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The market is on the up
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With a shortage of late-registered vehicles and operators reluctant to buy new, prices for used trucks are steadily strengthening.
Words / Images: Steve Banner
The used truck market is strengthening as dealers report rising demand and a growing shortage of late-registered vehicles.
"There are green shoots out there, no question about it," declares Phil Holmes, used sales manager at Scania dealership Keltruck. "The number of trucks we're selling is increasing steadily, inquiry levels are up and prices have stabilised. All in all, things aren't too bad."
The hardening in used prices reflects the fact that new vehicle sales have been in the doldrums. Operators have been hanging on to their trucks rather than disposing of them, leaving fewer used ones available for sale.
"We're doing OK, but we're having to hunt around for stock a bit more," says Jonathan Bownes, sales executive at Volvo dealership Thomas Hardie's Middlewich. Cheshire used truck centre. -There certainly aren't the numbers of ex-fleet trucks around that there once were, so if you've got something desirable, you immediately find you've got two or three people on the phone after it and prices are creeping up.
Viable alternatives
A new truck can often be a viable alternative to a used late-plate one, but dealers do not have the numbers of unregistered chassis in their yards they had a few months ago, reports Lee Smith, a director of West Thurrock, Essex independent dealership Han bury Riverside.
"Most of those vehicles have been cleared out," he says. -Operators who want a new truck increasingly have to order one from the factory, and they're finding the price has gone up significantly."
He agrees that used prices are also on the up, and estimates that values of late-registered examples have risen 7% to 8% over the past three months. However, he contends that there is still a big gap between the prices fetched by late-plate used trucks and factory-fresh new ones.
Secondhand values are likely to strengthen further over the next few months, he predicts, with anything that is Euro-4 showing a noticeable increase, although the price gap between new and used will remain.
"There isn't a lot that's Euro-4 specification out there at present," says Keltruck's Holmes."That sort of stock just isn't available."
Smith wonders if high new truck prices will prompt a structural shift in the market, with operators keeping their expensive-to-acquire vehicles for five or six years, rather than the three years more commonly seen in recent times.
Modern technology should make this possible without the operator suffering any significant problems, assuming, of course, that the trucks are serviced regularly.
One dealer who is clearly optimistic about the used market's potential is Jamie McDonald, until very recently used truck sales specialist at Brome, Suffolk dealership Roy Humphrey.
Putting his money where his mouth is, he has just set up sh s p on his own under the RJM Commercials banner, on a A Late-plate used trucks fo acre site with a workshop on the Hill House Industrial are becoming more Estate at Besthorpe in Norfolk, just five minutes from the desirable because new All, between Attleborough and Norwich. truck sates have stalled
High-miteage
H reveals: "I've been thinking about having a go on my ow for quite a while. I reckon the job is on its way up."
e, too, has noticed a lack of late-registered vehicles. "I' e found myself a few nice bits and pieces," he says.
o, while secondhand prices may be improving, o rators are still a long way from being so desperate for tru ks that they will buy whatever is put in front of them. "If anything, they are getting pickier, especially insofar as pecifications are concerned," says Bownes.
SCR versus EGR has ceased to be an issue, and au °mated boxes such as I-Shift have pretty much carried the day. However, one or two more traditionally-minded hauliers still demand an analogue tachograph.
1-Shift has also helped make high-mileage trucks more acceptable, Bownes believes. "It stops drivers thrashing vehicles, because it will only do what it is programmed to do," he says.
As a consequence, buying high-mileage examples is less of a risk than it might once have been in the past, provided they come with a full service history. "Mileage isn't scaring people off in the way that it once did," Bownes adds.
Don't get greedy
The shortage of secondhand stock is likely to become more acute over the next two to three years thanks to low sales of new trucks this year. Used prices will increase significantly as a consequence, predicts Scania managing director Hans-Christer Holgersson.
"That will, however, have a positive impact on contract hire rates," he adds. Projected residuals influence the rate the customer pays.
While prices might be at the start of an upward curve, Holmes warns that for now and the foreseeable future, sales people should not get too carded away and charge excessively for their wares.
"Don't get greedy," he advises."Customers will only react in one way. They'll put the phone down on you." •