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older vehicles
Page 70
Page 71
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Operators forced to wait longer for new trucks could
be tempted to change their buying habits in favour
of used vehicles. Steve Banner reports. Truck manufacturers who are obliging hauliers to wait until March 2008 for their new vehicles could be unintentionally setting off alongterm change in the market.
Faced with long lead times, many operators who have always bought new are looking for latemodel used trucks instead. And the quality of these used vehicles might make them think twice about switching back to buying new when lead times start to shrink again.
"Remember that truck makers design bulletproof bits of kit, with engines and gearboxes that last far longer than they used to," says Steve Smith of Widnes-based independent dealership Smith Brothers. "Trucks are more robust and better put together overall than they once were, and stand the test of time."
Less of a lottery
That makes buying a second-hand vehicle far less of a lottery than it might have been 25 years ago, especially if a used truck comes with a full service history.
"What's more, the truck concerned may still be covered by the unexpired portion of the manufacturer's warranty," Smith points out."That can make a real difference. We've just supplied an 18-month-old truck to a major company that has bought nothing but new for the past 15 years— I hope we'll see a lot more of that."
"Franchised dealers are losing operators who have traditionally purchased new vehicles to the used market; no question about it," says Lee Smith, a director of West'Thurrock, Essex-based independent dealership Hanbury Riverside.
"The idea of waiting nine or 10 months for a new vehicle to arrive doesn't sit well with small hauliers in particular, and people are getting much more attuned to the idea of buying a truck that's a year to 18 months old."
Not only are used trucks cheaper than new; buyers don't have to worry about the depreciation associated with new vehicles and they can take delivery immediately. "If you want a truck, then you want it right now," Smith remarks.
The switch to used trucks means desirable late-plate vehicles are hard to come by — but not so hard that prospective purchasers will face a ninemonth wait.
"Export markets are buoyant so overseas buyers are taking some of the trucks, and leases are being extended on those currently in service because the new ones ordered to replace them haven't turned up yet," says Allan Hilton, who heads up used sales at Daf dealer Ford & Slater's Kings Lynn branch.
"In some instances customers who extended their leases a year ago may have extended them again," he reports. -From a dealer viewpoint it's great if you've got the stock; but once you've sold a truck you're worried about where the replacement is going to come from."
Nervousness about Euro-4 and digitachs continues to fuel demand for late-registered Euro3 trucks with analogue tachos, Hilton believes, especially among own-account operators: "Some of them still may not understand what AdBlue is all about, and may not want to bother with driver smartcards."
"There are some customers who are willing to take secondhand Euro-4/digital vehicles, though," says Nigel Sharp, who is used truck sales manager at Daf dealership FeeG Commercials' Barnsley site.
Inevitably the shortage of late-registered stock is pushing up prices. "As a consequence it's a rare man who can value a used truck accurately these days," says Smith.
Hilton agrees:-Values are strong." And Sharp remarks:-The prices of vehicles dated from 2003 onwards have certainly risen."
So when will the late-used bubble burst?
-I've been doing this job a long time, and I'm only too well aware that there are peaks as well as troughs," says Smith., "Normality will return. but I'm not sure when."
"In 20061 predicted that the bubble would burst about now," says Sharp. "Now I reckon it will happen at the end of this year," And Matt Heath, used truck specialist at Maritime Transport, says: "With no sign of lead times easing up, and people who would normally have bought new now buying used, I can see things going on as they are for the rest of this year."
"Perhaps it won't burst... perhaps things will simply quieten down," says Phil Holmes, used sales manager, eastern region, at Scania dealership Keltruck. He is wondering if prices have now reached their -natural" level, and whether the prices previously paid for vehicles were artificially low.-Everything may have moved ahead a step," he suggests Interest rates have risen but this has not had a major impact on demand, he concludes, echoing a view expressed by other dealers. One industry insider suggests:"Diesel prices matter a lot more than interest levels—unless the latter start climbing into double figures." •