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Government Bounce Back loan scheme keeps up used van demand
Date: Tuesday, June 9, 2020 | Author: Illya Verpraet
The government’s Bounce Back loans are allowing used car and van dealers to buy stock, keeping up demand, says Shoreham Vehicle Auctions.
The scheme lets small and medium-sized businesses borrow between £2,000 and up to 25% of their turnover, with a maximum of £50,000, at 0% interest for the first year.
Shoreham Vehicle Auctions says the majority of independent dealers buying used vehicles at the company’s last four auctions admitted to using the funding to buy new stock.
Shoreham Vehicle Auctions managing director Alex Wright said: “The government low-interest loan has provided a lifeline for many dealers. 90% of those dealers we spoke to have all confirmed it has helped stimulate their businesses, which has in turn given the used market a leg up as it comes out of lockdown.”
The auction company says vans have sold well, with high conversion rates and prices up to 10% above average.
Many smaller independent van retailers have been selling online during lockdown, with used vans being bought by parcel delivery companies, which have been very busy, according to SVA.
Sub-£4k utility vans are up 10% on March prices and three-year old rental vans have also been popular, with particular demand for de-fleeted leasing vehicles, a type of van that has been in short supply. However, 19-plate vans have struggled as franchised dealer buyers have yet to enter the market, with many buyers still on furlough.
Wright added: “Van dealers also confirmed they have taken the £50k loan and as soon as auctions opened for business, have invested that money in replacement stock. With many extended leasing contracts in the market, we predict that even when the franchised dealers come fully back online stock is likely to be thin on the ground and prices will remain strong.”
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