BUYERS TURN TO HIGH MILEAGE/HIGH DAMAGE VANS TO MEET NEW LEZ REGULATIONS
- Buyers clamour for high mileage, high damage vans to beat the LEZ regulations
- Prices of high mileage and/or high damage vans appreciate by up to 50%
- Buyer behaviour causes U turn in vehicle stocking strategy
Used van buyers in the London area looking to meet the new London Low Emission Zone regulations set for introduction in early 2012 are not behaving as the market thought they would.
Instead of buying four to six year old ex-fleet vans in good condition, they are instead purchasing 56-plate and younger vans with high mileage or in poor condition.
Basically anything that is cheap and that enables them to adhere to the new standards that apply to Euro 4 vehicles registered after 1 October 2006.
The result has been a major increase in residuals of high mileage vans in poor condition to such an extent that some have appreciated in value by as much as 50% in just the last few months.
This leaves used van traders and franchised dealers who have stocked up on four to six year old vans in anticipation of the change in regulations rethinking their strategy by introducing lower price vehicles to their forecourts.
Those used van retailers already stocking sub three year, low price product in the London area are enjoying an upturn in business.
“We have seen buyers at Shoreham competing to buy low price post 1 October registered vans with damage and or high mileage, which has in turn increased prices quite dramatically. A 56-plate Transit Connect or Vauxhall Combo that would have been worth £1,000 five months ago is now selling for £1,500,” explained Alex Wright, Shoreham Vehicle Auction’s managing director.
“These buyers coming out of a 9-15 year old van are small businesses who aren’t high mileage users and who can’t or don’t want to get finance. The result is them turning their attention to the cheapest vehicle possible to avoid being penalised which is a complete U-turn in their buying patterns predicted by the industry,” he added.