Unlocking Value: Why the best time to sell your unwanted HGV is now
Demand for new trucks continues to grow as businesses seek more efficient models. Here, Kevin Gardner, Commercial Manager at BPI Asset Disposal Solutions, explains why this is prompting owners and fleet managers to reevaluate how they dispose of their aged fleets. "The demand for HGVs saw growth for the second year running, with registrations up 13.5% in 2023, according to new data from the Society of Motor Manufacturers and Traders (SMMT).
Last year, 46,227 new trucks of various types, sizes and technologies were sold, marking the largest annual total since 2019. Rigid trucks made up the majority of new HGVs, rising 14.7% to 24,439 units, or 52.9% of the market. Articulated truck demand also showed strength, increasing by 12.2% to 21,788 units.
Tractors remained the most popular truck body type, while box van demand--often used for distributing chilled and fragile goods in urban areas--rose 19.2%. The introduction of clean-air legislation and tightening margins due to increased fuel costs drive investment in new vehicles, especially advances in low- and zero-emission technology. However, the latter still has some way to go, with electric and hydrogen registrations rising by 265.6%, albeit to a relatively modest proportion of the total, at 234 units in 2023.
Given the tightening profit margins for operators and the cost of investing in new trucks, the financial viability of investment in new HGVs often rests on the outcome of sale proceeds from existing vehicles. That's why we remind businesses that increased sales of new HGVs are accelerating the depreciation of older HGVs, creating a unique situation for vehicle owners. As companies upgrade their fleets to meet stringent environmental standards and benefit from improved fuel efficiency, the value of traditional HGVs is driven downwards.
This swift depreciation means holding onto your old HGV, which is no longer a viable financial strategy. Now is the critical time to sell your ageing vehicle before its value diminishes. By acting quickly, you can maximise your return on investment and contribute to the funds needed for a more eco-friendly, cost-effective replacement.
Planning a route forward
Traditionally, disposing of HGVs has been a time-consuming process for trucking firms, and it has not always yielded satisfactory outcomes.
Moving the vehicles to the point of sale often required complex logistical planning. Then, there was the all-important element of marketing the vehicles to an interested target market, which is not easy in a market increasingly characterised by oversupply. In light of this, many truckers are turning to asset disposal specialists.
One key advantage of this is the ability to catalogue the vehicle without it leaving the owner's premises, including photography and condition reports. For most busy owners and fleet managers, this is an attractive proposition as it effectively means they can hand the entire disposal process to someone else.
Once catalogued, the HGV is then marketed through an extensive database of potential buyers as they seek out and engage with interested parties in the lead-up to a sale.
This includes creating detailed vehicle listings, distributing targeted email campaigns, and utilising industry-specific advertising channels. Many have established online auction platforms with the ability to set a reserve. These digital marketplaces provide the opportunity to showcase truckers' assets to a wider pool of potential purchasers, increasing the likelihood of achieving the best possible value.
Alignment with the Circular Economy
The circular economy prioritises keeping resources in use for as long as possible, promoting reuse and refurbishment of unwanted assets. Truckers and fleet managers who choose to sell their unwanted vehicles unlock their hidden value and maximise return on investment and align themselves with circular economy principles.
At a time when their customers choose a logistics partner based on their sustainability credentials, being able to highlight this disposal strategy can be a key point of difference. Demonstrating this kind of environmental responsibility can also enhance a firm's brand reputation. Ultimately, it is a strategy that aligns with accepted sustainability practices and can, therefore, lead to improved business relationships and market positioning.
The future of truck sales
Older HGVs are depreciating quickly, and this is being driven by sales of new, more efficient versions.
A 13.5% increase in new HGV sales typically means a commensurate sale of the vehicles they replace. This influx of HGVs into the second-hand marketplace drives depreciation, meaning owners and fleet managers are looking for more effective ways of maximising value in a sale. Historically, truckers have had limited options.
Common approaches involve selling the assets through a dealer network or consigning them to a large auction house. While these methods have merit, they often present challenges, such as more input from the seller and a lack of marketing support. Asset disposal specialists have the expertise and market knowledge to help truckers and fleet managers achieve the best possible return on unwanted vehicles.
By leveraging targeted marketing strategies, online auction platforms, and established buyer networks, they can ensure that assets are presented to the most relevant and motivated buyers.
As the commercial vehicle industry works towards its low-carbon goals, the role of asset disposal specialists is likely to become even more crucial.
If the current level of new vehicle sales continues, it will drive further depreciation of existing HGVs, which means the best time to sell is now.