March Used Truck Sales Increase 7% From Last Year
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Used Class 8 truck sales in March increased 7.4% compared with the same period the prior year, ACT Research reported.
Sales rose to 21,700 units from 20,200 during the 2023 period. Sequentially, the number of sales was unchanged. The average retail sale price fell 20.3% year-over-year to $60,115 from $75,407, and 2.9% from the prior-month average of $61,898. Mileage decreased 4.1% to 416,000 from 434,000 a year ago, and 0.7% from 419,000 the prior month.
“In our most recent update, pricing pressure abated moderately from Q4 2023 to Q1 2024,” ACT Research Vice President Steve Tam said. “Prices are expected to remain relatively stable through most of 2024, transitioning to year-over-year growth in late Q3 or early Q4. Sequential growth most likely will take place at the end of 2024.”
Commercial Truck Trader tracks interest based on how actively buyers look into its online listings. It found a notable 23.6% sequential increase in vehicle detail page views for used sleepers in April, but interest in used day cabs seems to have waned with VDPs remaining stagnant during that period.
ACT Research Vice President Steve Tam says, "Prices are expected to remain relatively stable through most of 2024. (ACT Research)
“It’s intriguing to observe the recent decline in Class 8 retail prices, especially considering the uptick in interest for used sleepers,” said Charles Bowles, director of strategic initiatives at Commercial Truck Trader. “On the flip side, buyer interest, measured by VDPs, remained steady for new sleepers, while new day cabs experienced a surge in interest.”
Bowles noted there is still a substantial inventory of used units that needs to be absorbed before any substantial long-term stability in pricing.
“There’s a ton of used inventory out there in the marketplace now,” said Trey Golden, vice president of used truck sales at Rush Enterprises. “A better freight environment would suck up these trucks quickly. But in the freight environment that we’re in, we have too many used trucks. And so that’s continuing to put downward pressure on the price.”
Golden suspects prices are getting close to the bottom. He saw anticipation for prices lifting later this year, but that now seems to be pushed to 2025 along with a recovery.
Golden
“You read about, on the new truck side, private fleets taking over a lot of the builds,” Golden said. “That’s not helpful for general freight or your truckload carriers because your truckload carriers not only buy trucks but also lease owner-operators on as well.”
Golden also noted used truck inventories continue to grow, and he sees increased inventories as the biggest risk to the downside, as it’s hard to raise prices if trucks keep coming into the market.
“It’s a combination of solid carriers de-fleeting and actual carrier failures,” Golden said. “Both of those are putting trucks into the marketplace. Some things that are a little disturbing are that you’re still seeing, at most of the lenders that report, delinquency rates above repossession rates, which means there’s a lot of stuff still out there that’s stressed.”
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Golden suspects there won’t be more large closures such as Yellow Corp.’s putting trucks on the market, but he senses a lot of medium-size companies failing because their freight hasn’t returned.
“We’re seeing an uptick in applications come through,” said Charles Smith, regional business development manager at Mission Financial Services Group Corp. “But it’s sliding a little bit when it comes to the actual financing of a unit from our standpoint. We typically deal with the 3- to 5-year-old units, give or take, and people right now are just not spending the money to finance units. That’s why you’re seeing a little slide in the market.”
Smith added that the increase in applications shows there is interest from buyers. However, they just seem reluctant to follow through with the purchase given the lack of available freight since they still need shipments to haul to justify the added capacity and expense.
“I think people are just holding on to the money that they have to see whether or not the industry is going to change and whether or not the market is going to change to where, once they do make their purchase, it won’t become an affordability issue for them,” Smith said.
He has seen a lot of independent companies file for bankruptcy or close their doors because of the lack of freight, noting that single owner-operators are seeing the same thing and deciding it makes no sense to make a purchase.
“What’s going to end up happening is these trucks are going to come to auction, which is going to drive the prices down on the used market,” Smith said. “Technically, it’s a buyer’s market. It literally is a buyer’s market right now. But again, customers are afraid because they don’t know what’s going to happen.”
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