The Dealers, the story of ordinary used truck folk in 101 words. Episode three, Petty Cash

A well tanned but unshaven Mickey ‘Dee’ Day swung his two-door bile green Bentley convertible into the yard. Resplendent in Oakley shades, quilted jacket, and Jeff Banks shirt, he stepped out revealing brown Loake shoes and cream chinos.

His jaw yo-yoed battling two-day old chewing gum. If he’d been 30 years younger and five stone lighter he might‘ve got away with it. The Boss peered out the window and braced himself for the worse.

Dee-Day took short strides towards the cabin. Eventually door swung open. “Get the bleedin’ kettle on, I’m as dry as Gandhi’s flip flop,” he yelled, breathing hard.

In the next episode, will Dee-Day part with any cash? Find out in the next episode of The Dealers, the story of ordinary used truck folk in a 101 words.

(The Dealers is an Road Transport Media Production, author and editor is Laurie Dealer – characters are fictional and not based on any living person, any likeness is coincidental)

Demand for used trucks force values up 44 percent in five years

Used truck prices have risen 44% in five years despite a 35% increase in mileage, reports Manheim Remarketing.

Manheim’s five year report on used truck sales confirms that the classic rules of supply and demand are alive and well in the used HGV market, says James Davis, director of commercial vehicles.

Between the second quarter of 2007 to the same period in 2012 the average auction price for trucks went up from £4,336 to £6,259, while average mileage rose from 191,000km to 258,000km. The average age of stock going under the hammer remained stable at 105 months, or eight years and eight months old.

Davis adds: “The only notable blip was at the onset of recession at the end of 2008 and into 2009 when we saw certain fleets downsizing with reductions in average selling price.”

Getting strong prices at auction for trucks with greater mileage is probably a function of poor business confidence and a scarcity of good quality, low mileage commercial vehicles in the market. “No doubt the drive for operators to source more fuel efficient, lower emitting, late registered rigids and tractor units is driving demand; however, this is impacted by seasonality and export demand. 

“Looking at the latest UK vehicle production figures from the SMMT makes for interesting reading, showing that while car production in July 2012 increased to 120,000 units (a year on year rise of 22%), UK CV production in the month was just over 9,000, 1.3% down on the same period last year.

“Granted, these figures need to be treated with caution, especially considering the flux of import versus export, but they support the view that an underlying lack of business confidence is still having an impact on new HGV sales. This in turn is creating demand for quality used vehicles that are holding their value remarkably well at the moment.”

 

The five-year data also revealed that during the last three quarters of 2010 there was significant variances in the volumes of HGVs submitted to auction (Q4 2010 saw a fall in volumes of 95% compared to the same quarter in 2009). “This fluctuation has flattened out since then, with comparative rises in the number of HGVs coming to auction in three out of the last four quarters. However, moving forward, the lack of new HGV registrations in recent years will inevitably impact on the availability of used stock which in turn will protect values,” he adds.

 

Overall Davis believes the report shows that the used truck market is remarkably resilient. “It is fair to say the volumes have yo-yo’d over the last five years with some semblance of normality seemingly now returning. Just as we have witnessed in the van sector, average annual mileages are increasing as operators have to sweat their assets harder to maximise efficiency.

 

“With other towns and cities having declared intentions to create Low Emission Zones, the rollout of Euro-6, along with increased list prices and concerns over future emission legislation, the new and used HGV sector faces unprecedented pressures,” he says.

 

Despite the much anticipated economic renaissance appearing to be some way off, UK CV production looks sluggish and access to finance tight, Davis doesn’t see any reason why Manheim won’t continue to see used trucks continuing to command strong prices at auction, despite increased mileages.