Demand is on the up
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The balance between demand and stock is beginning to shift towards the former, pushing up second-hand truck prices.
Words: Steve Banner
Second-hand truck14
prices loo.. set to soar over the next nine months as demand rises and dealer stocks shrink, says Lee Smith, director of West Thurrock, Essex. independent dealership Hanbury Riverside.
"They'll go up by at least 10% compared with today's levels and possibly by as much as 20%." he predicts. "In fact, they're hardening already."
Ian Griffiths, national sales leader at Broadway Motor Company. is predicting an even steeper rise. "We could be talking 25% compared with current prices: he says.
Owned by GE Capital, which has branches in Derby. Manchester and Rotherham, Broadway is responsible for disposing of major rental fleet TLS's time-served vehicles. They include 75and 18-tonners as well as tight commercials.
Paul Prewett, general manager. used sales at east of
England Seania dealershipiruckEast,does not believe there is a serious shortage of second-hand trucks yet. "How long this situation will continue,! don't know," he says "Used prices have already hardened and I expect to see some major price hikes during the third quarter of this year: possibly as early as the second quarter. I can certainly see them reaching sky-high levels again by the end of the year."
That could spell a re-run of the price spike seen two-and-a-half years ago. It is not a prospect that tills him with joy because he believes a market characterised by massive peaks followed by deep troughs, followed by massive peaks again, cannot be viewed as a stable one: and stability is what dealers and customers need.
In an unstable market, nobody really wins," he says. "The last time there was a stock shortage and prices began to soar, we saw panic buying. As a consequence, dealers could sell anything with a wheel at each corner."
He does not believe that level of panic will grip the industry again: but nobody can be certain buyers will keep their nerve.
Prices could shoot up again in two or three years' time, he adds, as the result of yet another shortage of stock. New truck registrations remain sluggish, and if a truck is not sold new in 2010.1 is not going to be offered for sale in 2012/2013. The rising cost of new trucks is helping drive demand for second-hand chassis. Many operators that might have bought factory-fresh are opting for late-registered examples instead.
"Business is certainly better than it was at the start of the year," says Hanbury Riverside's Smith. "In fact, it's not had at all. Confidence is in the spring air and it's becoming easier for customers to get finance."
Renting rather than buying
Customers can usually obtain !Mance, agrees Paul Diamond, used sales specialist at Mercedes-Benz dealership Road Range, but they might be asked to put down a deposit of from 10% to 20%. "In many cases we're finding that operators prefer to rent rather than buy."
That said, Diamond is finding that demand for secondhand vehicles is healthy. with late-registered low-mileage examples at a premium. "We're starting to see a shortage of retailable used trucks," he says. "We get most of the ones we sell through Mercedes and they're becoming difficult to obtain because some operators are hanging on to their existing vehicles." Road Range has branches in Liverpool. Llandudno and on Deeside. "Getting stock will certainly be the challenge over coming months," says Adam Day, used sales specialisl prominent Market Weighton, East Yorkshire-based, second-hand truck exporter Britcom.“We're already getting to the stage where we've got more customers vehicles and prices have without doubt stabilised. Sca and Mercedes have held their values particularly wet Britcom also sells vehicles in the UK and is doing business here than previously -The domestic market seen definite signs of activity in recent months and demand is picking up," says Day.
Another factor boosting the used market is the reali! lion that hom 3 January 2012 anybody who takes into London Low Emission Zone a truck that does not mec Euro-4 particulate limit will have to pay a penalty char "Many opera tom are concluding that the days of running Euro-3 trucks are fast drawing to a close anc looking for Euro-4s instead," says Smith. Others, hovl are failing to act and could find it impossible to obtai vehicles they want. "Used Euro-4 Mercedes are alret hard to come by." says Diamond.
While Euro-4 trucks fetch good money and are sty after, not everybody wants them, or digital tachograr "We still sell a lot of vehicles with analogue tachogra to small operators," Day adds. He is detecting increa! interest in steeland alloy-bodied eight-wheel tipper view shared by Prewettt."Not so long ago you could give tippers away, but the market seems to be comirt hack," he says, •