
If you've answered yes to any of these questions, then with the market in the state it is at the moment, you can pretty much take your pick.
There are plenty of these types of units available; they are typically ex-contract and usually on sale at remarkably low prices given their pedigree and condition.
"A year ago, a three-year-old DAF XF95 85.480 Space Cab would have retailed at around £35,000 to £38,000," reveals Mike Curtis, Worcester-based used truck sales manager at DAF dealership Watts Trucks. "Today, a three-year-old example of the same model will pull in about £25,000 to £27,000."
"We recently acquired 24 standard R cab 420 6x2 ex-rental units that were all in white and on 54 plates," reveals Stuart Wolstenholme, used truck sales manager at Scania dealership West Pennine's Middleton, Manchester branch.
"As recently as August or September, they would have retailed at £31,000 to £32,000," he continues. "Now they're selling for more like £20,000 to £22000."
Levels of expenditure
Many operators who need to replace one of their vehicles are understandably a little wary of exceeding a certain level of expenditure in today's tough climate, so the Scanias are being offered at just the right price and customers are responding.
"We've had them in stock for barely a month and we've only got nine left," Wolstenholme says.
"Dealers have to be very careful about how much money they ask for their trucks at present," he adds."Ask for too much and you can end up being stuck with them."
"The hauliers buying trucks at the moment are the ones who need them rather than want them," remarks Phil Holmes, used sales manager, eastern region, at Scania dealership Keltruck. And remarkably, as we mention in the panel to the left, funding for such acquisitions is not quite as difficult or problematic to obtain as newspaper and television reports might have you believe, This view is also shared by a number of used dealers.
Being unrealistc
Similar to a number of dealers, Roy Humphrey has allowed his stocks to run down a bit, but has been out recently buying vehicles for the first time in six weeks "We've seen inquiries pick up and we're getting quite a lot of repeat business," he reports. "We're also getting plenty of interest in clean, late-registered trucks and in older, less-expensive, 02 and 03 vehicles, too."
Of course, none of this is to suggest that the used truck business is booming nationwide once again.
"I've been selling used vehicles for the past 14 years — I was on new vehicles before that — and I've never had to work as hard to get sates as I am at the moment," says Wolstenholme."It's the toughest market I've ever seen.
"The worrying thing is that the guys who have been involved in used trucks for 40 years are saying they've never seen it quite as bad either. The market is not picking up. We've not turned the corner yet."
"There's not a lot of activity at the moment to be honest," believes Curtis. "Many operators are making do with the trucks they've already got.
"We're getting lots of inquiries, but closing the sale is another matter entirely. There is so much uncertainty out there at present that people are afraid to make a commitment.
"Matters aren't helped by the fact that not all hauliers are being realistic about the value of their partexchanges," he continues. "One or two of them appear to be valuing their part-exchanges at retail prices, and the trucks that dealers are trying to sell at trade prices."
What they are not failing to take into account is the extent to which used truck prices have tumbled over the past 12 months.
Avoiding a thumping loss
While these circumstances have reduced the price of the vehicles they want to buy it has also slashed the value of their trade-ins, The fall in value is likely to be especially painful if they purchased the truck concerned at the top of the market. This fall is also hurting dealers who bought stock when prices were high and cannot dispose of it without suffering a thumping loss.
If operators think their trucks are worth a fortune, then I'm afraid that very often they're going to be disappointed," says Wolstenholme.
"The majority of hauliers know that this is the case," agrees Holmes. "The ones who reckon that they don't are usually just trying to be clever."
"Prices are certainly low, but I don't think they're falling any further at present," argues Matt Hammond, used vehicle sales manager at West Thurrock, Essex-based dealership Harris DAE "I think that if prices do drop further, then dealers who can afford to do so will simply stockpile their trucks until things look up again."
Trailer tribulations
Trailer part-exchange values have fallen, too, reveals Rod Pybus of Scotch Corner trailer dealership SDC Northern.
"A 1998 tri-axle flatbed in good condition may be worth no more than £1,500 as a trade-in," he says. "I appreciate operators may feel a bit let down when they see what we're prepared to offer, but they've got to be realistic.
"If they go elsewhere, then they may find that the trailer dealer concerned will refuse to take their part exchange, never mind offer them a price for it."
SDC Northern has been forced to cut its stock by over 30% in response to the downturn.
"It's hard going?' says Pybus. "Retail prices are undoubtedly down, and there's a real glut of eurtainsiders.
"I've been through three recessions and I can never recall things being this bad," he adds."All we can do is buckle down and make the most of whatever business is out there. After all, things still need to be moved by road," •