The timeis now
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Operators need to buy late-registered Euro-5 models now before demand forces up prices, say used truck dealers
Words: Steve Banner Operators who are wary of Euro-6 and would rather opt for a late-registered Euro-5 truck are being urged to buy before the end of this year.
Matt Hammond, used vehicles sales manager at West Thurrock, Essex-based dealership Harris Daf, says: “We’re already getting customers asking about Euro-5 because they are concerned about Euro-6.” That concern is likely to intensify as the January 2014 Euro-6 deadline draws closer, and Hammond believes that prices of late-plate Euro-5 vehicles will start to rise noticeably from February/March 2013 onwards.
It’s a view shared by Lee Smith, a director of independent dealership Hanbury Riverside, also based in West Thurrock. He believes, however, that the time to buy a late-registered Euro-5 model is now, with an eye to hanging on to it for the next four or five years. “I think a shortage will develop over the next six to 12 months as demand rises and the price goes up,” he says.
“Remember that a good-quality, two-year-old, lowmileage Euro-5 tractor unit with a big cab, plenty of horsepower and a decent level of specification can cost anywhere from £50,000 to £55,000.” If you are going to spend that sort of money, then you will want to get as much work as you can out of your new asset, safe in the knowledge that, if it has been regularly maintained, it will have a decent resale value at disposal time. “There will still be a market for a reasonably priced Euro-5 model in five years’ time,” he predicts.
However, it’s not necessary to spend more than £50,000 for a Euro-5 unit – as long as you’re prepared to accept something that is a little bit older and has covered more ground. “A three-year-old Daf XF105 460 Space Cab 6x2 2009 on an 09-plate, with 300,000km recorded, will set you back between £38,000 and £40,000,” says Hammond. “We’ve been selling similar Euro-5 models going back to 2007 on a 57-plate that have done 700,000km to 800,000km, are Daf dealer-maintained and with decent specifications, for no more than £22,000 to £25,000.”
No action yet
“I’m convinced that demand for used Euro-5 trucks will rise because of Euro-6, and a few operators are coming to the same conclusion,” says Andy Mackay, used truck sales specialist for the North West at Daf dealership Chatfields. “They’ve not taken any action yet though.” But not everybody is finding that operators are enquiring about used Euro-5s as an antidote to Euro-6. “I’ve yet to have anybody raise that issue with me,” says Jonathan Bownes, sales executive at Volvo dealership Thomas Hardie’s Middlewich, Cheshire used truck centre.
“So far as my customers are concerned, Euro-6 isn’t until 2014 so they won’t start worrying about it yet. They’re far more worried about the here and now and the effect the European crisis is having on the economy and their businesses, given that almost every country to the north of Malta is skint.” Peter Groome, used trucks director at Volvo, has a similar view. “There’s certainly a big swing towards Euro-5, but I don’t think it’s necessarily due to concerns about Euro-6,” he says.
“I think it is simply because some operators have held back from buying over the past 18 months and have decided to buy now. I think we will see some pre-buying of used Euro-5s with Euro-6 in mind though, particularly next year,” he says. “I think they will sell at a premium, but we shouldn’t see a major spike in prices if there is sufficient supply in the market.
“At Volvo we’ll have a good supply available because we’ve structured deals in such a way that we’ll have a lot of Euro-5s coming back over the next 18 months.” Rael Winetroube, sales director at MAN TopUsed, is hoping people will be sensible. “I hope we won’t see a major escalation in the price of Euro-5s,” he says. “At MAN we’re certainly making arrangements to ensure that we have enough used Euro-5s available for customers who want them.”
Summer holiday lull
The used truck market has ticked over gently during the summer as customers have gone on holiday. “I think 40% of them must have disappeared, but then it is always quiet during the summer months,” says Harris Daf’s Hammond.
“As for prices, at the start of the year some trucks were getting a bit expensive because operators were looking for vehicles that would comply with the latest London Low Emission Zone rules. Since then they’ve got steadier and are where they should be.” Thomas Hardies’ Bownes says: “They’re bobbing along nicely. They’re not going up, but they’re not falling either.
“A lot of operators have been away on holiday, but it looks as though we’ve done quite well nevertheless, although it would be wrong to say that trucks are flying out of the door. We’re certainly not short of stock, although if there were a sudden upsurge in the economy and an increase in demand then we probably would be.
“I don’t see that happening in the foreseeable future though. The economic situation we’re in now will probably be the norm for quite some time to come.” MAN TopUsed’s Winetroube agrees: “We’re certainly in tough times as far as the economy is concerned, credit remains an issue, and it’s worth noting that these days we finance 50% of the new MANs we retail ourselves.” Even well-established and well-run haulage companies can find funding from other sources hard to obtain and comes with strings attached. “That said, during the first seven months of this year there has been a good solid market for used trucks,” says Winetroube.
“I’m not seeing any evidence that it is declining to any great degree, although prices are flattening slightly.” n
EXPORT MARKETS
“The export market has certainly been consistent despite the strengthening pound,” says Rael Winetroube, sales director at MAN TopUsed. “You can buy a new Chinese truck for the price of a threeto four-year-old MAN: but the threeto four-year-old MANs still sell.”